Ports expansion to accelerate container trading in India
Container Availability index (CAx) lower than Q42022 as trade improves at Indian ports
The India container market forecaster reveals a notable decline in the Container Availability index (CAx) value from May 2023, indicating that container exports now exceed imports at Indian ports.
"The average CAx value has steadily dropped as illustrated," according to the latest update from Container xChange.
(Understanding CAx value: When the CAx value is 0.5, the number of containers filled with cargo leaving and entering a port in a week is the same. If the CAx value is above 0.5, it means that more containers with cargo are entering the port while if it's below 0.5, more containers with cargo are leaving the port. Low CAx values observed consistently for several weeks indicate a shortage of containers while high CAx values over an extended period imply that there is an excess of containers at a specific port.)
Mundra port, India's largest container port, reported a 4.4 percent year-on-year growth in Q1FY24 for container handling. The port swiftly recovered from the operational disruption caused by cyclone Biparjoy, accelerating container dispatches to surpass pre-storm throughput levels. "With container ships docking promptly upon arrival, congestion and delays have been mitigated," says the port authorities.
Christian Roeloffs, CEO & Co-Founder, Container xChange says: “The market scenario is looking positive and promising in India. With trade lanes being re-established, we expect container freight rates to return to early pandemic levels in the second half of CY23. This trend is likely to continue in the following quarters of FY24, which will boost foreign containerised trade and improve earnings for port operators.
"Indian ports have shown resilience, thanks to improved efficiency, strategic investments in infrastructure, and stable freight rates. Looking ahead, the focus on infrastructure development opens exciting opportunities for India on the trade map and will strengthen its position as a favourable container trade destination."
Container prices continue decline
In July 2023, the average container price for 40 HC container was $1,927 at Mundra, $1,918 at Chennai and $1,824 at Nhava Sheva compared to $3,630 in Mundra, $3,931 in Chennai and $3,972 in Nhava Sheva during the same period last year. "The prices peaked starting July 2021 and ever since have been dropping gradually."
The average dwell time at Indian ports has improved significantly, matching top-ranking countries like Singapore, and showcasing enhanced efficiency and performance in global trade.
"India's cargo handling capacity at ports is set to receive a significant boost with the commissioning of new facilities at Vizhinjam in Kerala and the commencement of work at Vadhvan in Maharashtra in 2024.
"Officials have indicated that the first stage of Vizhinjam Port is nearing completion, making it the country's first mega transshipment container terminal. This development is expected to strengthen India's maritime infrastructure and enhance trade efficiency, solidifying the nation's position as a prominent player in international shipping and logistics.
"India is also actively creating 5,000 km of multi-country waterways to enhance trade and transportation across the region. This initiative promises improved logistics, stronger regional ties, and economic growth for all involved nations."