The Asian and Global Scenario**

World trade has shown a relentless spiral upwards ,especially in the new economy .In 2002 the world seaborne trade stood at 5.9 Billion tonne of goods loaded worth nearly 6 Trillion US$ .The total value of World merchandise export was 7.3 Trillion US$ in 2003(World trade Report 2004) ..
The cargo volume is estimated to be increasing at 3.7% and containerization at 7%.(source :World watch Institute). 90% of World cargo is now containerized.
The three major Asian trades are :
Asia – North America
Asia – Europe
Intra Asia

Asia-North America trade is expected to grow at the rate of 5.1% per annum over the next decade for the West bound trade while the growth rate for the East bound trade is expected to grow at 5.7% per annum .In the Asia-Europe trade East bound and West bound trade is expected to grow at the rate of 7.7% per annum upto 2011.As far as Intra-Asia trade is concerned the ESCAP study have found that the rate of growth will be at 7.6% per annum upto 2011.
Asian countries are significant world players in many sectors of maritime transport .They account for about half of the crews,two thirds of global port operators 83% of container ship building and 99% of demolition .28 of worlds largest liner shipping companies are based in Asia.
Containerised trade of South and East Asian countries is forecated to expand at an annula rate of 11% from 2005 fuelled by the strong Intra-Asian trade ,as well as Chinese exports to North America and Europe.Container Transshipment through existing and also new Hub ports in Asia has continued to expand.In 2004 the worlds six largest container ports and 20 of the worlds top 30 were located in Asia.
According to Korea Maritime Institute the Chinese container traffic will increase to 130 million TEUs by 2011 and in all probability Shanghai will emerge as the largest port in the world.
According to ESCAP study the total volume of containers transshipped within the ESCAP region will increase from the present 47 million TEUs to 64 million TEUs by 2011 and the share of transshipment in total port volume will increase to 30% in 2011.This study has also found that there is scope for 9 global scale transshipment ports to come up in ESCAP region – each handling in excess of 3 million TEU of transshipment each year.
Eurogate terminal ,Germany estimates that future will see 10 deepwater ports ,three of which will be located in Asia and one in middle-east .
At Asian end ,following ports are seriously planning for this size

.1.Singapore 2.Hongkong 3. ? Can it be Vizhinjam .

Where do Indian Container Ports get placed in comparison with the top thirty Container Ports in 2004? The only Indian container port namely the JN Port in New Mumbai which appeared at the 30th position in 2003 does not figure in top thirty container ports in 2004 despite handling 2.36 million TEUs registering a growth of 8.62% over 2003.

It has, however, managed to get placed at the 31st position ahead of Salalah in Oman (2.28 million TEUs) and Colombo in Sri Lanka (2.22 million TEUs). Honkong and Singapore have maintained the world’s No: 1 and No: 2 positions by handling 21.93 million TEUs and 20.60 million TEUs registering a growth of 7.3% and 13.8% respectively.

The Chinese ports of Shanghai and Shenzhen come to the 3rd and 4th positions by handling 14.5 million and 13.65 million TEUs respectively by registering a growth of 29%. Bussan in South Korea and Kaochsiung in Taiwan maintained the 5th and 6th positions by handling 11.4 million and 9.7 million TEUs respectively. Rotterdam in Netherlands, Los Angeles in the US and Hamburg in Germany occupied the 7th, 8th and 9th positions respectively.

Dubai Ports Authority moved up to the 10th position displacing Antwerp in Belgium with an impressive 24.8% rise to 6.42 million TEUs (Source: Containerization International, London). The performance figures of the top ten container ports reveal that the top six container ports are from the Asian region. The eight Chinese ports among the top 30 container ports together handled about 70 million TEUs-about 35% of 196 million TEUs handled by all the top 30 container ports. According to the Korea Maritime Institute Chinese container traffic will increase to 130 million TEUs by 2011 and in all probability Shanghai will emerge as the world’s largest container port by 2011.

An analysis of the modern trends in containerization in India reveals that the annual average rate of growth of containerization for the whole period from 1990-1999 was 13.7%. In the first five years from 2000-2004 the growth rate worked out to 13.91%. India’s container traffic which was 3.90 million TEUs in 2003-2004 is likely to rise to 4.5 million TEUs in 2004-2005 including the traffic handled in Mundra and Pipavav ports which represent an increase of about 15.38%.

The Japan International Consulting Agency (JICA) has assumed a growth rate of 16% and estimated that India’s box traffic would reach 10 million TEUs by 2010 with the western region accounting for 70% of the container traffic. Since a 7 to 8% growth in India’s GDP is now considered achievable for the next ten years a 14% growth in container traffic annually could be expected for the period 2005-2015. Based on such assumptions India’s container traffic will rise to 8.66 million TEUs by 2010 and 16.68 million TEUs in 2015.

Does India have enough capacity to handle the projected traffic? The current capacity available at Indian major ports for container traffic is estimated to be around 4 million TEUs. The traffic handled in the current year has already exceeded the available capacity and this was the main reason why most container terminals at Indian major ports experienced congestion. The two additional terminals to be created at the JN Port, the new off-shore terminal being planned in Mumbai, expansion of the Chennai, Tuticorin and Vishakapatnam terminals, the new terminals to come up in Kandla, Cochin etc… in the next five years can at best add another 4 million TEUs. This should suggest that by 2010 while the traffic will reach 8.66 million TEUs the capacity is likely to be only 8 million TEUs indicating a short fall. One of the conclusions of the latest port sector report 2004 of Drewry Shipping Consultants, London is that in the Asian region demand will outstrip supply within five years unless additional projects are brought to fruition. An ESCAP study on port development strategies has concluded that in order to handle the anticipated port container traffic in 2011 the south Asian region alone will require about 40 berths.

The most significant technological development in container shipping is the emergence of large-sized ships. It has two significant effects on international shipping since ship size not only determines competitive power in the shipping industry but also becomes a major criterion in determining the size of a port. Many competent and experienced analysts believed that once the container ship size reached 10,000 TEUs diseconomies of scale would start operating as two engines would be required to power such huge ships. But, with new developments in engine design, single engine vessels of 10,000 TEU and above can now be built. The Chinese shipping line COSCO has ordered on Hyundai Heavy Industries four super-post-panamax ships of 10,000 TEU-each costing about US $ 127 million to be delivered in 2008.

Recent reports suggest that A P Moller-Maersk Odense shipyard in Denmark has plans to build eight super-post-panamax ships of 13,000 TEU capacity with the new K98 engine. About 123 ships with capacity 8000 Drewry Shipping Consultants have reported that when compared to a 4,000 TEU ship a 10,000 TEU ship results in 37% operating cost savings. A recent ESCAP study has revealed that by 2011 a total of 490 very large container vessels will be in service globally out of which approximately 130 will be of 10,000 TEU and above. It has become increasingly clear now that there are no insurmountable technical barriers to the future increase in size of container ships. Concept designs already exist for ships up to 18,000 TEUs. The limits to grow, if there are any, will be market driven.

The advent of larger container ships has made large ships the key issue in port development. What are its implications? The new transhipment container terminal in Vallarpadam is designed to accommodate container ships up to 8,000 TEU capacity drawing a draught not exceeding 14.5 m. By 2010-11 when Cochin terminal becomes fully operational super-post-panamax vessels of 8,000-15,000 TEU capacity will have already begun their service on the main shipping routes thereby reducing Cochin terminal’s competitive advantage. India will need a mega container transhipment terminal in order to capture the transhipment business. For example, 15,000 TEU vessels would require special berths that would permit them to be worked from both sides. In addition, mega hubs need a depth of 18-20 m. In such a scenario, Cochin container terminal can function as a regional logistics and transhipment hub for vessels up to 8,000 TEUs and Vizhinjam, near Thiruvanathapuram could emerge holding excellent potential to be developed as a mega transhipment hub for vessels in the range of 8,000-15,000 TEUs.

But this can naturally give rise to a question-will there be enough traffic volumes to support a regional logistics and transhipment hub in Cochin and a mega transhipment hub in Vizhinjam? Can two transhipment terminals co-exist and function within a distance of about 200 Kms from each other? A recent ESCAP study has found that the total volume of containers transshipped within the ESCAP region will increase from 47 million TEUs in 2006 to 64 million TEUs by 2011 and the share of transhipment in total port volume will increase to 30% in 2011. This study has also found that there is scope for nine global scale transhipment ports to come up in the ESCAP region-each handling in excess of 3 million TEUs of transhipment traffic per year. The mega transhipment port of Tanjung Pelepas, the 16th largest in the world has handled 4 million TEUs. This port is situated only about 150 Kms from the 13th largest port namely Port Klang in Malaysia which has also handled 5.2 million TEUs. The Chinese port of Ningbo, the 17th largest in the world is situated only 200 Kms away from Shanghai. The new South Korean transhipment port of Gwangyang is situated only 170 Kms from the 5th largest port of Bussan. The scale and the volume of container transhipment traffic in the region should suggest that there is enough room for ports to co-exist and function even in close proximity.

The Malaysian transhipment port of Tanjung Pelepas which was hardly known in international shipping in the year 2000 will transform itself into the largest container port in Malaysia in 2005 weathering the increasingly tough competition with Singapore. While Tanjung Pelepas offers 19 m draught alongside Vizhinjam could offer even 20m draught. Endowed with a favourable geographical location, natural depth of water, green field site and the absence of a regulatory and bureaucratic regime Vizhinjam can present itself as an excellent site for a mega container transhipment terminal.