Page 1 Container Update - July 2021 J. M. Baxi & Company MONTHLY REPORT CONTAINER JULY 2021 Page 2 Container Update - July 2021 J. M. Baxi & Company Table Of ContENT PORT ANALYSIS KEY HIGHLIGHTS Ports hit as cargo grOWTh declines 04 Mundra port builds on Indian container marKet sharE 06 lead Adani allays concerns oVer Vizhinjam transhipment 08 Terminal afTer winning Colombo deal POSt-pandemic spurt in global trade leading tO 09 CONTainer shorTagE JNPT’S CONTainer cargo traffic rises 52.78% IN JUNE 10 Disclaimer: The information contained in this market update is drawn from wide range of newspapers, business and trade magazines, government, company and industry association websites. While all possible care is taken to verify the correctness and authenticity of information contained in this compilation, no claim to independent authorship of articles is implied or intended. Readers are expected to make their own independent evaluation and verification of information for their use. While all information contained in this report are believed to be correct, the editors of this compilation or J. M. Baxi & Co. do not guarantee the quotes or other data and the same is provided only in good faith. Page 3 Container Update - July 2021 J. M. Baxi & Company PORT ANALYSIS Container Throughput (in TEUS) TERMINAL Jun-21 May-21 Adani CMA Mundra Terminal (ACMTPL) 89477 103229 Adani Ennore Container Terminal (AECTPL) 42645 37906 Adani Hazira Container Terminal(AHCT) 51383 63935 Adani International Container Terminal (AICTPL) 214423 244145 Adani Kattupalli Port Private Limited (AKPPL) 34791 35219 Adani Mundra Container Terminal (AMCT) 77622 75220 APM Terminal Mumbai (APMT) (GTI) 145617 160113 Bharat Mumbai Container Terminal(BMCTPL) 74940 85807 Chennai Container Terminal (CCTL) 61927 61284 Chennai International Terminals Pvt Ltd (CITPL) 76896 70983 Dakshin Bharat Gateway Terminal (DBGT) 52742 47797 Haldia 18733 14705 International Container Transshipment Terminal, Kochi (ICTT) 49421 53981 JNPT 42238 40162 KAKINADA CONTAINER TERMINAL (KCTPL) 637 414 KANDLA 36139 44394 Bharat Kolkata Container Terminals Private Limited (BKCT) 48884 45528 NCT - Krishnapatnam (AKPCT) 29038 25087 Mumbai International Cargo Terminal(MICT) 102772 105164 Nhava Sheva International Container Terminal (NSICT) 81467 72405 Nhava Sheva India Gateway Terminal (NSIGT) 97452 95900 PIPAVAV 55814 33800 Tuticorin Container Terminal(TCT) 11707 14911 Visakha Container Terminal Pvt. Ltd. (VCTPL) 44202 44883 Paradip 808 603 T2 28012 28,011 Page 4 Container Update - July 2021 J. M. Baxi & Company PORTS HIT AS Oversupply of capacity and intensified CARGO GROWTH inter-port competition are putting DECLINES pressure on the industry Slowing cargo growth and lower capacity utilisation have intensified inter-port competition, putting pressure on pricing, say port operators and industry experts. In FY21, the total consolidated cargo handled by Indian ports was around 1,247 million tonnes (mt), a decline of 5.4 per cent from FY20. Energy-related commodities especially thermal coal, crude and petroleum products witnessed the highest decline in volumes. The cargo handled by the Centre-owned major ports declined 4.6 per cent to 673 mt from 705 mt in FY20, according to the Indian Ports Association (IPA), a body representing the major ports. The overseas cargo handled at major ports decreased by 2.6 per cent in FY21 to 524 mt from 539 mt in FY20. Coastal cargo handled at the major ports in FY21 decreased by 11.4 per cent to 148 mt from 167 mt during FY20. Non-major ports (those owned by the States and given to private firms) handled 575 mt in FY21, a contraction of 6.2 per cent over FY20 volumes of 614 mt, according to the Ministry of Ports, Shipping and Waterways. The overseas cargo handled at non-major ports during FY21 decreased by 4.3 per cent to 500 mt from 523 mt in FY20. The coastal cargo handled at non-major ports during FY21 decreased by 17.3 per cent to 75 mt from 91 mt in FY20. Bucking the trend of many years, major ports gained a market share of 0.4 per cent in FY21. The major ports have a capacity of 1,534 mt while that of non-major ports is 910 mt. At the FY21 cargo levels, the capacity utilisation of major ports was about 44 per cent while that at non-major ports was around 63 per cent. “FY21 resulted in almost 5% ports volume reduction at a pan-India level, which resulted in lower ports capacity utilisation across the sector. Lower capacity utilisation increased inter-port competition for cargo and (put) pressure on pricing,” Adani Ports and Special Economic Zone Ltd (APSEZ) said in its annual report for FY21. The firm’s network of ports handled 247.28 mt of cargo in FY21 compared to a capacity of 480 mt with a utilisation of 51.5 per cent. “Increased competition could affect growth and margins,” it said. Port industry executives said that erratic demand patterns could hurt port utilisation and revenue predictability. “In sync with the overall weak growth in EXIM trade, the port volumes in India have not seen a robust growth. Page 5 Container Update - July 2021 J. M. Baxi & Company Despite the good potential to bolster cargo volumes, Indian ports have not seen remarkable growth in recent years,” said an industry consultant. Through initiatives such as the ‘Sagarmala’ programme and investment in private ports, the country has already built adequate port cargo handling capacity. “In the recent past, the growth in Indian port volumes has remained subdued, where cargo volumes have not matched capacity additions,” he added. The oversupply of capacity has translated into a substantial regional over-capacity, which has emerged as one of the key concerns for the port industry. “The resulting inter-port competitions have become challenging, leading port operators to rethink business strategies. For example, over capacities in container terminals at the Chennai port cluster (ports of Chennai, Kattupalli, Ennore and Krishnapatnam) could result in stiff competition for common hinterland container cargo,” APSEZ, India’s biggest private port operator, said. Port infrastructure aside, there are challenges on the commodity front also as the government harps on local production of thermal coal and fertilisers, particularly urea, reducing the demand for importing these commodities. Agri commodities could also face a downside. “Inter-port competition with similar physical performance parameters could mean more bargaining powers to customers,” APSEZ added. Source: The Hindu Business Line Page 6 Container Update - July 2021 J. M. Baxi & Company MUNDRA PORT BUILDS ON INDIAN Mundra saw 215 vessel calls last month, significantly higher than the 163 calls CONTAINER MARKET hosted by public competitor Jawaharlal SHARE LEAD Nehru Port Trust. Container throughput at Mundra’s — India’s largest nongovernment harbor — during April and May, the first two months of the 2021-22 fiscal year, shot up 77.5 percent to 1.1 million TEU from a year earlier, continuing its steady sequential growth since the second half of fiscal 2020-21. The analysis of the latest port data collected by JOC.com for Mundra provides a barometer of how market patterns are rapidly shaping up rather than the pace of rebound in overall cargo volumes after taking a nosedive during the harsh countrywide end-March 2020 COVID-19 lockdown. The review also found that Mundra saw 215 vessel calls last month, significantly higher than the 163 calls hosted by public competitor Jawaharlal Nehru Port Trust (JNPT). As a result, the private heavyweight is poised to widen its lead over JNPT, which it outpaced last fiscal year to become India’s busiest container hub. Combined fiscal 2020-21 volume at Mundra stood at 5.65 million TEU, versus 4.7 million TEU at JNPT, JOC data show. MundrA — the Adani Group’s flagship port investment out of its 13 countrywide locations at present — sports five container terminals, including two facilities operated in partnership with the terminal arms of Mediterranean Shipping Co. (MSC) and CMA CGM. A close examination of the collected data reveals that transshipment cargo activity from MSC and CMA CGM remains a key contributor to Mundra’s impressive growth. To illustrate this “reach beyond the gateway market,” transshipment movement during fiscal 2020- 21 accounted for 1.4 million TEU, or 25 percent of the total 5.65 million TEU shipped in and out of the port. Anecdotally, Mundra’s cargo gains largely come at the expense of JNPT as both target the same northern hinterland corridor for growth. The former’s growing market dominance — which will likely further consolidate with imminent rail advantages from the dedicated freight corridor opening in stages — presents Page 7 Container Update - July 2021 J. M. Baxi & Company new challenges for JNPT to fill the capacity already in place and expected to come from Phase II development of the PSA terminal project, designed to provide a total capacity of 4.8 million TEU annually. Sunil Vaswani, executive director of the Container Shipping Lines Association (India), also noted a bullish outlook for Mundra in the months ahead amid heightened sourcing trends from the US and Europe. “With North India being the strongest cargo origin in the country, cargo volumes from the gateway port of Mundra will naturally continue to remain strong,” Vaswani told JOC.com. “With the Christmas shipments beginning in July, this situation is expected to continue to remain strong till the end of this year.” JNPT sees opporTUNITIES At the same time, terminal operators at JNPT are expanding containerized rail and looking for opportunities to capture east coast cargo usually transshipped over Sri Lanka’s Colombo port. This month’s launch of a reefer rail offering from PSA Mumbai to the Whitefield Terminal in Bengaluru reflects that strategy. With better numbers during April-May, JNPT remains upbeat about its ability to ward off growing competitive pressure.