Containerization – Role in Enhancing International Trade Competitiveness.
Containerization – Role in enhancing International Trade Competitiveness.
-H. Sanjit Singh
ASM’s IIBR
Abstract
Shipping is truly the lynchpin of global economy and international trade. More than 90% of world merchandise trade is carried by sea and over 50% of that volume is containerised. India has 12 major and 187 non-major ports along its 7517 km coastline. Cargo traffic handled by Indian ports in 2006-07 was 649 mt, of which 80 mt (6.0 mTEUs) was the container traffic. `
Trade growth, penetration of containerisation, and hub and feeder service structure are the drivers of the container traffic growth. India 's export import growth has grown around 24 per cent during 2002-07. Its impact on container traffic growth could be higher, since a greater share of trade is moving towards finished goods requiring containerization. Presently, containerized cargo represents about 30% by value of India 's external trade, and this proportion is likely to grow as containerization increasingly penetrates the general cargo trades and increases its share from the current 68 per cent to nearer international levels of around 75-80 per cent [World Bank, 2007]. Considering various growth scenarios and studies, it appears that international trade growth and penetration would result in 21 mTEUs by 2015-16.
Looking at the container traffic growth in the past few years, there seems to be scope for hub operations in India, possibly one each on the east and west coast. As per the projections made by a study of the Jawaharlal Nehru Port Trust, 9 mTEUs of the Indian traffic of 21 mTEUs will be hubbed in 2015-16 [JNPT, 2006]. If 50 per cent hubbing were to take place in India, then 4.5 mTEUs will be hubbed in India, implying transhipment handling of 9 mTEUs. This requires port handling capacity of 30 mTEUs, with 9mTEUs as transhipment at hub ports.
Further, shipping trends will play an important role in deciding whether the Indian ports have potential for hub operations.
-H. Sanjit Singh
ASM’s IIBR
Abstract
Shipping is truly the lynchpin of global economy and international trade. More than 90% of world merchandise trade is carried by sea and over 50% of that volume is containerised. India has 12 major and 187 non-major ports along its 7517 km coastline. Cargo traffic handled by Indian ports in 2006-07 was 649 mt, of which 80 mt (6.0 mTEUs) was the container traffic. `
Trade growth, penetration of containerisation, and hub and feeder service structure are the drivers of the container traffic growth. India 's export import growth has grown around 24 per cent during 2002-07. Its impact on container traffic growth could be higher, since a greater share of trade is moving towards finished goods requiring containerization. Presently, containerized cargo represents about 30% by value of India 's external trade, and this proportion is likely to grow as containerization increasingly penetrates the general cargo trades and increases its share from the current 68 per cent to nearer international levels of around 75-80 per cent [World Bank, 2007]. Considering various growth scenarios and studies, it appears that international trade growth and penetration would result in 21 mTEUs by 2015-16.
Looking at the container traffic growth in the past few years, there seems to be scope for hub operations in India, possibly one each on the east and west coast. As per the projections made by a study of the Jawaharlal Nehru Port Trust, 9 mTEUs of the Indian traffic of 21 mTEUs will be hubbed in 2015-16 [JNPT, 2006]. If 50 per cent hubbing were to take place in India, then 4.5 mTEUs will be hubbed in India, implying transhipment handling of 9 mTEUs. This requires port handling capacity of 30 mTEUs, with 9mTEUs as transhipment at hub ports.
Further, shipping trends will play an important role in deciding whether the Indian ports have potential for hub operations.
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