A crisis looms on Chennai's terminals as the city's four private container terminals responsible for importing raw materials and exporting finished goods rapidly approach full capacity due to the clustering of arriving container ships, often without adequate notice.

Terminal operators attribute this congestion to the geopolitical Red Sea crisis, which has disrupted access to a key maritime corridor. Conversely, the trade community cites poor terminal planning and insufficient manpower as the primary culprits.

It is to be noted that Chennai's hinterlands, extending nearly 200 kilometers, are heavily reliant on these terminals, located inside Chennai port and at Kamarajar and Kattupalli ports in Ennore, which are essential for a diverse range of businesses, from small engineering firms to large car manufacturers. Chennai port's terminals are operated by PSA Singapore and DP World, while the Adani Group runs the terminals at Kamarajar and Kattupalli ports.

S. Satyanarayanan, Chairman of the Chennal chapter of the National Association of Container Freight Stations, warns that the terminals will reach full capacity within two years, with current utilization at 90%. He highlights significant delays in import deliveries, with more than half of the import volume taking 12-36 hours to reach container freight stations, far exceeding the global standard of 2-4 hours. These delays result in substantial losses for importers, CFS, and transport operators, undermining the government's efforts to improve the ease of doing business and exacerbating India's high logistics costs.

Immediate measures are needed to expand infrastructure and manpower to prevent severe congestion once the terminals reach saturation by 2026. Chennai International Terminals Pvt. Ltd. (CITPL), operated by PSA Singapore, acknowledges the off-schedule arrival of vessels due to the Red Sea crisis but is taking steps to mitigate congestion by increasing ground equipment and working with shipping lines to stagger arrivals.

Freight forwarder J. Krishnan of Natesa Iyer LLP argues that the issue extends beyond the Red Sea crisis, pointing to deficiencies in manpower, processes, and infrastructure. He notes the long gestation period for infrastructure augmentation as a significant challenge.

The four container terminals in the Chennai region currently handle about 3.2 million TEUS annually. Ennarasu Karunesan, an international maritime expert, believes the Chennai container cluster has the potential to become a hub port given the rapid growth in container trade and the arrival of mega-ships. However, this requires recruiting more skilled operators and conducting a detailed study to address the responsibilities of individual stakeholders.

Both Kattupalli and AECTPL at Kamarajar port have reported over 10% growth in cargo volume over the past four years. Adani Ports and Special Economic Zone Ltd. (APSEZ) plans to enhance Kattupalli Port's handling capacity by deploying additional equipment, strengthening berths for multi-commodity handling, and developing road and ancillary infrastructure.

Source: Logistics Insider 

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