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CONTENT 1. Introduction 2. Issues a. High Volatility & Declining Profitability of Shipping industry b. Environmental Safety & Standards in International Shipping c. Global Terrorism & Piracy d. Economic Recession & Shifting Global Trade Patterns e. Privatization of Terminals & Other Port Services f. Multiple Cargo, Common User Port to Specialist Terminal based Ports g. Separation of port authority & port operator 3. Future prospects & opportunities a. Privatization of ports and terminals b. Emergence of global port developers & operators c. Significant Use Of Information Technology d. Integration of ports in logistics value chain e. Integration of shipping in logistics and global supply chains 4. Field report 5. Reference

INTRODUCTION A port is the interface between intercontinental transport and a place in the hinterland being considered for production, assembly, or final distribution. While ports have always been important nodes in the logistics system, globalization of production has sharpened the need for ports to be value adders, and has given ports a unique opportunity to become valueadding entities. Port capability and efficiency can greatly influence the decision for locating a plant or distribution center, and often determine whether a local producer can compete globally or regionally with other producers. The challenge is for ports to relate to the needs of their customers and assist them in improving their competitive positions by providing low-cost, efficient port services. Major technology changes are taking place in the ocean shipping sector that affects requirements for port infrastructure and services. The ocean transport industry is employing increasingly sophisticated information technology (IT) to manage logistics; and they have to be the key players in future IT logistics network in order to remain competitive. With over 90% of world trade channeled through ports, efficient and effective port operations management is a critical requirement to maintain strong customer relations and port reputation. Airports and seaports around the world face many modern operational challenges and to ensure the highest level of service, ports require intensive port operational planning and set procedures. Legislative and corporate regulation, port security, and logistics are only a few of the challenges that must be addressed on a daily basis. In addition, ports require intricate risk management functions to ensure that accidents are avoided, and if they do happen, the proper response is available. Ports constitute an important economic activity in coastal areas. Ports are also important for the support of economic activities in the hinterland since they act as a crucial connection between sea and land transport. ISSUES a. High Volatility & Declining Profitability of Shipping industry

Major global shipping companies are at the receiving end of market volatility. Worldwide shipping industry is in a transitional phase of readjustment and restructuring and is likely to witness significant level of consolidation through mergers and acquisitions and expansion to new regional trade hubs.

b. Environmental Safety & Standards in International Shipping Poor monitoring and compliance with international safety standards by Flag of Convenience (FOC) countries, coupled with recent ship accidents. The incremental costs of a stringent international safety regime, administered multilaterally by a number of countries, is bound to further impact the operations of global shipping companies through added costs of redundancy and renewal of fleet.

c. Global Terrorism & Piracy Following the September 11 happenings, the worldwide concerns about national security have resulted in unprecedented demands on national ship registries and ocean liners to fall in line with series of new regulations and norms for port clearance of cargo. This is likely to substantially increase legal and insurance costs and other indemnity obligations and liabilities and build greater pressures on reorganization of terminal loading operations, which will affect shipping. The US Terrorism Act, which seeks to tightly regulate cargo movements into and out of the United States, a major partner in world trade, now comes into force from December 2002 and is likely to seriously impact US bound cargo logistics and trade supply chains across the world.

d. Economic Recession & Shifting Global Trade Patterns Economic recession in the developed economies and important shifts in global trade that have come about since the formation of WTO have thrown up a number of surprises for international shipping. Despite global merchandise trade volumes having increased, the shipping freight rates have come down, mainly due to many structural changes in the

world trade. Restructuring of the world trade flows is leading to concomitant effects on the global shipping patterns.

e. Privatization of Terminals & Other Port Services Privatization involves a transfer of deed of title from the public sector to a private undertaking. It is important to recognize that since full privatization entails a shift of real ownership, any ongoing governmental role or policy considerations must be dealt with in the terms of sale or through regulatory mechanisms. A potential investor, therefore, will be keen to know the existing and future regulatory climate within which he is expected to operate as that will affect the value of the opportunity. Any perceived constraints (or the absence thereof) through deed restrictions or land use regulations will affect the price to be paid by the private investor. The absence of any restrictions may generate a certain price while limitations on the cargo handling functions may generate another and a severe regulatory climate on flexibility, diversification or expansion

f. Multiple Cargo, Common User Port to Specialist Terminal based Ports Ports have been historically viewed as one stop omnibus solution for all requirements of shipping, in terms all loading and unloading operations for multiple types of cargo, on a common access basis. However, the worldwide trend in port development is now veering towards terminalisation of ports with focus towards freight specialization. LNG terminals, Container terminals that involve high capital costs and intensive deployment of cargo handling equipment and other facilities are some instances of what is likely to emerge as future trend in port development

g. Separation of port authority & port operator There is a global trend in the port sector towards growing separation of port authority from port operator impinging on all existing institutional models of port organizations. Port organizations all over the world are experiencing wide ranging institutional reforms,

as a part of the adoption to new demands of shipping and international trade. Port authority is increasingly getting focused on policy and regulatory role while a range of private port operators and port service providers are taking over a range of port related services.

FUTURE PROSPECTS a. Privatization of ports and terminals

The port sector all over the world is increasingly veering towards greater involvement of private sector participants in creation and management of various port assets and services. The privatization of ports is taking place in terms of both part privatization of existing public ports and Greenfield port projects.

b. Emergence of global port developers & operators

With the development of liner shipping and container cargo trade, the demands on port infrastructure have become quite intensive both in respect of level of capital investment as also highly sophisticated technology for container handling. Leading international shipping lines like P&O, Maersk, Sealand and APL have thus, long since diversified into managing the port operations at several locations, especially in regard to container terminal operations, combining the advantage of themselves being in the container line trade. Today, port developers and operators work on a global scale and are likely to dominate much of future port development.

c. Significant Use Of Information Technology Growing importance of information technology promises to make port operations highly Cost efficient and substantially improve cargo handling turnaround times. EDI and MIS systems using a range of customized software and network technology make shipping and port operations highly standardized and customer friendly.

d. Integration of ports in logistics value chain

Like in case of shipping lines, the port operations too are likely to become increasingly part of a common logistics value chain that extend from point of origin of cargo to the final destination of cargo in terms of a door to door delivery cycle. Ports have to increasingly strive to facilitate in expediting the movement of cargo by ensuring that ships enter their berths to unload cargo and leave them after loading cargoes in minimum possible time and cost. Inability to deliver customer expectations is bound to shift the cargo to another port in the fast emerging competitive market framework.

e. Integration of shipping in logistics and global supply chains

Major international shipping companies have themselves now started integrating their services into a broader spectrum of doortodoor delivery systems, incorporating railroad haulage movements of cargo, thereby substantially supplementing their ocean freight income. With global trade supply chains set to further expand with growing customer demands on cargo turnover time and costs, the shipping industry is bound to go through a major redefinition as a part of a larger maritime logistics web.

A. FIELD REPORT Mundra Port and Special Economic Zone Limited (MPSEZ), Mundra Port and Special Economic Zone Ltd (MPSEZ) is one of the largest privately managed ports in India, promoted by Adani Group which is one of the fastest growing business houses in India. It is Indias first multi-product port-based special economic zone. Mundra Port, located in the north of Gulf of Kutch, has Natural and location. The port is well connected through rail, road, air & pipelines. The draft depths of Mundra port makes it easy to handle the future generation of large size vessels carrying bulk, container and crude oil cargo. The port commenced its operations with one berth in October 1998. Mundra Port Special Economic Zone Limited (MPSEZ) was incorporated in November 2003, to set up an SEZ at Mundra. MPSEZ was merged with GAPL in April 2006 and the company was renamed as Adani Ports and Special Economic Zone Ltd, to reflect the nature of business It consists of 22 berths with a total quay length of 6.5 km, ten berths for handling dry bulk & break bulk cargo, three berths for handling liquid cargo, six container berths including a ro-ro berth, three mechanized import cargo berths and 2 single point moorings for crude oil imports. The port also entered into long-term contracts with its clients. It scaled up port infrastructure ahead of demand and invested Rs.12,000 crore in developing the port. It laid great emphasis on mechanization of cargo handling thus ensuring optimum turnaround time a key yardstick of efficiency. The turnaround time is less than a day at Mundra compared to Kandla which is more than two to three days. Its coal handling capacity is 46.5 MMT, cargo handling capacity is 90.7 MMT and power generation capacity is 5320 MW. Following are the key points captured during our visit. Port Infrastructure details: 1. Cargo Terminal

1.1. Container Terminals


Mundra International Container Terminal (MICT)

MICT has the most sophisticated and technically advanced port facilities in the Indian Subcontinent, strategically located at Mundra port in the State of Gujarat, MICT is the closest gateway to the largest cargo generating regions of North and Northwest India. From its inception in 2003 MICT has had alternative thinking as part of every aspect of its business. The result speaks clearly through the volume it handles today, and the confidence it has built up within the trade community. From handling 20,000 TEUs in its first year of operations, today MICT has developed the port into a million TEU port. Driving this customer acceptance is MICTs emphasis on enabling the faster turnaround of vessels by increasing operational efficiency. MICT has today emerged as Indias most promising mainline port receiving nearly 70 vessels each month including 14 mainline services. MICT has invested in advanced port management IT systems and state of the art equipment which are at par with the best in the world. MICTs USP is that with a draught of 17.5m alongside, and the terminal is one of the few container terminals in India with an ability to handle the large 10,000 TEU vessels that require a deep draft.


Adani Mundra Container Terminal (AMCT)

The terminal operates 24 hours a day, all year round and has no tidal restrictions. The terminal uses a real time tracking system. The terminal is equipped with the most modern equipment like Electric RTG. Installed capacity is 1.25 million TEUs per annum. It has the capability to berth and handle the latest containers vessels sailing around the world. It has two in-line berths with a total quay length of 631 metres and alongside draft of 17.5 metres. It has 4,014 TEUs ground slots for container storage.


West basin

West Basin is being developed as the world largest capacity bulk import terminal with international standard norms, excellent storage infrastructure, eco-friendly and world class technology with total capacity of 50 MMTPA. The project is being constructed in two phases Phase 1 = For 33 MMTPA Cargo handling (03 Berths- Single quay of 1126 meters, width 38.82 meters) Phase 2 = For 50 MMTPA Cargo handling The facility is strategically located 09 miles west of Mundra Port. The site has good rail links and natural & dredged deepwater channels suitable for vessels of Displacement- 266,000, Loa- 325 meters, Beam- 55 meters.


South Basin

The terminal has all Cargo handling activities in port, including warehousing and storage, internal transportation and cargo loading and unloading round- the-clock. This basin has two RO-RO cum service berths, one Port craft berth and back up facilities for these Terminals, by way of container Yard, Rail Sidings, Open Paved Area and requisite buildings, Utilities etc.

1.2. Single Point Moorings


Adani Port SPM

In order to handle liquid cargo of very large crude carriers (VLCC) and ultra large crude carriers (ULCC), the port has established a Single Point Mooring (SPM) facility. The SPM is located at the distance of 4 nautical miles ( approx. 8 km) offshore having water depth of 32 metres for handling VLCC and ULCC upto 3,00,000 lacs DWT (tons in dead weight). SPM is capable of evacuating crude at the rate of 8,000 to 12,000 tons per hour (THP). Mundra port has in principle approval for 4 (Four) SPM (Single point mooring) of which 2 are fully operational.


HMEL SPM-1 (developed, maintained and operated by HMEL)

HMPL is wholly owned subsidiary of HMEL, a joint venture between Hindustan Petroleum Corporation Limited (HPCL) and Mittal Energy Investment Pte Limited (MEIL), Singapore - a L. N. Mittal group company to set up a refinery complex with 9 million metric tonnes per annum (MMTPA) capacity at Bhatinda (Punjab). To meet the crude receipt & storage facilities as well as to transport the crude for HMEL refinery, HMPL has set up a Crude oil terminal (COT) and Single Buoy Mooring (SBM) at Mundra Port, Gujarat and a 1017 km cross-country pipeline for transportation of crude oil from Mundra to Bathinda.

2. Mundra Multi-Purpose terminal It handles multiple types of cargo as shown below. Berth nos Terminal-1 Terminal-2 Berth-1 Berth-2 Berth-3 & 4 Berth-5 & 6 Berth-7 & 8 Berth-9 Berth-10-12 Type of cargo being handled Bulk cargo Liquid cargo Multiple dry & liquid MHC-6 nos. MHC - 4 nos.

Terminal no.

Equipment make & no.

Bulk, break bulk & project cargo Agri. Products


Break bulk & steel cargo

MHC -3 nos.

CT-2/Adani Mundra container terminal (AMCT) / RORO Berth-3 for Containers, Project cargo and Cars (239 cars/hour) Rubber Tyre Gantry (RTG) Cranes 6 nos.

RORO vessel

Terminal no.

Berth nos

Type of cargo being handled be Coal

Equipment make & no. Rail mounted quay Crane (RMQC) -4 nos.

CT-3/Mundra international container terminal (MICT)/ basin south



berthed depending on LOA, subject to minimum of 35m clearance between each vessel. 4 berth Container cargo / Project

Rail mounted gantry crane (RMGC) -2 nos. Rail mounted gantry crane (RMGC) 4 nos. Reach stacker, 4 nos. Grab ship un loader -7 nos.

West basin

Liquid cargo of very large crude carriers (VLCC) and ultra large crude carriers (ULCC)



Mooring - 2 no.

Capable of evacuating crude at the rate of 8000-12000 tonns / hour Port has potential to accommodate 4 SPMs

3. Cargo handling equipments Silent feature of cranes of APSEZ are given below: a. b. c. d. e. Mobile harbor cranes (MHC) handling capacity of 750 tons per hour Ship loader of 1000 tons per hour capacity Rail mounted quay Crane (RMQC) : 37 nos of moves/hour Reach stacker : Capacity is 40T & max trolley speed = 25 moves/ min Empty Container Handler (ECH) : Trains capacity is 40trains/ day

4. Fertilizer Cargo Complex Fertilizer Cargo Complex (FCC) for bagging and evacuation of fertilizer cargo. The FCC is a fully mechanized state-of-art dedicated fertilizer handling facility with 2 operational lines and 44 bagging machines. The FCC has a capacity to bag 660 nos. of 50-kg bags per minute and an effective capacity to load and evacuate 8-10 rakes per day i.e. 25,600 tonnes per day.

It has dedicated godowns for storage of fertilizers and fully mechanized control rooms for smooth & efficient handling of fertilizer cargo. Mundra Port serves as the gateway Port to the North-Western hinterland of India. Mundra SEZ provides a convenient international trade gateway to the Middle East, Africa, Europe and America. Mundra port also equipped with state-of-the-art safety and security measures and infrastructure to ensure and protect storage. Leveraging the advantage of the multi-purpose Port, Mundra SEZ is the largest notified multi-product SEZ with state of art infrastructure, spread over an area exceeding 135 sq kms offering attractive investment opportunities for diversified large format industries.

Reference: 1. 2. Report on Trends in Indian shipping 3. Report on operational risk in major infrastructure projects