Falling traffic may dent JNPT’s revenues
India's largest container terminal, Jawaharlal Nehru Port, is likely to face challenges as container traffic has fallen 22% during the past two months due to the global slowdown.
By Sumantra Das, ET Bureau |
MUMBAI: India's largest container terminal, Jawaharlal Nehru Port, is likely to face challenges as container traffic has fallen 22% during the past two months due to the global slowdown. According to industry estimates, the slowing of trade would lead to an almost 10-12% drop in the port���s revenues. Last year, its revenues stood at Rs 800 crore.
Major container lines have pulled out their services, and those who have stayed are handling lower volumes. It is learnt that of the over 40 container liners operating from India, four major liners ��� Zim Integrated Shipping Services, MISC (Berhad), Hanjin Shipping Co and United Arab Shipping Co ��� have already withdrawn their services. Other liners have reduced their cargo volumes in Indian ports by almost 6%, said a Mumbai-based brokerage house. Almost 80% of
JNPT���s total revenue comes from container business.
Moreover, the withdrawal of the Sina service, the second largest container shipping service from India to the US east coast, has also put more pressure on ports revenues. The Sina service is run by Hanjin Shipping Co, K-Line (Kawasaki Kisen Kaisha), Yang Ming Marine Transport Corp and Arab Shipping Co. The US east coast accounts for about 75% of India���s exports.
���Against the backdrop of a falling global trade, the containerised cargo in India is declining and that will put pressure on revenue earnings of all container ports in the country,��� says a senior industry executive. Besides, container liners are losing money in operating ships due to record low freight rates.
However, a senior official of JNPT said: ���Although there is a concern over lower container traffic growth, I feel the situation will not affect revenue earnings of the port, as liquid cargo tonnage and other bulk tonnage will work as substitutes.���
Moreover, it is also expected that other liners may reduce vessel sizes to sustain business. Containerised cargo for January 2009 has fallen 26% compared to last year.
Major container lines have pulled out their services, and those who have stayed are handling lower volumes. It is learnt that of the over 40 container liners operating from India, four major liners ��� Zim Integrated Shipping Services, MISC (Berhad), Hanjin Shipping Co and United Arab Shipping Co ��� have already withdrawn their services. Other liners have reduced their cargo volumes in Indian ports by almost 6%, said a Mumbai-based brokerage house. Almost 80% of
JNPT���s total revenue comes from container business.
Moreover, the withdrawal of the Sina service, the second largest container shipping service from India to the US east coast, has also put more pressure on ports revenues. The Sina service is run by Hanjin Shipping Co, K-Line (Kawasaki Kisen Kaisha), Yang Ming Marine Transport Corp and Arab Shipping Co. The US east coast accounts for about 75% of India���s exports.
���Against the backdrop of a falling global trade, the containerised cargo in India is declining and that will put pressure on revenue earnings of all container ports in the country,��� says a senior industry executive. Besides, container liners are losing money in operating ships due to record low freight rates.
However, a senior official of JNPT said: ���Although there is a concern over lower container traffic growth, I feel the situation will not affect revenue earnings of the port, as liquid cargo tonnage and other bulk tonnage will work as substitutes.���
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Mumbai Port, too, has seen a fall in container cargo, by almost 32%, to 6,626 TEUs (20-foot equivalent units) from 10,842 TEUs. ���Container liner have started shutting services to the US and Europe as poor cargo volumes and falling freight rates have taken their toll,��� said Deepak Tewari, chairman of the Container Shipping Lines Association (India). Moreover, it is also expected that other liners may reduce vessel sizes to sustain business. Containerised cargo for January 2009 has fallen 26% compared to last year.
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