Container volumes at non-major ports such as Mundra, Pipavav, Hazira and Katupalli have registered a combined compound annual growth rate (CAGR) of 20 per cent to 4.5 million TEUs (twenty-foot equivalent units) between 2012-17 as against a meager two per cent CAGR from 7.7 million to 8.4 million TEUs by major ports in the period under review, Icra said in its report.
Thus, major ports have underperformed in comparison to non-major ports during this period.
Overall, container volumes at Indian ports registered a CAGR of about 7 per cent for the last five years, said Icra research note.
"This under-performance can be attributed partly to delays in capacity addition at major ports, especially on the western coast, where nearly the entire incremental volumes have been absorbed by non-major ports," K. Ravichandran, senior vice-president and group head, corporate ratings, Icra was quoted as saying.
Moreover, non-major port operators have been aggressively wooing the container lines with better rates and service levels. Nonetheless, major ports continue to account for a majority of the containers handled at about 65 percent, albeit on a declining trend and offer a significant opportunity for port logistics players.
Going forward, commissioning of capacity additions at the Ennore port (already commissioned in June 2017), JNPT and other ports should result in some shift back to major ports and support volume growth for the port logistics players operating at Major Ports.
Thus, Icra believes that the higher container volumes at major ports will expand the market for the port logistics players and ease the competitive pressures for players operating at the major ports over the next three-four years.
As regards, near-term outlook for the port logistics sector, container logistics sector is expected to display modest growth overall in the current fiscal as the international trade volumes are likely to remain subdued.
Source: Business StandardPrevious Next