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The drop in traffic throughput in Kochi port is being attributed to the cargo-mix, as the port mostly handles high-value but low-volume goods.

V. Sajeev Kumar

As Kochi Port Trust starts feeling the heat of global meltdown, the port authorities examine various options to boost cargo throughput and avert a probable dip in revenue earnings caused by the recessionary conditions.

The Chairman of the port, Mr N. Ramachandran, concedes that there has been a drop in traffic throughput, attributing it to the cargo-mix. As he points out, unlike many other major ports, which handle huge volumes of bulk items, Kochi port mainly handles high-value but low-volume items such as coir, marine products and agro products, with the main markets in the US and Europe. The recession in these countries has had an adverse effect on the exports of these items in containers through the port.

The options being examined include, among others, ship-to-ship transfer of petroleum products and LPG transhipment. “We will offer concessions to operators of ship-to-ship transfers in our bid to position the port as a good transhipment point vis-À-vis some eastern ports that are unable to handle huge tankers with full load due to draught restrictions,” he says. “We’re in talks with several companies active in the field and we hope to firm up plans soon”.

Inquiries reveal that there has been a decline of around 30 per cent, on an average, in the port’s container throughput in last three months. The port handled 25,037 TEUs in September, 24,034 TEUs in October and 17,499 TEUs in November.

The throughput dropped further in December to 16,400 TEUs. The shippers, the shipping lines and their agents, Customs House agents, freight forwarders, transporters all have been hit as a result. They are concerned because they are not sure if the targeted throughput of 300,000 TEUs for 2008-09 will be achieved.

Last year, the throughput was 253,012 TEUs. The concern is all the more because there are confirmed reports that some export consignments of sea-food and cashew-nuts have come back undelivered to the consignees. The situation, it is presumed, is even worse in some other container-handling ports.

The fallout has been predictable. The shipping lines, it is learnt, have started downsizing their workforce and pruning unnecessary expenses, including perquisites, even as they pursue aggressive marketing. The fierce competition among the lines to grab business has led to a sharp drop in freight rates. The Customs House agents too are not lagging behind. They are trying to cope with the challenges by being aggressive as well as by “rationalising” rates in tune with the market conditions, without caring too much for the margins. But where are the buyers?

The spokesman for Cochin Chamber of Commerce and Industry emphasises that the changing scenario calls for a change in policy, suggesting a review of the existing restrictions on exports, more so because the State’s economy, traditionally dependent on exports, is now in a dire condition.

The stimulus package for Kerala, he insists, must address the difficulties faced by the State’s export sector. Unless something is done immediately to protect the exporters, Kerala could see a significant economic downturn in near future, he observes. As export orders decline – there have been even cancellations – the repeal of restrictions, it is emphasised, is needed to enhance the competitiveness of exports.

The trading community is of the view that Kochi port and DP World should also consider offering some relief to shippers and the cross-section of port users as a means to boost the port’s traffic. As the recession is unlikely to disappear soon from the western world, the Asian competitors to India’s exporters too will, in all likelihood, come out attractive packages to push their products in the world markets. The coming months will, therefore, be critical.

More Stories on : Shipping/Ports | Kerala

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