The ministry of shipping has proposed setting up an international container transhipment port (ICTP) at Galathea Bay in Great Nicobar Island in the Andamans. About Rs 41,000 crore is estimated to be spent by 2028. Such infrastructure is driven by the logic that while 25 percent of Indian container traffic is served through transhipment, about 80 percent of it happens outside the country. This would translate to about 3.5 million twenty-feet equivalent units per annum (mTEUpa) being transhipped outside the country, of which 85 percent (3 mTEUpa) is handled in the south and east of India, namely at the ports of Colombo, Singapore and Klang. Colombo alone tranships about 1.6 mTEUpa for Indian ports, of which 1.2 mTEUpa is for the east coast ports.
In the spirit of Atmanirbhar Bharat, it is important to question why containers for India are transhipped in other countries, and not in India. It is further important to increase the canvas of the vision and question why Indian ports cannot tranship not only for India but also for our neighbouring countries on the rims of the Arabian Sea, the Gulf and the Bay of Bengal.
Traffic Patterns
Out of the total container traffic of India of 17 mTEUpa, the west coast ports handle over 13 mTEUpa and the east coast ports about 4 mTEUpa. About 10 percent of the traffic (1.7 mTEUpa) for the west coast ports is transhipped, while it is 65 percent (2.6 mTEUpa) for the east coast ports. The west coast traffic profile is primarily due to the traffic concentration in two of the west coast ports, namely Mundra and Jawaharlal Nehru Port Authority (JNPA), which handle between them over 11 mTEUpa. Rather than be a recipient of transhipped traffic, these two ports would be transhipping traffic for the neighbouring Indian west coast ports and even marginal volumes for some of the Arabian Sea and the Gulf countries. On the east coast, only Chennai has a traffic of 1.5 mTEUpa, while the other ports handle much less than a million each. Given such volumes, they have to contend with transhipped traffic. Chennai receives about 50 percent of the traffic, as transhipped and the other east coast ports anywhere from 65 percent to 100 percent.
There are two takeaways from this. One, the smaller west coast ports receive about 1.7 mTEUpa as transhipped traffic while the east coast ports receive about 2.7 mTEUpa. Two, ports with traffic of more than 0.5 mTEUpa find it efficient to start receiving some direct traffic, while those with traffic of more than 3-4 mTEUpa would be able to attract almost the entire volume as direct traffic without transhipment, and can serve as transhipment ports for neighbouring low traffic ports.
Making Transshipment A Success
In this context, would the ICTP at Galathea Bay serve the purpose? There are four criteria that are important for the success of a transhipment terminal:
1. Location in the general flow of traffic, especially for ports having smaller traffic volumes, and preferably close to such ports.
2. Ability to berth deep draft mother vessels (say 15 meters plus draft)
3. Good backup area to spread out containers (rather than stack them high) for easy stacking and retrieval, complemented by high service levels of yard planning, unloading, stacking, retrieval, loading and documentation to minimise turnaround times of the mother and feeder vessels.
4. Supporting originating and terminating cargo as this permits higher fluidity in mother vessel movement and reduces transhipment requirements for the originating and terminating cargo.
Regarding criterion 1, Galathea Bay, being to the east of the Indian east coast ports can serve as a transhipment port for traffic of the Far East. The current total volume of such transhipped traffic is about 1.5 mTEUpa, those that are transhipped in Singapore and Klang. There is also the opportunity of transhipping traffic of both the West and Far East for the Bay of Bengal rim countries, though there would be tough competition with Colombo, Singapore and Klang.
Criteria 2 and 3 can be addressed, given that Galathea Bay would be a new infrastructure. Criterion 4 is important from a competitive perspective. Singapore has an originating/terminating traffic of over 7 mTEUpa, and in addition, handles a transhipment of 30 mTEUpa. Klang has an originating/terminating traffic of over 6 mTEUpa, and in addition, handles a transhipment of 7 mTEUpa.
Proximity to the established trade route between Suez and Singapore is an overstated criterion. After all, trade routes are not rigid. They go where the trade is. With the growing economies of the Gulf countries, Jebel Ali came on to a trade route with mother vessels bending their routes to go call at that port and then tranship into other Gulf and Arabian Sea ports. Also, today Mundra and JNPA are ports that are on trade routes, receiving almost their entire traffic as direct traffic. An overall consequence for India is that 75 percent of containers are not transhipped, with this share growing.
For Atmanirbharta, it is important to have transhipment ports in India. Based on the criteria stated above, Mundra and JNPA have a better chance of being transhipment ports for the west coast, and the Arabian Sea and Gulf Rim countries. Kochi and Vizhinjam, positioned and being developed as transhipment ports, would be able to compete only if originating/
terminating traffic provide the required complementarity. For the east coast, Chennai has the best chance. In the spirit of Atmanirbhar Bharat, though partially, maybe even the position that Adani has at Colombo.
In this context, Galathea Bay will have to compete very aggressively, being a pure transhipment port, without the benefit of originating/terminating traffic. However, the opportunity that it provides for India’s strategic security in the Bay of Bengal could be a key consideration.
G Raghuram is Professor Emeritus, Gujarat Maritime University, and Advisor, The Infravision Foundation. Views are personal, and do not represent the stand of this publication.
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