The Hindu Business Line : Liner trade — Loads of opportunities

THE NATURE of liner shipping services to and from India has undergone a sea change in the last few years in the wake of the growth in break-bulk and conventional cargoes. And with the nature of goods being shipped changing, the potential and opportunities for container transport and logistics companies are enormous.

A survey by APL, part of the Neptune Orient Lines, and Drewry Shipping Consultants revealed that within India, the liner trades are highly concentrated, with 55-60 per cent of all cargoes destined for the west coast and a majority of this originating from or destined for the Mumbai/JNPT area. APL's business through JNPT alone involves handling of 1.8 lakh boxes annually.

The report estimates that 35-40 per cent of India's containerised imports and exports are carried direct, with the lion's share of traffic being transhipped over ports outside India. Indian services are inextricably linked with those into the mid-east Gulf region due to both geographical proximity and the largely complementary nature of container flows.

According to the report, many of the dedicated direct call services listed for the Far East are shuttles to/from South-East Asia. And only one of the 13 strings operating into the Bay of Bengal, for instance, goes beyond the Singapore/Malaysia range to North and East Asia.

Indeed, the last decade has seen a sharp rise in the number of cellular ships deployed in the Indian trades, while average vessel size has also increased significantly. For instance, the average ship size to Europe increased from 2,281 TEUs in 2001 to 3,079 TEUs in 2005, while that on the Far East route rose from 1,962 TEUs to 2,307 TEUs.

"It is possible that within the next five years, several ocean carriers could be deploying ships of up to 5,000 TEUs on trades linking the Mid-East and the west coast of India," the reports points out.

It has, however, been difficult for feeder and intra-regional operators as charter tonnage has been in short supply and the daily hire rates have sharply risen. For most ships in the size range 700 to 2,500 TEUs, charter rates rose 60-80 per cent from 2003 to early 2005 and consequently some lines have had no option but to suspend services.

Analysing the trends in different trade routes, the report says that the Europe/South Asia trades have mirrored strong growth in the last couple of years, with the mainstay of the European trade being raw materials (resins and some chemicals), waste-paper, scrap and some industrial goods and machine tools. The annual capacity in the trade on the dedicated direct call services is about 1.5 million TEUs.

In the first half of 2005, the India Pakistan Bangladesh Ceylon Conference introduced rate increases in March ($300 per TEU), June ($150 per TEU in Mumbai/Karachi range) and again in July ($250 in Kochi-Kolkata range) in the west-bound trade.

The report points out that of India's main liner trades, the Far East route is the most dynamic, with the last four years having seen a near doubling in the volume of container moved so that two-way exchanges are estimated to have reached some 1.3 million TEU last year.

"Particularly noteworthy has been the increase in two-way trade between India and China and India and South Korea. The next two years will probably see the start of several shuttle strings linking key ports such as Mumbai and Chennai to Shenzhen and Shanghai," the study says.

It pointed out that in the other liner trades, sizeable growth has taken place in the trade to and from southern Africa, while in the Africa/Indian Ocean sector, the trade will largely remain a low volume intra-regional market.

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