Shipping Ministry considering new strategic Port for Transshipment operations

  • 26-Sep-2018
  • Shipping Ministry considering new strategic Port for Transshipment operations

With India’s economy growing at a robust pace achieving 8.2 GDP growth in April-June quarter, the Shipping Ministry is considering a more-strategic port along the Bay of Bengal coast for transshipment operations.

To help achieve that objective, Indian shipping authorities have reportedly commissioned a study to determine the feasibility of transforming the Meadow Port — a deepwater harbor in the Andaman and Nicobar islands — into a transshipment point. This archipelago includes hundreds of islands and 10 main ports under the Government's Port Management Board.

Authorities argue that with a large basin area, the Meadow Port will be able to simultaneously handle four ships of any size for “ship-to-ship” transshipment operations without a major infrastructure upgrade.

Further, other locational advantages — such as the site’s deep draft and proximity to the busy East-West shipping route — favor that intended purpose.

The advantages of a mid-sea, ship-to-ship move

The plan also stems from a preliminary view that ship-to-ship transshipment handling offers considerable cost benefits, given that mid-sea operations will not involve port fees associated with berthing and mooring.

Further, with the required infrastructure already in place at the site to kick-start transshipment operations on a small scale, it is expected that stakeholders will essentially examine procedural issues — notably customs and immigration formalities for foreign-flag carriers — under the proposed feasibility exercise.

Fiscal 2017-2018 statistics obtained by JOC show cargo movement to/from the Andaman and Nicobar islands totalled 1.4 million metric tonnes (about 1.5 million tonnes), up 8 percent from 1.3 million metric tonnes in the prior year, whereas container volume (export-import and coastal) increased nearly 12 percent to 51,856 TEU, from 46,404 TEU during 2016-2017. Of that total tonnage, the Meadow Port accounted for 25,000 tonnes, according to collected data.

Transshipment trade represents freight transported between an Indian Port and an international “hub” port, when direct mainline connections are not available.

As noted, the aforementioned mid-sea cargo transfer is an alternative transshipment option and adds to a series of measures that India's authorities have implemented to reduce the share of domestic cargo relayed via foreign hub ports. Those efforts — which include a cabotage law reform enacted May 21 that allows foreign-flag carriers to transport export-import and empty containers between domestic ports — appear to be paying off, although supply chain challenges facing the emerging market economy remain formidable, including its inadequate infrastructure and related inland network inefficiencies.

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