V. Sajeev Kumar

Experts foresee eight mega-consortiums dominating the global trunk route, carrying 70 per cent of the world's container traffic. In such a scenario, Kochi holds promise to qualify as a hub-port in the Indian Ocean region. V. Sajeev Kumar surveys the scene.

KOCHI Port has adopted a series of measures to attune itself to the demands of the changing market scenario and its vision to become the regional hub-port in the Indian Ocean region.

In the emerging global scene, the port can become one of the top eight ports on the international sea route, particularly due to its locational advantage. The development of a world-class container transhipment terminal is the most prominent prospect of all, according to Mr H.C. Venkatesh, the port Traffic Manager.

The prospects of a transhipment terminal are related neither to the hinterland nor to regional growth but to the global scenario, he added. World over, Mr Venkatesh said, customers in the container trade demand cost-effective, speedier and frequent services from a load port to discharge port. About 250 million TEUs are handled in more than 3,000 ports and about 6,000 dedicated vessels of assorted sizes are in the business of container transportation. Therefore, there is cut-throat competition and every shipping line is bleeding. Freight rates have crashed and only those who sustain the competition can survive.

To stand tall in the crowded market, major lines have resorted to amalgamation, consolidation, mergers and takeovers, thereby still managing monopoly in their sectors.

In the name of mergers and alliances, APL, NOL, Hanjin and Hyundai have formed consortiums while NYK, Hapag-Lloyd and P&O are another such one. Such mergers and takeovers are called Ground Alliance in the container traffic world.

According to the Traffic Manager, the top-20 shipping lines in the world control 63 per cent of the cellular fleet, with five-million-TEU capacity. But the emerging global scenario is beyond imagination. Experts foresee that about eight mega-consortiums would dominate the global trunk route, and these mega players would carry 70 per cent of the international container traffic. Each consortium would press into service eight vessels of about 8,000 TEUs and provide `round-the-globe equatorial service.'

These vessels would call at select ports on the East coast of America, one or two ports in Europe and a port in the Mediterranean, either Salalah in Oman or Eden in the Gulf, and one hub-port in the Indian Ocean.

In such a scenario, Kochi can explore its prospects to be a hub-port in the Indian Ocean region, so as to qualify as one of the eight global ports of call for Ground Alliance vessels. Because of Kochi's locational advantage, the port can attract a large volume once hub activity starts, Mr Venkatesh said.

From where does Kochi as a regional hub see its cargo coming? The official said the global sea trade is likely to grow at 2-3 per cent, and the container trade, which is at present enjoying an 8-per cent growth, is likely to stabilise around 6 per cent. The Indian container growth, which is around 20 per cent now, is expected to stabilise around 16 per cent.

Among the points that Kochi port can take into consideration are: 10 years down the line, a percentage of container cargo is expected to grow at an astonishing rate of around 80-90 per cent; and the rights' market projection, after a detailed study, indicates that by year 2020-21, the Indian container volume would be around 18 million TEUs.

Citing another study, Mr Venkatesh said about two-thirds of the country's container traffic is likely to be handled on the West coast and the remaining one-third at East coast ports.

In this scenario, when trunk-route mother vessels call at the Kochi transhipment hub, they would be able to offer a freight concession of about 20-30 per cent compared with that offered by small and medium vessels which provide direct services between continents.

The excellent road network, with the commissioning of the Golden Quadrilateral and surplus capacity available on the Konkan Railway route for cargo movement, would make for easier and cheaper transportation of containers from the East coast and also from the Central and Northern parts of the country; thereby, Kochi would be able to attract about 25 per cent of the 12-million-TEU volume of the West coast.

As a result, the volume which could have grown to 6 million TEUs by 2020-21 would be sufficient inducement for the trunk-route mother vessels, and Kochi could be an alternative to Colombo in the Indian subcontinent for Indian inbound and outbound container cargo.

Thus, the vision of Kochi to emerge as an international hub port for container traffic is well-founded and other port facilities that would be developed as integrated development of the port would ultimately result in the port becoming a regional hub of logistic solutions for the maritime trade.

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