Containerization – Building Global Trade Competitiveness1

1. Introduction

India has 12 major and 187 non major ports along its 7517 km coastline. The compounded annual growth rate (CAGR) of container traffic in TEUs for the period 2001-06 was 15.1%, which is higher than the world’s average for this period. Given the growing economy and international trade, a lot of future potential is seen in this sector. This however would be contingent on the maritime sector being equipped to take the challenges emerging from (i) large shipping vessels and deeper draft at ports (ii) hub and feeder operations at ports and along the coast respectively (iii) hinterland connectivity between port and Inland Container Depot (ICD)/Container Freight Station (CFS) and (iv) terminal development on ports and in the hinterland. Other issues relate to use of Information Technology (IT) and better systems to coordinate with bodies like customs and industrial location policy (especially with respect to Special Economic Zones (SEZs).

2.

Potential of Container Traffic

India handled 649 million tons (mt) (569 mt) of cargo traffic in 2006-07 (2005-06). The total container traffic in 2006-07 (2005-06) was 80.0 mt (67.1 mt). In terms of Twenty-foot Equivalent Units (TEUs), it was 6.0 mTEUs (5.0 mTEUs) in 2006-07 (2005-06). Growth rate of container traffic is outstripping the national Gross Domestic Product (GDP) growth rate. Table 1 gives the growth trends of national GDP, total port and container traffic. Considering the current CAGR of 15.1%, the container traffic after 5 years (2010-11) will be 10.0 mTEUs and after 10 years (2015-16) will be 20.3 mTEUs. As part of the study conducted by i-maritime and IPA (in May 2006), the container traffic will be 20.9 mTEUs (low estimate) and 24.1 mTEUs (high estimate) in 2015-16.

As per the National Maritime Development Programme (NMDP) forecast, container traffic would increase at 18.3% per annum over the decade 2004-14 and major ports would have 72% share. At this rate of growth, 26.8 mTEUs will be the traffic in 2015-16.
Overall, it appears that 21 mTEUs of originating and terminating traffic is likely to happen by 2015-16 and we need to get prepared for that.

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Prepared by G Raghuram and Rachna Gangwar. IIM Ahmedabad, August 2007.

This paper is a result of deliberations held in CENTRUM (Containerization for Trade Momentum) 2006 (July 12-13, 2006) and 2007 (August 28-29, 2007), New Delhi and further data collection and analysis by the authors. We thank the CII Institute of Logistics for providing us the opportunity to participate in the conference and to crystallize the deliberations. The Institute also provided the rapporteurs who had documented the discussions in various sessions. We acknowledge their contribution.

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Table 1: Port Traffic Year
National GDP US $b 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 409 441 467 554 633 725
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Total mt 368 384 419 466 522 569 649 Growth (%) 10.2 4.3 9.1 11.2 12.0 9.0

Major Ports mt 281 288 314 345 384 423 464 Growth (%) 3.3 2.5 9.0 9.9 11.3 10.2 9.7

Non-Major Ports mt 87 96 105 121 138 151 185# Growth (%) 39.3 10.3 9.4 15.2 14.1 9.4 22.5 mt 32 37 44 51 55 62 73

827

Growth2 (%) 4.4 4.8 3.8 8.5 7.5 9.0 9.3

Container Major Ports Share** 000’ TEUs (%)
2468 2886 3366 3900 4233 4613 5437 11.5 12.9 13.9 14.8 14.3 14.6 15.8

Total 000’ Growth TEUs (%)
2468 2886 3366 3900 4502* 4998* 5964* 13.0 16.9 16.6 15.9 15.4 11.0 19.3

14.1

[CMIE, 2007; IPA, 2006] 1At current market prices 2At factor cost (constant prices) #132 mt from GMB ports *Includes traffic from Mundra and Pipavav **Share of container traffic wrt total port traffic

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3.

Drivers of Container Traffic

The growth of container traffic would be driven by International trade growth Penetration of containerisation Hub and feeder service structure

International Trade Growth India’s export earnings in 2005-06 topped US $102 billion, recording a 23% growth over the previous year. India’s import value in 2005-06 reached US $133 billion, recording a growth of 23% over the previous year. The export to GDP ratio reached 14%, while the import to GDP ratio reached 18% in 2005-06. Table 2 gives the growth of India’s import export with respect to national GDP. Table 2: International Trade Growth
Year National GDP US $b1 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 409 441 467 554 633 725 827 Growth (%) 4.4 4.8 3.8 8.5 7.5 9.0 9.3
2

Exports US $b 44.1 44.0 53.0 63.9 83.5 102.7 Growth (%) 20.1 -0.4 20.6 20.5 30.7 23.0 US $b 50.1 51.6 61.7 78.2 108.0 133.4

Imports Growth (%) 0.5 3.0 19.7 26.7 38.1 23.5

[CMIE, 2007] 1 At current market prices, 2At factor cost (constant prices)

While trade was growing at over 20% per annum, its impact on container traffic growth could be higher, since a greater share of trade is moving towards finished goods requiring containerization. Encouraged by the robust export/import growth, the Prime Minister had set a target of achieving a trade figure of US $500 billion by 2010. About 95% of India’s foreign trade by volume and about 77% by value pass through India’s seaports. Therefore, any attempt to make a significant increase in the volume of foreign trade would necessarily challenge the adequacy and capacity of Indian ports to handle the projected traffic. [http://www.publicfreight.com]

Penetration of 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

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This implies additional delay due to the feeder voyage from India to the hub port and then at the hub port while it waits for the mainline ship to call. Handling these through the Indian transshipment terminal would result in savings of between Rs 6.insufficient traffic . container traffic is projected to grow from 4.cabotage law . January 28. Dubai and Salalah (west).the revenue from the transshipment remains with India . the commodities that are containerized include engineering goods.5 mTEUs per annum. there seems to a scope for hub operations in India. In the absence of a hub port in India. 2007].general cargo trades and increases its share from the current 68% to nearer international levels of around 75-80% [World Bank.marine side traffic from and to the hub port will move faster and cheaper Table 3 gives the container traffic and transshipment at Indian ports. With increased penetration.feedering time to other ports would reduce . transshipment and mainline movement.000 and Rs 16. This has been resulting in delay of anything between 40 hours to 50 hours at an extra cost of at least US $70 per TEU [Business Line. (in 2005) to around 21 mTEUs by 2015 [World Bank. a majority of the country's containers are currently transshipped through other ports ie Colombo (just south of India). agricultural commodities. 2004]. possibly one each on the east and west coast. Of the principal commodities that India trades in. and growth in India’s trade.insufficient infrastructure including draft requirement for a mainline ship The advantages of having a hub port in India would be . textiles and readymade garments. pharmaceutical products (bulk formulations) and machinery (auto and electronic). 2007]. The reasons for a hub port not evolving in India are . the percentage of transshipment is a very small share of the total traffic. Hub and Feeder Given the container traffic growth in the past few years. Singapore (east). implying that Indian ports are really not providing hub services. 4 . As can be seen.000 per TEU for the Indian exporter. The absence of a hub port means that a significant share of containers leaving an Indian port goes through a feeder.

with 9 mTEUs as transhipment at hub ports. where again the figure is 23 mTEUs for the year 2016.0 5437 17.3 162 3.5 2336 4803 9057 15333 22120 % 42.2 52. implying a transhipment of 1. 2006] Total Container Traffic 000’ TEUs Growth (%) 2468 13.3 9. About 7 more mTEUs will need to be handled at hub ports. for every transshipment container handled at a hub port.1 62.9 In terms of port traffic. 5 . 9 mTEUs (43%) of the Indian traffic of 21 mTEUs will be hubbed in 2015-16.5 41. If 50% hubbing were to take place in India.9 mTEUs. two more handlings would be required at ports.9 Transshipment 000’ TEUs % 25 1. Developing India’s container ports to enable direct calls by mainline vessels would provide Indian shippers better access to global markets. one at the same hub and another at the feeder port.7 7.0 2886 16. 0.9 3366 16. presentation to World Bank.4 26.2 34.5 56. Hubbing in India can and should develop.9 51.0 8. then 4. This requires port handling capacity of 30 mTEUs. implying transhipment handling of 9 mTEUs. May 2006] As per the projection above.8 5192 10691 21197 40365 73733 312 802 1908 4238 8848 5. This is conservative. 9 mTEUs from neighbouring hubs and nearly 2 mTEUs as transshipment (implying 1 mTEU will actually be feedered on the coast).95 mTEUs (11%) will be hubbed in India. 12 mTEUs are expected to be direct shipment. Of this.6 208 5.Table 3: Container Traffic and Transshipment at Major Ports Year 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 [IPA. Table 4: Forecast of Direct and Hub Traffic Stuffed + Empty (Container Trade) Year Total Container Traffic (000’ TEUs) Direct Shipment (000’ TEUs) Hub Shipment (000’ TEUs) Total (000’ TEUs) Trans shipment (000’ TEUs) % 2006 2011 2016 2021 2026 5503 11492 23105 44603 82581 2856 5888 12140 25032 51613 % 51.9 187 5.9 4233 8.5 10.6 3900 15.5 mTEUs will be hubbed in India.5 4613 9.0 169 5.8 181 3.8 39. Of the hubbed traffic. Table 4 gives certain forecasts made by Jawaharlal Nehru Port Trust (JNPT) for total container traffic in India.7 [Forecast by JNPT.

we can get an insight into the breakup of the traffic across various port clusters.000 TEUs.5 15 13-14 11-13 11-12 10 <9 Size (TEU) >12.500 500-800 Emma Maersk (DWT 156. These future generation vessels would require drafts between 13-15.907.5 mtrs. Officially. and direct shift of containers to the feeder vessels.000 5. 35% of the containers handled in the west coast ports are bound for destinations closer to the east coast. as per 6 .000 TEU. Emma Maersk is able to carry around 11. currently. As per this projection. and a few as big as 12. draft 15. Shipping Trends Looking at the current as well as the future shipping trends that are likely to emerge. now retired). 4. beam 56m. Given the above three drivers of container growth. when launched in August 2006 became the world’s largest container ship ever built. which gives the evolution of container shipping vessels in different periods.000-5. clearly indicates that the size of the vessels along with their draft requirement are on the increasing trend.solentwaters. Therefore. it would be the era of large mother vessels. quicker and safe loading and unloading capabilities.000 3. as stated by Maersk.As per discussions in CENTRUM 2006. and as of today the largest ship in use. These ports would also need the infrastructural facilities like wide berthing. the regional balance can move in favour of the eastern ports. high crane handling capacity.000-12. Relevant excerpts of this are given in Annexure 1.000 4. These ships would make only a few calls at mega hub ports to/from where cargo movement would be by transshipment and feedering through the present age ships of 4000 TEU and below. followed by the ports in the southern region at 27% and the balance at the eastern region ports. hull height 30m. (The largest ship ever built was the supertanker Knock Nevis.000-10.5m) owned by the AP Moller-Maersk Group. overall length 397m. The ports in the western region (Mumbai and Gujarat) would handle at least 66% container throughputs in the country.uk] Period 20062005-06 2000-05 1988-00 1980-88 1970-80 1956-70 Length (meter) 397 335 275-305 250-290 215 135-200 Draft (meter) 15.000-14.000 10.000 1. However.co. This is the optimal route due to cargo aggregation. with a minimum of 6000-8000 TEU. Table 5. Table 5: Evolution of Container Shipping Vessels Generation Post Suezmax Suezmax Post Panamax Plus Post Panamax Panamax class Cellular Containership Converted Cargo Vessel/Tanker [http://www. With specific interventions in terms of terminal related services and connectivity. the eastern ports are underleveraged.000-2. the ports should be geared up for deepening their draft for accommodating such types of vessels. as per a World Bank study.000-4.

Table 6: Port-wise Container Traffic S No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Port JNPT Chennai Mundra* (MPSEZ) Tuticorin Kolkata Cochin Kandla Pipavav* Mumbai Haldia Visakhapatnam New Mangalore Mormugao Paradip Operating Company 1. PSA International/SICAL DP World PSA International/SICAL Port DP World/Concor ABG AP Moller Port Port DP World Port Port Port 2006-07 Total (000’ TEUs) 3298 798 393 377 240 227 177 135 128 110 50 17 12 2 5964 % 55. AP Moller/Concor 1.1% capacity in 2007. with more than 100 MW power for 25. 2007.7 6. Table 7 provides a comparative analysis of various ports in terms of their physical and efficiency parameters for hub operations. 5. Hence.2 0.000 TEUs of 200.4 6.org].1 2. The key requirements of a transshipment terminal are its strategic location. 60 meter wide. 2006] 7 .4 4. This is expected to be the limit before a major restructuring of world container trade routes [http://en. Table 6 shows the container traffic handled at ports (including the non-major ports of Mundra and Pipavav) in 2006-07 and 2005-06.9 0.2 0. IPA.0 6. 470 meter long. providing 83.8 3. DP World 2.org]. Indian Infrastructure. less need for dredging and the facility to receive higher-capacity vessels to reduce overall fleet costs.3 4.000 DWT. it is important to focus on few ports on both the coasts with deep draft.1 3. The next generation will be the Malaccamax ship. potential to reduce total transport cost using ‘hub and spoke’ arrangement.000+ TEU ships will constitute over 30% share of container movement.3 0.1 4.500 TEUs [http://en. financial savings in terms of lower land values.8 0.500 to 14.0 100.4 14.8 0.standard shipping calculations.0 1. it can carry between 13.0 Total [CI Magazine. 2007. 16 meter of draft.5 knots. The fully cellular vessels have now become the standard. Potential Hub Ports in India Given the reality of transshipment and feedering.3 2.1 100. we can conclude that hub ports in India should aim for at least 16 meter draft and feeder ports upto 12 meter draft.3 13.wikipedia.2 0. Exhibit 1 (Annexure 2) gives the type-wise distribution of container carrying vessels in the world.0 3. with 18.1 1.7 3.0 2005-06 Total (000’ TEUs) 2667 735 299 321 203 203 148 86 156 110 47 10 9 4 4998 % 53. Port 2.wikipedia. indicating that 8.0 2. DP World 3.6 6. Exhibit 2 gives the size-wise distribution.2 0.

Table 8: Direct and Hub Shipments Share of Container Traffic Direct Through Hub JNPT 55 80 20 Other Ports 45 13 87 Per cent Total 100 50 50 8 . Pipavav. both under GMB In addition. (iii) Dholera Port. As per the CRISIL Infrastructure Advisory study. About 50% of the container traffic is not transshipped and moves on the same vessel to the final destination port. 2007]. Mumbai South Cochin.5 mTEU per annum container terminal at Kulpi in West Bengal is being developed by DP World. JNPT. (iv) Maroli port in Gujarat has tendered for bidding for a container terminal. About 50% of the containers exported through Indian ports are transshipped at some point prior to reaching their overseas destination. Chennai and Kolkata account for 68%. Hazira port in Gujarat. Table 8 gives the share of direct and hub shipments for JNPT and the other ports in the country.8 mTEUs. high speed equipment. hub ports could be Mundra.*Non-major and private ports. this proportion is above 80%. Table 7: Hub Operation Readiness Readiness Level High Medium Low [CRISIL. Cochin. In the case of JNPT. Haldia. to be developed by Gammon and Dragoddar (vi) Rewas container terminal in Maharashtra is being developed by Reliance Logistics Investment (vii) Dighi container terminal in Maharashtra is being developed by Balaji Infrastructure Project Ltd (viii) Vizhinjam in Kerala is being tendered for an international container transshipment terminal (in competition to Vallarpadam in Cochin). Chennai and Visakhapatnam. average turnaround time. (i) (ii) A second container terminal at MPSEZ is nearing completion for operations. Approximately 30% of containers are transshipped in either Colombo or Singapore/Klang and another 5% in Dubai or Salalah. (v) An off-shore container terminal (700 meter) at MPT for 0. average pre-berthing time and average parcel size. while for Colombo the eastern and southern ports account for 87% [World Bank. and (ix) A 0. Mundra. Mormugao East Visakhapatnam Kolkata. owned by Shell Gas BV is being developed and will be operated by PSA for 1 mTEU per annum. Chennai Tuticorin New Mangalore. Pipavav Kandla. owned by JK Group and Adani Group will develop a container terminal. Of Indian containers transshipped in Singapore/Klang. Paradip The readiness level is based on the maximum vessel size at berth. 2006] West JNPT.

2007. water depths are low in Indian ports compared to those of neighbouring regional hubs.7 10.6% in 1980.3% in 2006.0 10.5 10.8* 17. the largest container port in the country has a draft of only 12 metres.4 10. Overall. Dubai.e.5 13. JNPT.0 12. Other ports in the region like Singapore. *Port Website.5* 12. has a draft of 15 metres. JNPT currently handles vessels of upto 4000 TEUs compared to 8500 TEUs at Colombo. giving the carrier a high 9 . obviously due to a proliferation of container ports. Perhaps even more important is the economics of the transshipment business. The market for hub services is highly dependent on patterns of ocean container trade and a specific port’s location. for example. since then the share of the top 20 ports has been increasing in a marginally steady manner to reach 56.9% in 1970. i. However.000 TEUs. 87% of all the other ports is through a hub. Table 9: Maximum Draft S No Container Terminals 1 2 3 4 5 6 7 8 9 10 11 12 13 14 JNPT Chennai Tuticorin Mundra Kolkata Cochin Mumbai Kandla Haldia Pipavav Visakhapatnam New Mangalore Mormugao Paradip Draft (meter) 12.5 12. typically US $35 per lift. one of the main hubs for transshipping Indian container cargo.5* 7. It dropped to 49. This is proposed to be increased further to 17 metres and eventually 20 metres. JNPT is constrained by its deficient draft from offering cheaper and higher quality services. showing the trend of concentration due to transshipment and scale economies in the bigger ports.5 [World Bank.It is useful to note that while 80% of JNPT traffic is direct. It is interesting to note that the share global throughput of the top 20 ports was 75.5* 15.5 11. In addition. higher frequency and lower transit times. Port Klang etc have drafts of at least 15 meter and can accommodate vessels upto 11. Table 9 gives the draft available in the various ports. there is little if any loyalty among customers and a carrier can easily exit the terminal at short notice. Despite handling a higher volume of traffic than Colombo (Exhibit 3). Rates for transshipping containers are relatively low. Colombo. Exhibit 4 gives the traffic handled at the top 20 container ports of the world. 2006] In contrast.7 11.

It has a natural water depth of 20 metres within a nautical mile from the coast due to which there is minimal capital dredging requirement. As shown in the table. significant investments for evacuation capacity are on the anvil. they take almost twice as long to reach. 10 . It is in the centre of the India’s eastern coast. Even cargo destined for China or other south east Asian countries prefers to be routed through JNPT. As far as evacuation is concerned. Exhibit 5 provides a comparative insight of the productivity at JNPT. JNPT would be the logical choice for a hub port on the west coast. both in terms of TEUs per crane/year and TEUs/meter quay/year. 6. despite enjoying a closer proximity to the north-western hinterland which generates a majority of the container traffic. The east coast ports not only take much longer. travel time and cost of moving a container from the Delhi area to JNPT and to alternate ports. The sea drift there is such that maintenance dredging requirements are also less. even though the Gujarat ports are located a little closer. Hinterland Connectivity Hinterland connectivity is probably the most critical area to ensure a seamless flow of containers and improved port productivity. continue to lose out to JNPT due to their relatively poor connectivity. neither does the JNPT have the draft for the current (and future) generation vessels nor the evacuation capability. Visakhapatnam is the most viable port for hub operations on the eastern coast. The Gujarat ports on the other hand. rather than ports like Chennai on the east coast which though closer to the destination offer poor connectivity to the northern hinterland [World Bank. However. 2007]. from an infrastructure perspective. and can even service Bangladesh and Myanmar. 2007]. and JNPT therefore enjoys a dominant position on account of both its better overall shipping service offerings and its superior hinterland connectivity. Ideally the line-haul carrier should have a long-term stake in the facility to ensure its viability [World Bank.degree of bargaining power. but also cost more than twice as much in inland haulage charges. These differences restrict competition. The terminal operated by DP World (developed and operated until 2005 by P&O Australia) has a high level of performance. JNPT is the most efficient container port in the country and is the preferred port for a majority of the country’s container traffic. This terminal has set new benchmarks in terms of efficiency. while JNPT is congested. It is an essential part of a world class logistics system that India needs to develop with a strategic focus. Mundra is better placed as far as draft is concerned. presently accounting for about 55% of the total. Table 10 presents the distance. Based on commercial criteria.

2007] *Excludes terminal charges of roughly 30% Rail Evacuation Currently. as required by the license conditions. many of the licensees have signed up with CONCOR to have access to their wagons and ICDs. Innovative B2B Logistics Solutions* Bagadiya Shipping and Bothra Brothers 3.Table 10: Inland Haulage Costs for Delhi Container Traffic to JNPT vs Other Ports Distance from Rail Transit Haulage Costs Port Delhi (Km) Time (Hrs) (Rs/TEUs) Rail* Road JNPT 1388 48 18750 32000 Mundra 1295 80 16650 20000 Pipavav 1333 70 17000 24000 Visakhapatnam 1700 67 22450 66000 Chennai 2100 90 30000 70000 [World Bank. Adani Logistics Adani Group 2. Dinesh/ETA 5. Boxtrans (India) Logistics Services* JM Baxi & Co 4. Reliance Infrastructure Leasing Reliance (ADAG) 10. and some to interior ICDs. Rail capacity is barely sufficient for current demand. KRIBHCO Category II: Rs 10 Crore (can operate on all routes except JNPT/Mumbai – NCR) 1. 30% of the JNPT traffic is expected to move hinterland by rail and the remaining moves entirely by road. CONCOR monopoly has been a deterrent to quality service. Delhi Assam Roadways 2. 2007 11 . As per discussions in CENTRUM 2006. Table 11: List of Players for Rail Container Operation Name of Company Associated with Category I: Rs 50 Crore (can operate on all routes) 1. 6. as listed in Table 11. CONCOR (own ICD)* 4. CWC (own ICD)* 3. Container Rail Road Services** DP World 9. However. 7. UAE). India Infrastructure and Logistics* Hindustan Infrastructure Project and Engineering 8. Pipavav Rail Corporation *Out of the 15 licensed operators. This has distorted the competition to an extent. Competition has now been permitted and 15 licenses have been issued. Singapore). seven have started operations **Will start in September. Gateway Rail Freight (own ICD)* Gateway Distriparks Hind Terminals (subsidiary of Sharaf Group. Hind Terminals and MSC Agency* Mediterranean Shipping Company (Geneva) APL India (subsidiary of NOL. mostly to nearby CFSs. SICAL Logistics (own ICD) 11.

With an average line capacity of 50 trains per day. a third container terminal has been commissioned.000 loaded trucks move over this corridor everyday. A fourth terminal being considered is likely to double the capacity. one of the most highly trafficked corridors in the country is a case in point (Figure 1). Presently. 12 . it is estimated that the transport cost of a container from Delhi to Mumbai Port is almost half the total logistics costs of delivering it to a destination in Europe. 2006]. which form the majority of the traffic on this corridor. less than one-third of the containerized cargo in this corridor is being carried by the Railways.Presently. unless they are addressed concurrently [Raghuram. aggregating around 30 mt annually of road freight traffic [World Bank. 2007] The overall data related to hinterland flows at JNPT in Table 12. JNPT faced an acute congestion in 2004. Roughly 40 trains on this corridor are passenger trains. 9. The Tughlakabad-JNPT (Delhi-Mumbai) line. is increasingly shifting to road transport. On average. Congestion at the railways’ Tughlakabad ICD near Delhi and on the line itself has resulted in a poor reliability of service. leaving a limited capacity for freight trains. and several sections are being operated at 160% utilization levels. bringing the total throughput capacity to 4 mTEUs. Since then. and high value cargo such as containers. 2007]. which have a lower priority. This will impose serious constraints on the facilities around the port. Inadequate capacities in the hinterland transport modes often lead to higher costs and delays on account of sub-optimal mode choices. it has been handling over 67 trains per day. for instance. Figure 1: Rail Connectivity Mumbai to North-Western Hinterland [World Bank. operating at a capacity utilization of 135%t. circuitous routing and congestion in the hinterland transport links.

These could lead to avoidable congestion and first/last mile problems. 2006] Per cent 33.Table 12: Hinterland Flows at JNPT Import ICD by Rail ICD by Road En Bloc CFS Green Channel Export ICD by Rail ICD by Road CFS by Road + Buffer Yard Factory Stuffed under Excise Seal – RTS [Chaudhuri.3 4. A. there is no explicit planning for consequential trailer movements for empty containers and empty trailer movements. The DFCCIL should evolve appropriate models. facilities for drivers etc. PPP model with ports and related stake holders should be used for rail capacity development. The currently envisaged future phases of NHDP do not provide for this. based on past experience and future requirements. Double stack would ease this to about 120 trains per day. Three such project contracts were recently annulled. About 35-45% of these would be on the stretch near JNPT. picking up an additional 25-30% from the Gujarat ports. there is no planning for trailer parking. while the National Highways Development Programme is providing inter-regional connectivity with some success.0 22. 13 . In terms of local road connectivity around ports and ICDs. Recent studies show that these could be as high as six to seven movements per TEU [Raghuram.7 3. over 190 trains would need to run per day. maintenance. (Currently. the Dedicated Freight Corridor Corporation of India Ltd (DFCCIL) has been set up in 2006. The western corridor will have container trains as its driving traffic.6 7. Road Evacuation To provide for the road based evacuation. expressway connectivity to the ports to service major flows would be essential.5 26.0 59. over 25 of which are on the JNPT Tughlakabad corridor). with its first phase being the JNPT to Tughlakabad/Dadri and Ludhiana to Son Nagar via Dadri corridors. at 30% movement by rail. 2006]. about 40 trains are running per day. Beyond just the four laning of highways.7 35. Kutch Railway Corporation and Pipavav Railway Corporation are examples. For 21 mTEU.5 + 7. not all port based connectivity projects have been successful. Similarly. and 90 TEU per train.7 To provide for the rail based evacuation.

The possibility of a dedicated sea corridor with inter-port connectivity needs to be explored. Domestic Traffic While container movement has been primarily viewed in the context of international trade. networking and information sharing. and even knowledge products. ICD/CFS Infrastructure Given that ICD/CFS business is open to anybody. out of over 2 mTEUs moved by Concor. domestic container movement is slowly picking up and needs focus for development. The concepts of SEZs and Free Trade Warehousing Zones would only further facilitate such infrastructure. During 2006-07.PPP model for roads around ports can be used with ports and ICD/CFS operators as the stake holders. However. nearly 0. 14 . local connectivity with minimum traffic interference Customs and bonded warehouse Rail connection to gateway ports Parking spaces and maintenance facility Other Issues Information Technology (IT) While IT use for container logistics would be commercially driven. policy and industry level interventions would be necessary to develop standards. Location and access. the following would need intervention. Integration with coastal and inland water transport for evacuation needs proactive consideration. • • • • 7. Technologies such as Radio Frequency Identification Device (RFID) and Global Positioning System (GPS) should be leveraged to achieve effectiveness and efficiency. there would not be a concern regarding the supply. A need for immediate attention would be the ICD at Tughlakabad. Feedering from an Indian transshipment port would naturally be a coastal movement.4 mTEUs were for the domestic market (Table 13). Most of the domestic container movement is expected to be by rail (Concor). Coastal Shipping and Inland Waterways The potential of coastal shipping and inland waterways is untapped and needs to be developed to lessen the load on the railways and road networks and bring down the costs since cost of cargo movement by sea is significantly less than the cost by road and rail. The conditions imposed on the private rail container operators reinforce the same direction. giving consideration to distance to manufacturing units.

tractor/trailers and cranes as support equipment is critical. the government has embarked on the policy of developing SEZs.562 2.848 389. As on July 31.Table 13: CONCOR Traffic Year 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 [CI Magazine.819 1. 67 are manufacturing driven while the rest are IT 15 . Opportunities in customized containerization should be leveraged.605 Total 703.490 755.976 1. There is big opportunity for India to develop a manufacturing base. Of the 154 SEZs (Table 14). China is currently the world leader in this domain.156 243. India does not have enough manufacturing base for such equipment.238 225. Korean dominance in 1992 and Chinese dominance in 2006.946 907.119 1.542 721.3 15. However. which stands at over three million in 2006.727.602.930.163 1. For example.046.7 9.481 576.238 350.661 Domestic 278.715.714 1.031.741 491. specially designed lower height containers for automobiles have permitted double stacking under wire.304 326. Exhibit 9 brings out the profile of container manufacturers.801 230. 2007] In TEU International 424. Leasing and Manufacture Availability of containers. 135 SEZs had been notified under the SEZ Act apart from the 19 that were operational prior to the SEZ Act of 2005.516 1. In the context of containers. while the standard container does not permit double stacking under electric traction wires. wagons. showing Japanese dominance in 1978.790 664. Exhibit 8 gives the annual global manufacture of containers.670 905. with the cost of leasing showing a decreasing trend (Exhibits 7).1 13.6 11.833 1.719 801.376.925 1.501 351. leasing by non-shipping line owners has been leveraged internationally for efficient use of containers.775 351. the share of the leased fleet has dropped from 50% in 1981 to 40% in 2006 (Exhibit 6).2 15. but also for the export market.266 Annual Growth (%) 2.105.618 1. the leased fleet has utilizations over 90%. India should be able to compete by manufacturing containers at less than Rs 60.4 17. not only to cater to our requirement.000 per TEU.974 1.058 1.329 291. At even US $1500 per TEU. With better IT for container tracking.7 12. 2007.9 11.8 7.0 This would also create an opportunity for customised containerization.383.556. The manufacturing base in India is small and could do with a focus on incentivized growth. Location Policy of Industries Including SEZs As part of evolving world class export and import logistics.231. as specific segment volumes increase.460 373.251.

Regulation It is important to ensure appropriate regulation for the following: Licensing Issues of ensuring sufficient competition. the question has often been raised as to whether we need the TAMP. Gujarat has been proactive in this through a policy of port led industrial development. and even if so. There are guidelines on there being at least two operators in a port and no more than two terminals per operator. along with capability to deliver with appropriate national security would be key criteria in licensing. The same would apply for industries. Of the 67. These guidelines need to be reviewed and linked with TEU capacity and not number of terminals. 39 are coastal and the rest 28 are away from the coast and would hence require focus on connectivity. There have been debates on private sector monopoly. Recently the PSA International operated container terminal at Tuticorin port 16 . Operational security at ports including screening of containers has gained significance after 9/11. it would be a good idea to locate SEZs near ports. Port Tariffs While India has a Tariff Authority for Major Ports (TAMP). Security Security was a matter of concern in the context of Hutchison bidding for Chennai Even DP World had to give up some of its US acquisitions due to perceived security concerns. whether the regulation should be cost based. Exhibit 10 provides an insight into the concentration of terminals (62% of throughput in 2006) operated by the top five terminal operating companies. P&O Australia has now been taken over by DP World and the same issue continues.and IT enabled services based. Table 14: Location of SEZs Coastal Manufacturing 39 IT/ITES 24 Total 63 Non-Coastal 28 63 91 Total 67 87 154 As far as possible. where a focus on appropriate zoning of industrial development to minimize connectivity requirements with planned linkages including by Inland Water Transport would be essential. when P&O Australia won the bids and operated many terminals in the South Asian region.

which seem to be a rather continuous activity of this business. The main trade of is between protection for Indian flags versus more competition and supply. the following issues need consideration: 17 . While these were frowned upon. Customs Customs need to become more process friendly with increased usage of green channel. like and the anti Independent of conferences. Environment and conservation Safety Quality of service Dispute resolution Concluding Issues Based on the above analysis. it would appear that cabotage must be lifted as a matter of long term policy. cabotage should not become a sabotage! Other Areas of Regulation (which are not being elaborated) • • • • 8. especially with Electronic Data Interchange. which has increased from 38. Shipping Line Conferences In the container shipping business (which is a hangover of liner business). As was voiced in CENTRUM 2006.8% in 1990 to 72. there is an increasing market concentration in the container shipping business. Recently. This is reflective of the mergers and acquisitions. Cabotage The cabotage rules of not allowing foreign flag vessels for coastal shipping need to be reviewed. can be used to create much required Origin Destination (OD) data for traffic profiling. In today’s world of liberalization led growth. It would appear that with the number of terminals that India has and is developing. The data gathered by customs. Competition Commission of India raised the issue that such conferences were competitive and that shipping lines should set tariffs and compete independently. Exhibit 11 gives a perspective on the concentration of container shipping among the top 20 carriers. competition is increasing and the market itself can regulate the tariffs.resisted the reduction in tariffs imposed by TAMP and consequently reduced their throughput.7% in 2006. cartel conferences of shipping lines operated in route based markets to control schedules tariffs. they were never regulated. An attendant measure would be to provide the same concessions to coastal shipping as international shipping.

Technocrats. There should be a flexible framework in place for terminal development by private parties under a landlord port. OD data on port traffic should be systematically gathered and published. The 18 . maritime organizations. o Top management stake holding. from about 4 mTEUs now to over 14 mTEUs by 2015. This is necessary to drive down costs. Of this about 6 mTEUs of capacity is expected to be needed in the Mumbai cluster. Labor is not always in favour and needs to be dealt with. with the Mumbai and Gujarat port clusters together requiring capacity additions on the order of 10 mTEUs. o Tendering and bidding should be done in a time definite manner. and – co-ordination function such as coordination among governmental agencies. These three port clusters would then account for 14 mTEUs of the 16 mTEUs of additional capacity needed for container traffic through the year 2015. decision-making authorities and planners of the city. especially through the civil service. o Training to bring in a supply chain and marketing mind set among executives of all stakeholders in this sector is critical. under the commonly shared long. EDI based data would help. Maritime Trade Practices Act.o Landlord port with privately operated terminals would be the way forward. with appropriate incentives and accountability should be brought in. The 191 mt or 15 mTEUs capacity shortfall for container traffic projected for 2015 would only partially be filled by capacity expansions planned under the NMDP.range policy and planning – facilitation/promotion function such as provision of port EDI. o Acts governing ports and related activities need to be reviewed and liberalized (MS Act. etc). infrastructure development. inter-port cooperation and strategic marketing o There is not enough focus on scale of container terminals. and another 4 mTEUs in the Gujarat cluster. IP Act. asset management – regulatory function such as maritime safety. IPA should drive this with support from Customs and Concor. The other cluster where a large increase in container traffic is expected is in the Cochin/Tuticorin cluster where an additional 4 mTEUs of capacity will be needed. Dredging is an example. environment protection and fair competition. There are significant beauracratic delays (eg second terminals in Tuticorin and Chennai). The largest increases in container traffic are expected to occur in the western region. Achieving this level of capacity increases in the Mumbai. is not compatible with strategizing port development. o Global tendering would be essential to get the most competitive supply. Gujarat and Cochin/Tutitcorin clusters would largely address the container traffic requirements through the year 2015. Existing ports should be empowered for this o There should be clear delineation of roles between landlord and operator. This does not exist at JNPT presently (JNPT vs JNPCT) o The public port authority will focus more on – landlord function such as long-term planning.

However. 40th Anniversary Issue. market forces will drive the actual berth development. JNPT and Mumbai port. This appears to fit well with the strategy of developing container facilities where the demand is greatest (the western and southern ports) and in the southern cluster which has proximity to international shipping routes [World Bank. Containerization International. Commercialization and private involvement through PPP contracts is the key for building global trade competitiveness through containerization. this could be as low as 15 km. Ahmedabad. 7. Containerization International. Levinson. providing for a reasonable 70% occupancy.’ Drewry Maritime Services. Indian Institute of Management. i-maritime and IPA (2006). So there is a need for atleast 30 more berths. May 08. New Line. and some of these are already being planned or under implementation such as at Mundra and Rewas. IPA (2006). For 30 mTEUs per annum. New Delhi.’ Princeton University Press. An additional nine berths have been signed up as stated earlier in this paper. While this is a target. 3. as per normal international standards of 1000 TEUs per annum per mt of berth length. Centre for Monitoring Indian Economy CRISIL (2006). this translates to 70 berths. 5. we need 21 km. May. berth productivity can be doubled and the investment requirements brought down. 10. 2006. A (2006). With JNPT standards. 2007. Indian infrastructure for logistics is poor compared to world class and at best reactive to demand. A detailed cost benefit analysis. ‘India Port Sector Strategy – Demand and Capacity Assessment Study. References Chaudhuri. we need 30 km of berth length. 6.’ Presentation. 2. At 300mts per berth. G (2006). 2007]. Currently we have 27 berths. The remainder would need to be developed in the State ports sector primarily through private investments. CI (2007a). December 2006. keeping in view the costs of accommodating large vessels and benefits of increased productivity including due to hubbing in India needs to be carried out. CRISIL Infrastructure Advisory Study.’ Working Paper No 2006-04-09. 4. ‘A Diagnostic Study of Jawaharlal Nehru Port Trust.’ Indian Ports Association. New Jersey. Marc (2006).5 billion based on a 300 mts berth cost of US $250 million (Rs 1000 crore). April 2006 1. By JNPT standards where demand is continuously available and productivity is high.’ Draft Final Presentation. CMIE (2007). Raghuram. The additional investment required could be of the order of US $7. The investments proposed under the NMDP include large expansions of container handling capacity at Tuticorin. ‘Container Shipping Services from Asian Ports. There is need for continued focus on quality infrastructure development with speed. 2007. Cochin. and focusing on Suezmax vessels at hub ports. 19 . ‘The Box. 9. 8. CI (2007). ‘Major Ports of India. Drewry (2006). ‘De-regulation within the Rail Market.NMDP envisages the creation of an additional 11 mTEUs of container handling capacity in the near term.

’ June 26.solentwaters.org 13. http://en.co.11.public-freight. http://www.uk 14. http://www. 12. World Bank (2007). ‘India: Port Sector Development – Possibilities for Accelerating Growth.wikipedia.com 20 . 2007.

The first two drivers can be modeled and their impact on future traffic volumes estimated.1 21. the port clusters expected to have the largest volumes in 2015 are the Mumbai cluster with a traffic volume of 10 mTEUs (using 12 tons of cargo per TEU on average).9 5.1 0. (iii) changes in Indian and global shipping patterns that impact routing decisions of Indian shippers and (iv) actions by local governments and port managers to increase the port’s reach in the country’s container trade.9% between 2000 and 2005 and western ports handled roughly 3.7 4.2 2. accounting for roughly a quarter of the container demand.3 116.5 0. The Southern hinterland is the next largest.7 6.9% per annum during 2000-05.Annexure 1: Excerpts from World Bank Study While container traffic has grown across the country.1 4.1 0.9 4. The bulk of the demand originates in the north-western hinterland which accounts for close to 70% of the container cargo in the country. (ii) improvements in port connectivity that make specific ports more accessible.1 9.4 31. and traffic there grew at an average of 13. As shown in Table given below. Region Port Clusters Kolkata Paradip Visakhapatnam Total Chennai Cochin/Tuticorin New Mangalore Mormugao Total Mumbai Gujarat Total Grand Total Traffic (mt) 2005 2015 4.4 174.6 8.2 58. What is most noteworthy in the Table is the increase in projected traffic at some port clusters (Visakhapatnam.3 20.4 4. The third driver can also be modeled. and the Cochin/Tuticorin cluster with about 4 mTEUs.6 Eastern Southern Western The factors driving future traffic demand in the various port clusters are (i) regional economic growth and creation of new manufacturing sites.4 0. The western ports catering to this vast hinterland have experienced a container traffic growth rate of 16.5 37.7 9.9 25. the growth has not been uniform.4 8. it is unlikely that a major shift in the relative size of these regional shares will occur in the near term. and achieving a handling capacity in excess of 21 mTEUs by the year 2015 presents an enormous challenge.7 mTEUs. Gujarat. Present container handling capacity at India’s ports is estimated to be around 5.6 3.3 5. the Gujarat cluster with around 5 mTEUs.1 0. Cochin/Tuticorin) where the projections call for a 10 to 20 fold increase by 2015. Based on the growth and industrialization trends in these regions of the country.1 57.4 2. though with less precision as it 21 .3 0.6 72.6 3.0 0.1 267.0 4.5 46.6 12.5 Share (%) 2005 2015 8 4 0 0 1 5 9 8 17 10 10 17 0 0 0 0 27 27 54 44 11 22 64 66 100 100 Increase 2015/2005 1. JNPT near Mumbai alone accounted for over 55% of the containers handled in the country.1 mTEUs in 2005.4 15.

1). see Box 2. The private ports of Mundra and Pipavav in Gujarat have already made significant in-roads into the container traffic of the northwestern hinterland and other Gujarat ports have similar plans. but it is expected to face increasing competition from ports in the Gujarat region. Traffic growth at Cochin will be dependent on the development of the International Container Transshipment Terminal (ICTT) at Vallarpadam. the absolute volume of cargo will continue to increase and is expected to almost quadruple over the period to 2015. JNP is forecast to remain India’s major container port. the proposed Rewas-Aware port south of Mumbai. 22 . or 32% of the total throughput in Indian ports. The recent acquisition of P&O Ports by Dubai Ports World gives the latter control of ICTT as well as Colombo Port which is an established transshipment terminal with major expansion plans of its own (Colombo South Harbor. In Maharashtra. envisaging the four southern ports of Cochin. traffic through southern ports is expected to increase more than four-fold between 2005 and 2015. Southern Ports’ Container Traffic As shown in Table 2. handling at least two-thirds of the container throughput in the country in 2014-15. while JNP’s market share may decline. The last is the focus of a strategy development and business planning activity now being undertaken by each of the Major ports at the urging of the Planning Commission.2. The fourth driver is dependent on decisions at the local level that create competitive edge and determine who gains and loses market share. So the current JNP/Mumbai 57% share of container traffic will likely be eroded as competition in the region increases. Tuticorin. Western Ports’ Container Traffic Ports in the western region (Mumbai and Gujarat clusters) are expected to continue to dominate India’s container trades.is a daunting task to predict how future global shipping patterns will evolve and impact shippers routing decisions. Developments are also planned at Tuticorin where the Port of Singapore has the concession for container terminal development. The forecasts implicitly assume that hinterland connectivity of these ports will be improved in a timely manner. The NMDP traffic projection for these ports is even more bullish. Chennai and Ennore handling 4 mTEUs in 2011-12. there could be a significant shift in the division of traffic handled among the ports in the region. This forecast of market share reflects the proximity of western ports to major manufacturing and consumption centers in the north-western hinterland. could also create additional competition for JNP. While the regional shares of traffic remains relatively stable. All of these facilities coming on stream should create the conditions for strong competition in the transshipment business and provide shippers with adequate options for efficient container services. Connectivity issues for the Gujarat ports are being resolved through various innovative public-private partnership arrangements for road and rail connectivity. with a market share of 27%. and their access to the extensive container services circulating in the Arabian Sea area. However.

and 3) poor connectivity to the markets and manufacturing centers of northern India. Vizag port shows high growth primarily due to the fast developing state of Andhra Pradesh in its hinterland and its growing consumer economy. Among eastern ports. [World Bank. Consequently. 2007] 23 . east coast ports are expected to continue to rely on feeder services to hubs such as Colombo and Singapore which will allow them to take advantage of this systemic imbalance. it is often more economical to service this trade using the west coast ports which have better access to the mainline container services in the Arabian Sea. While some Eastern ports would appear logical gateways for containers moving between India and the far-east. Consequently. Another factor affecting the availability of direct shipping services from the east coast to the Far-east is the systemic imbalance of empty containers heading east from the Gulf countries which results in low freight rates on exports from India to the Far-east. container traffic at the eastern ports show limited potential overall. however.Eastern Ports’ Container Traffic Ports in the east are handicapped in so far as container traffic is concerned by 1) a limited manufacturing base. The latter could be corrected with infrastructure improvements but the former two are more difficult constraints. 2) distance from the main international shipping routes.

1 9.3 22.490 8.175.5% of total ship capacity.040 3. 24 .7% in 2007.645. This increased to 83.000+ TEU ships currently account for only 2.2 100.2 42. in 1980.999 Below 2.1% by 2007.565 No of Ships (%) 32.547 1.080 11.9 17.858.4 36.999 2.9 35.181 No of Ships (%) 13. However.119 1.7 14. In terms of world container capacity.000+ TEUs which will account for 32.040 No of Ships (%) 2. 2007] No of Ships 162 170 436 413 1.858.0 100.5 22.2 54.533 248. 2007] No of Ships 831 1.3 31. 13.4% which increased to 46.999 Below 2.0 Economies of scale have dictated an upward trend in sizes of container ships in order to reduce costs.484.000+ 5.9 7.000 Total [CI Magazine. These ships have an advantage over other types due to guided and fast loading.6 100.9% of the total ships and 10. the share of fully cellular ships to the total ships was 32.0 Capacity (TEU) 9.999 2.000-7.961 Capacity (%) 83. MP=Multi-purpose There has been a polarization towards fully cellular ships at the expense of multi-purpose/semicontainerships.948 Capacity (%) 52.883 1.0 Capacity (TEU) 799.0 [CI Magazine.575.547 Capacity (%) 10.0 2007 (Orderbook) Size (TEU) 8.0 Capacity (TEU) 1.Annexure 2: Global Data on Containerization Exhibit 1: Type-wise Distribution of World Container Carrying Vessels 1980 Vessel Type FC MP Others Total [CI Magazine. fully cellular ships accounted for 52.511.279 455 2.3 32.3% share.000+ 5.9 11.868.0 2007 Vessel Type FC MP Others Total No of Ships 4.000-4.406 4.2 100.301 2.2 100.097 4.000-4.867 2.042.000 Total [CI Magazine.314 1.063 287. 8.1 17.177.011. Exhibit 2: Size-wise Distribution of Capacity and Share of Fully Cellular Fleet 2007 Size (TEU) 8.309 516.0 100.1 100.527.3% of the capacity of the fully cellular fleet.7 100. In 1980.3 25.7% of the fully cellular fleet ships booked in 2007 are of 8.649 No of Ships (%) 46.5 33.383 1.204 4.9 10.211 9. 2007] No of Ships 117 417 1. 2007] FC=Fully Cellular.5 16.0 Capacity (TEU) 1.4 49.101 489.672 Capacity (%) 32.7 36.000-7.334 833.

8 3.000 176.000 377.4 -11.4 31.708.1 17.411 20.2% [CI Magazine.Exhibit 3: South Asian Ports’ Throughput Port India Jawaharlal Nehru Port* Chennai* Mundra** Tuticorin* Kolkata* Cochin* Kandla* Mumbai* Pipavav** Visakhapatnam* New Mangalore* Bangladesh Chittagong** Mongla* Pakistan Karachi*** Port Qasim** Sri Lanka Colombo** Total Share of Global Throughput 2006 (TEU) Change (%) 2006/2005 45.5 9. other estimates based on first 8-11 months’ performance are italicised 25 .7 10.4 22.500 3.000 633.4 4. 2007a] *fiscal year April 1 to March 1 (2006/07) ** calendar year 2006 *** estimate for fiscal year 2006/07 (July.000 870.5 65.000 138.June).290 882.1 25.6 -21.201 135.132 11.2 12.7 17.102 344.000 17.8 18.167 52.0 79.065.300.362 393.324 225.6 18.489 3.7 -7.000 1.079.

563 727.792 553.Exhibit 4: Top 20 Container Ports Port 1970 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 New York/New Jersey Oakland Rotterdam Seattle Antwerp Belfast Bremen/Bremerhaven Los Angeles Melbourne Tilbury Larne Virginia Liverpool Harwich Gothenburg Philadelphia Sydney Le Havre Anchorage Felixstowe Total Share of global throughput Global Total Region ECNA WCNA N Europe WCNA N Europe N Europe N Europe WCNA Australasia N Europe N Europe ECNA N Europe N Europe Scandinavia/Baltic ECNA Australasia N Europe WCNA N Europe Traffic (TEU) 930.995 100.082 147.709 512.127 155.9% 5.175 781.025 702.707 1.947.313 724.505 620.740 215.988 562.764 663.363.6% 34.375 75.000 659. WCNA= West Coast North America 26 .731 93.419 139.256 210.900.000 1.235 Port 1980 New York/New Jersey Rotterdam Hong Kong Kaohsiung Singapore(PSA) Hamburg Oakland Seattle Kobe Antwerp Yokohama Bremen/Bremerhaven Baltimore Keelung Busan Tokyo Los Angeles Jeddah Long Beach Melbourne Total Share of global throughput Global Total Region ECNA N Europe East Asia East Asia South-east Asia N Europe WCNA WCNA North-east Asia N Europe North-east Asia N Europe ECNA East Asia North-east Asia North-east Asia WCNA Red Sea WCNA Australasia Traffic (TEU) 1.989 783.451 49.323 782.231 140.069.000 117.645 632.328 223.099 4.270 120.864 17.364 242.000 158.812 165.961 979.866 631.627 128.015 916.247 722.464.805944 [CI Magazine. 2007] ECNA= East Coast North America.985 107.000 336.309 143.269.000 194.

666 3.986 1.598.400 23.861.792. In 2006.068.000 4.521* 2006 Singapore South-East Asia Hong Kong East Asia Shanghai East Asia Shenzhen East Asia Busan North-east Asia Kaohsiung East Asia Rotterdam N Europe Dubai Middle East Hamburg N Europe Los Angeles WCNA Qingdao East Asia Long Beach WCNA Ningbo East Asia Antwerp N Europe Guangzhou East Asia Port Klang South-east Asia Tianjin East Asia New York/New Jersey ECNA Port Tanjung Pelepas South-east Asia Bremen/Bremerhaven N Europe Total Share of Global Throughput Global Total [CI Magazine.549.365 7.806 4.828.138 1. 2007] * Provisional In 1970. Scale economy.702.900.670 9. there was only one Asian port in top 20 lists. the total container traffic was 4.143 1.631 2.052 8. 27 .000 5.555.381.038.482 52.435 2.0 mTEUs.100.871.719.494.092.000 5.475 1.666.690.500 5.018.162.171.642.4% 84.030.468.197.000 9.133 Region Traffic (TEU) 24.693 1.587.710.124.090 1.923.450.637 3. more players (ports).000 208.000 6. Asia gained market share in the past 40 years and currently dominate the 2006 container throughput league.469.230.600.348.855 56.078 1. There has been a tremendous shift in the throughput.417.905 44.000 7. In 1970. Singapore alone handled 24.000 18. 12 out of 20 top ports were from Asian countries.891 1.3% 369.595.859 1.1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Port 1990 Singapore Hong Kong Rotterdam Kaohsiung Kobe Los Angeles Busan Hamburg New York/New Jersey Keelung Yokohama Long Beach Tokyo Antwerp Felixstowe San Juan Bremen/Bremerhaven Seattle Oakland Manila Total Share of Global Throughput Global Total Region South-East Asia East Asia N Europe East Asia North-east Asia WCNA North-east Asia N Europe ECNA East Asia North-east Asia WCNA North-east Asia N Europe N Europe Caribbean N Europe WCNA WCNA East Asia Traffic (TEU) Port 5.770.799 6.404 1. In 2006.000 7.465 8.113 1.545 8.000 21.968.290.647. the port of Yokohama in Japan.940 2.223.367.8 mTEUs. China alone handled more about 50% of traffic in 2006. consolidation and bigger ships were some of the factors that accounted for huge throughputs.320.123 1.775 1.853 7.774.900 12.

Exhibit 5: Container Berth and Crane Productivity Across Ports 28 .

000 35.85 0.000 1.5 92.000 Gold Container 40.000 Exsif Worldwide 1.000 55.000 Utilization (%) 95.000 Amficon Leasing 15.755. 5.000 2.000 2.000 40. 19.000 90.000 Florens Group 205.0 80.0 85. 12. 3. 15. 10.000 760.000 275.0 83.80 1.000 150.000 GESeaCo 160. 14.000 Blue Sky Intermodal 12.000 1.000 120.000 Carlisle Leasing 15.000 970.000 40.000 4.0 Per Diem Rate** (US $) 1.290.350.000 9. 9.000 120.000 145.8% Top 20 Share 1.000 520.000 Cronos Container 40.000 925.000 Bridgehead Services 12.000 405. 6.030.000 Global Lease Feet 50.35 0. 20.Exhibit 6: The Leasing Hierarchy Company 1981 CTI Flexi-Van Corp Transamerica ICS Sea Containers Itel Containers Interpool Group Xtra Inc Contrans GmbH Catu Containers Trans Ocean Leasing ICCU Containers Nippon Intl Container Textainer Group CLOU-Compass Hansetanier IEA Nippon Container Lease Ideal container X-County Leasing Shirlstar Container Total Top 20 Share Global Lease Feet Share of Total (Leased+Owned) Container Fleet [CI Magazine. 2007] 1.60 0. 2. 17.000 6.000 GVC 15. 16.0 78.50 1.290.70 [CI Magazine. 13. 4. 7.525. 2007] * Year-end **New build 20ft placed on five year term 29 .80 1.000 120.000 365.925.0% Exhibit 7: Global Lease Fleet Year 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 Fleet Size* (TEU) 5.315.000 Textainer Group 245.010.000 Waterfront Leasing 13.000 8.000 465.0 90.000 2. 11.0 87.825.000 CAI 90.000 CARU 13.000 Capital Lease 50.000 670.000 Triton Container 215. Fleet (TEU) Company 2006 360.50 1.20 1.0 85.245.9% 10.000 XINES 15.050.40 1.000 1.190. 18.000 TAL International 185.0 75.0% Share of Total (Leased+Owned) Container Fleet Fleet (TEU) 1.000 60.000 95.865.0 81.390. 8.85 1.000 UES 35.000 Total 94.000 10.000 Interpool Group 90.

700 1.000 430. its scale of operation and cost structure. the type/size of the company involved.000 805.300 1.000 460.050.000 1.850 Global production of container boxes in terms of annual output has increased by 76 times in past 40 years.000 130.000 1.500 2. 30 .Exhibit 8: Global Production Year 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 [CI Magazine.000 185.000 1.700 2.500 2.000 1.800 2.740.000 475.000 3. 2007] Annual Output (TEU) 40. and even the materials and construction techniques used.000 1.350 1.000 Annualized 20ft Price (US $) 1.700 2. The sector has changed fundamentally in terms of its geographical speed.480.150.

000 Total Indonesia Vietnam Output (TEU) 1.135.000 15.000 90.000 Other 1.000 Hyundai Precision South Korea* 25.000 50.565.000 140.000 Singamas Group China* 70.000 CIMC Group China 90.000 3.000 55.000 EHIC Group Taiwan* 17.500 Jindo Corp China (S Korea) 45.000 Hung Myung Ind South Korea 13.Exhibit 9: The Box Building Hierarchy Company Country Output Company Country (TEU) 1992 (Korean Dominance) 115.000 Maersk China (Denmark) 40.000 Hyundai Mobis China (S Korea) 45.000 EHIC (Malaysia) Malaysia 36.000 Jindo Corp South Korea* 18.050.000 585.500 Union Container Taiwan* 16.500 CXIC Group China 50.500 CIMC Group 210. 2007] *Also includes overseas production France 31 .000 165.000 Other 475.000 65.000 280.500 China Shipping China 40.000 1978 (Japanese Dominance) Tokyu Car Japan Hyundai Precision South Korea Officine Franchin Italy Nippon Fruehauf Japan Nippon Strick Japan Ste Trailor France Morteo Soprefin Italy Nippon Japan Trailmobile Alna Koki Co Japan Fruehauf France Other Total [CI Magazine.500 PT Aspex Kumbong 35.000 Bangkok Cont Ind Thailand 15.500 Hyosung Metal South Korea* 17.000 Total Taiwan* China Output Company Country (TEU) 2006 (Chinese Dominance) 230.500 AIC Group 11.000 40.000 Signgamas Group China 16.000 Hung Dao Container 452.

including CSX World Terminals in 2005 and P&O Ports in 2006.1 194.8 62.1% of total container handling activity.4 7. 32 . 4.8 20.1 55.7 18. global stevedores really did not exist. Until 1990.8 229.1% 2005 (mTEU) 51. PSA and APM terminals.2 40.1 42.5 51.0 35.0 26.0 24.1 32.0% Change (%) 9.3 25. HPH through a mix of organic growth and acquisitions and DP World by buying several of its rivals. Hutchison Port Holdings PSA International APM Terminals* DP World Cosco Pacific Total Share of Global Throughput [CI Magazine. 5. 2. with only Hutchison Port Holdings having sizable operations outside of its Hong Kong base which was in China. up from 55.Exhibit 10: Leading Container Terminal Operating Companies 2006 (mTEU) 56.1% 1. 3. mainly through securing operating concessions.5 17.3 47. All of the terminal operating companies have grown very strongly over the past five years.0% in 2005.8 41. 2007] *CI Estimate The top operators control 62.

11. 13.621 Mitsui OSK Lines 49.948 Hyundai Merchant Marine 29.018 213. Delmas. Italia Marittima.848 268. 14. 8 includes Advance Container Line The top 20 carriers accounted for 38.502 249. FAS. 4 includes Senator Lines.391 117.916 AP Mǿller-Maersk [1] 115. 3.148 Evergreen [3] 70.925.7% in 2006.772 223.8% Top 20 Share Traffic (TEU) 1.760 Hamburg Sud [7] 35. 20. 4.178 NYK [5] 49. 6 includes CSAV Norasia. 15. Out of the 20 top carriers. 5 includes TSK.012 937.9% of the total fleet capacity in 1990.703 CMA CGM [2] 78.505 APL 53.204 Wan Hai Lines 1. Several mergers and acquisitions took place during this period.6%.083 72. 3 includes Hatsu. 5.173. Montemar. OT Africa Line. 2 includes ANL. MacAndrews. 18. 33 .817 CSAV [6] 44.367 Mediterranean Shipping Co 94. 16.319 313. 8. holding a fleet capacity share of 46. 2.840 385. 6. [CI Magazine.294 Zim Integrated Shipping Services 32.885 241. 7.916 K Line 40.600.145 597. 17.677 539. 9. 19. 12.307 323.049 284. 7 includes Alianca.545 328.117 China Shipping Container Lines 55.338 Hapag-Lloyd 66.462 Hanjin Shipping [4] 54. Ybarra.413 Total 38.368 339.7% 1.850 141.767 7. 13 were from Asia in 2006. 2007] 1 includes Portlink and Safmarine.335 Yangming 36.Exhibit 11: Top 20 Ocean Carriers Carrier 1990 Evergreen Sea-Land Service Maersk NYK Mitsui OSK Lines APL OOCL K Line Cosco Shanghai Hapag-Lloyd Hanjin Shipping P & O Containers Yangming Zim Israel Navigation Nedlloyd Lines Baltic Shipping Co Neptune Orient Lines ScanDutch CGM Delmas Vieljeus Total Top 20 Share Traffic (TEU) Carrier 2006 130.368 OOCL 46. 10. which increased to 72.040 Pacific International Lines [8] 31.380 Cosco 58. Libra.795 153.192 217.801 448.