Vizhinjam can be ideal transhipment hub

Vizhinjam can be ideal transhipment hub

Jose Paul

This is the right time for India to create a mega container transhipment terminal, and Vizhinjam seems the best choice.

AP Moller Maersk Group based in Denmark is the largest container shipping line in the world. Its giant container ship, Emma Maersk, entered service in mid-September. This vessel, which can carry 22 rows of boxes across its decks, will be deployed on Maersk's premier Asia-Europe service and its maiden voyage will cover the main European ports before transiting the Suez Canal and then heading to Singapore, Kobe, Nagoya, Yokohama, Yantian and finally Hong Kong. The ship will not be able to call at any of the South Asian ports.
The emergence of large ships has two significant effects on international shipping since ship size not only determines the competitive power in the shipping industry but also becomes a significant criterion in determining the size of a port.
Why do ship-owners keep on increasing the size of container ships? Basically, to take advantage of the economies of scale — the higher the capacity, the lower will be the unit cost for container transportation.
World fleet
The world fleet of container ships stood at 3,708 offering 8.7 million TEU capacity as on July 1, which was 15.2 per cent higher than a year earlier. As on July 1, the global order book for new container ships stood at 1,130 offering an aggregate capacity of 4.295 million TEUs representing 49.3 per cent of the capacity. By end-2008, ships of 6,000 TEU or more will represent about 25 per cent of the global container fleet capacity.
Thus, of the 5,000 container ships that are likely to be in operation by end-2008, about 1,250 will be over 6,000 TEU.
These large ships are the key to port development in India. The largest container port in India — the Jawaharlal Nehru Port in New Mumbai, 32nd largest container port in the world — can only accommodate container ships up to 4,000 TEU with a draught of 12.5 m.
The new transhipment terminal at Vallarpadam (near Kochi), when it becomes fully operational by about 2010, is unlikely to handle container ships above 6,000 TEU, drawing a draught of more than 14.5m. This is the most opportune time for India to create a mega container transhipment terminal, not only for the sub-continent but also for South Asia to accommodate very large container ships in the range of 6,000-15,000 TEUs, as a competitor to Colombo in the South, Singapore in the east and Dubai and Salalah in the west. In this context, development of Vizhinjam port near Thiruvananthapuram assumes great significance. Vizhinjam, which offers a depth of about 20-22 m and is favourably located close to the East-West sea route, could be an excellent choice for a mega container transhipment terminal. But will there be enough traffic to support a regional logistics and transhipment hub in Kochi and a mega transhipment hub at Vizhinjam, 200 km away?
Significant impact
Development of Vizhinjam as a mega container transhipment port can have a significant impact on Colombo — the 34th largest container port in the world. Colombo handled 2.4 million TEUs in 2005, up 10.5 per cent, over the previous year. Where does the cargo come from for Colombo? About 75-80 per cent of the total cargo is supplied by the sub-continent and if a mega container terminal comes up at Vizhinjam, just 200 nautical miles and 10 hours of sailing from Colombo, the latter may lost its place as a major transhipment terminal in South Asia.
Depth can also be a problem in Colombo. With a fully-laden super-post Panamax ship requiring a draught of 16 metres, Colombo's 15 metres would be inadequate. With a natural water depth of 20 metres, Vizhinjam could make a decisive march over Colombo by relying on indigenously generated cargo in the sub-continent.
The best model for developing Vizhinjam as a mega container transhipment port is the public-private partnership route. Assigning the public sector the responsibility of creating the basic infrastructure facilities and leaving specialised berths, terminals and custom-built facilities to the private sector for investment, operation and management appears a sensible policy option.


The author, a former Acting Chairman, JN Port, New Mumbai, is a visiting professor at Manipal Academy of Higher Education. Response may be sent to http://www.thehindubusinessline.com/2006/10/16/stories/drjospaul@rediffmail.com)