VCTPL combats slowdown, may post Decent Growth
Visakhapatnam: The global economic slowdown and geo-political disturbances such as the one in oil-rich Ukrainne have stunted container traffic growth in India.
In tune with this, the Visakha Container Terminal is likely to close the fiscal with a single digit growth number. Considering the average box traffic growth in India and other container terminals, VCPTL’s growth could stand out.
Says Mr Sushil Mulchandani, CEO of VCTPL: “One of the factors that have been crucial to this growth has been the thriving exports of sea foods from the state of Andhra Pradesh.”
Indeed, VCT has emerged as a leading terminal for marine products export, especially shrimps. This is evident from the ballooning shrimp exports in particular the ‘Vannnamei’ specie (SEE ViS Issue March 1-15, 2014).
This in effect is giving a significant fillip to container movement from Vizag. Most of this sea food is exported to America followed by Europe.
Reefer boxes i.e. refrigerated containers used for the transportation of marine products—on average sees volumes of 500-550 FEU’s or 1000-1100 teus a month. An overwhelming percentage of these reefer containers are used for sea food exports while a minuscule percent for Pharma exports.
“Vizag’s share of sea food export was 23 percent in terms of value and 22 percent in terms of dollar realization. About 51 per cent of frozen shrimp exported from India was routed through vizag, which has become the gateway for these exports” Mr Sushil told VIS News Service.
Apart from seafood, ferro alloys and the alluminium industries are also increasingly using containers for their ex-im needs.
Mr Sushil points out that the aluminium industries route a major portion of their box traffic via Vizag.
Some of the other cargoes moved in containers through Vizag include import of chemicals, refractories, machinery, project cargo, food stuff, pharmaceuticals, cotton goods including garments and exports of metals, metal alloys & product heavy minerals.
VCTPL which celebrated 10 years in operations last year has grown significantly during those years— from a mere 1400 teus/month to about 20-25K Teus/month.
Having said that it would be imprudent for VCT to rest on its past laurels as the container terminal has some fierce completion down under.
Container terminals at Chennai and Krishnapatnam are giving a tough run for VCTPL.
Though Chennai has always been in the big league with container volumes of a million plus, the recently commissioned container terminal at krishnapatnam is also giving them a stiff fight for their money.
“VCTPL has lost out to huge rice export to its competition from Krishnapatnam. Nearly 1 rake i.e. 1680 tonnes (60 wagons x 28 tonnes/container) would come to Vizag every week which since August last year is being exported through Krishnapatnam,” a freight forwarder said on condition of anonimity.
Other agri based commodities such as chilli, turmeric and some spices are also said to be exported from other terminals. Tobacco which has bulk volume in exports has too reduced its dependence on VCTPL.
‘Custom clearance is a lot slower here than it is in the two ports down south,” says another prominent CHA. “Local custom officials are following the same rule book but I fail to understand why it takes such a while to get our goods cleared here’, he adds.
THC (terminal handling charge) is another issue as the handling charges are higher in Vizag than at some of the other south based terminals.
‘When THC is lower and boxes are available freely why would someone go elsewhere’ he says.
Container availability, lack of frequent main line vessels calling at Vizag, custom delays are some of the issues that the people from the trade cite for the decline in volumes.
Neighbouring hinterland is where the answer might lie for the container terminal in order to attract additional container traffic.
The management has carried out various trade meets in cities like Nagpur, Raipur and Bhubneshwar showcasing the terminals infrastructure, capabilities and its proximity to their respective locations.
To be fair the terminal at Vizag has limitations of its own as it doesn’t own the port plus neither has a CFS. Krishnapatnam which is privately owned has a CFS within the port itself thus saving cost and time for the shipper. The terminal operator is however looking beyond. VCT was invited by the Nepal trade to attend meets at Khatmandu and Brijung organized by Nepal-India Chamber of Commerce and Embassy of India. “Nepal recognizes the potential of VCT to become their alternate gateway especially since railbound connectivity which constitutes 60 per cent of their traffic was possible through Visakhapatnam,” says the CEO of VCT.
Well this might just be the next big thing VCTPL is looking for.