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After Maersk exit, Chennai pins hopes on transshipment

      11/09/2018

Transshipment demand appears to have become an alternative, promising cargo source for the port of Chennai, which suffered a big blow last month when Maersk Line shifted all operations from the port to the nearby new Adani Group terminal at the port of Ennore for productivity reasons.

New port data indicate Chennai is slowly but steadily establishing a footprint in transshipment handling, with that volume increasing to 44 TEU in October, from 14 TEU in September, after breaking in to that market with 4 TEU in July.

Two factors have essentially contributed to the freight uptrend: the government’s liberalized cabotage policy that allows foreign-flag ocean carriers to transport laden cargo/empty containers between Indian ports, enacted May 21, and the port’s tariff discount program for vessels handling transshipment cargo, which started July 1.

Still, although the transshipment business is a positive sign and has the potential to somewhat lessen the impact of ocean carrier cargo diversions, such as the aforementioned, Chennai’s October volume took a hit. It declined 7 percent to 140,500 TEU, from 150,444 TEU in September.

However, thanks to intermodal train service improvements — including a shuttle operation between Chennai and Tondiarpet — October rail volume remained relatively flat month to month at 9,180 TEU, statistics show.

Maersk shifted its weekly, intra-Asia Chennai Express Service (CHX) from Chennai to Ennore, a change that began with the Maersk Leonidio call on Oct. 20.

Ennore is about 15 miles north of Chennai. With an annual capacity of 800,000 TEU in the first phase, the Adani Ennore Container Terminal (AECT) started partial operations in October 2017, followed by an official opening in early January. However, vessel-related port price complications — reportedly pegged at a cost difference of $20,000 for an Ennore call verus its peers — kept mainline carriers away, despite other infrastructure attractions, especially good highway connectivity. The fact that AECT handled just 2,638 TEU in the January-to-September period illustrates that struggle.

However, with the CHX addition, Ennore generated 1,390 TEU in October — possibly from two calls, according to the latest port data.

Maersk (India) earlier said it sees Ennore as a potential South India gateway and expects considerable productivity benefits from a congestion-free operation there.

Moreover, although that’s bad news for Chennai, the silver lining is that more carriers are said to be considering reworking their service routings to develop Chennai as a transshipment point for freight to/from that region, which has thus far largely relied on mainline connections at foreign hub ports.

The Chennai port trust encompasses DP World-operated Chennai Container Terminal (CCTPL) and PSA International’s Chennai International Terminals (CITPL), and the port’s annual capacity is more than 3 million TEU.