Container traffic rise to push setting up of more CFS

With considerable increase in port traffic expected in the coming years and with favourable investment in India’s port infrastructure more container freight stations need to be set up.

According to estimates, the world container throughput will reach 1 billion TEUs by 2020, which is almost double of the current container traffic. The emerging Asian and African countries are expected to be the prime movers in achieving this growth. Most of the shipyards are filled with orders for container ships of over 10,000 TEUs capacity. These container ships will form the major part of the world maritime fleet in the coming years. India is going to be the preferred destination for a global manufacturing hub. This fact presents many opportunities for the ports to change their current operation style and be ready for the foreseen surge in demand of handling and faster evacuation of containers. Many investments have been proposed and steps have been taken by various port authorities for attracting the container traffic. In the period of last few years capacity constraints at the leading ports in India have been a major impediment in port operations mainly because cargo imports have always exceeded yard holding capacity against a backdrop of poor cargo off-take. Though the bulk of Indian trade is transported by sea routes, the existing port infrastructure is lacking to handle trade flows efficiently. The existing capacity at major ports is overstretched. The major ports such as Mumbai, Jawaharlal Nehru Port Trust (JNPT), Visakhapatnam, and Mundra together have a capacity of 215 million metric tonnes (MMT). All leading ports handle more cargo than their designed capacities, further contributing to congestion and resulting in a longer turnaround time. Credits to container freight stations (CFS), the scenario at this instant is slightly changing. There has been reduced overall level of empty containers’ movement, in the case of transit and local import cargo, the goods are usually being delivered from the vessel to the CFS by the CFS operator, from where the consignee clears the cargo with customs. CFS and inland container depots (ICD) form a key part of the logistics industry infrastructure. The CFS & ICDs are amongst the most rapidly growing segments of logistics industry in India. The increasing container traffic at ports needs the support infrastructure which can accommodate the traffic volumes of the containers. CFS & ICDs provide a safe investment segment with lot of returns. CFS & ICDs being the supporting infrastructure for the port development and port traffic fall under the direct trade segment of the ports. Thereby, this is also a lucrative sector for investing the reserve funds and acquiring stake in the development of support infrastructure by ports. All these dynamics are exerting pressure on current exigency of CFSs to grow even more. And to handle the increase in the sea-borne traffic in foreign and coastal trade the government is on plans for new ports that would help ease overstretched capacities at the current key ports. Upcoming new ports like a deep drafted port in Sagar Island on the southern tip of West Bengal and Dugarajapatnam port in the southern state of Andhra Pradesh are envisaged to have a total capacity of 54 million tonnes per annum (MTPA). Container Terminal projects like Vallarpadam ICTT, Ennore Container Terminal and Chennai Mega Container Terminal offer huge untapped opportunities to logistics players. These container terminals are proposed to add a capacity of around nine million TEUs by 2020 and thus boost the demand for CFS/ICDs in the adjacent areas to the ports. According to a study, the three million TEU capacity of Vallarpadam is supposed to create demand for above 20 CFSs in the region. JN Port is currently the highest container traffic port and the growth of container is still expected to grow at exorbitant rates. In addition, Kandla port and Chennai Port also handle sizeable volume of containers. Mundra port (APSEZ) witnessed the handling of above one million TEUs last year (2010-11), which has surpassed again this year. According to the Ministry of Commerce, there are about 247 CFS/ICDs in India and by far Tamil Nadu leads the list with 60 followed by Maharashtra (48) and Gujarat (33). APM Terminals Inland Services, Balmer Lawrie, Allcargo Logistics, Container Corporation of India are some of the leading operators of CFSs/ICDs in India. APM Terminals Inland Services, South Asia, has world-class CFS facilities at Nhava Sheva in Mumbai, Chennai, Dadri and Pipavav. The services offered include import and export handling, less than a container load handling, and import bonded storage. Speaking about the advantages in CFS operated by APM Terminals Inland Services, the company said: “We ensure quick, on-time and earlier retrieval of imports from the port in 24 to 36 hours, compared to the industry standard of 48 to 72 hours. Our cutting-edge IT and ecommerce systems help our customers develop effective and resilient supply chains. Our integrated network of CFS’, equipment maintenance and transportation services have strong synergies, and provide our customers with a one-stop-solution of world-class standards.” Balmer Lawrie has three state-of-the-art CFSs at Kolkata, Mumbai and Chennai. “Our warehousing and distribution facilities at Kolkata and Coimbatore are testimony to our ability of being able to successfully handle a whole range of cargo promptly and safely. We are entirely equipped for secure handling and on time delivery of cargo, whether it is over dimensional, perishable, temperature sensitive or standard cargo,” said the company. Allcargo Logistics provides comprehensive multimodal transport solutions and operations management as an integral part of its logistics services. All Cargo Logistics boasts of world class CFS facilities near JN Port in Mumbai, Chennai and Mundra. “We cater to the hinterland of North India through our ICDs at Indore, Kheda, Pithampur in Madhya Pradesh and at Dadri, Greater Noida in NCR,” said the company. “Our streamlined procedures, systems and standardized processes in handling project cargo, freight forwarding and warehousing and efficient use and maintenance of equipment, ensure smooth operations and flow of containers,” the company added. The port city Visakhapatnam will soon get three more CFSs. Currently, the Container Corporation of India (Concor), Sravan Shipping Services Private Limited, Gateway East India Private Limited and CWC-SICAL have one CFS each in Visakhapatnam.