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September 30, 2023

Shippers re-route cargo overland from southern India to Nhava Sheva

With the use of end-to-end logistics carrier agreements, southern India shippers, who are often restricted to transhipment choices through Sri Lanka’s Colombo Port, are progressively rerouting goods via terminals at Nhava Sheva/JNPT.

The most recent initiative saw the start of a blocktrain service, billed as the first rail connection on the line, connecting PSA Mumbai and DP World Cochin (Vallarpadam).

According to PSA Mumbai, “This first train movement benefits the trade by lowering logistical costs and improving supply chain efficiency.”

The project was spearheaded by the port-centric logistics division of the Singaporean corporation, PSA Cargo Solutions, and intermodal logistics service provider Container Corporation of India (Concor).

According to industry sources in Nhava Sheva, the train service, which was reserved by a single shipper to transport 40-foot import boxes of newsprint cargo on the inaugural trip, would complete the journey from Nhava Sheva to Cochin in two and a half days as opposed to an average three and a half by truck.

The cargo apparently arrived under Nhava Sheva’s direct port delivery window, a quick-clearance customs mode, on one of Atlantic Ro-Ro Carriers’ (ARRC) regular liner runs to PSA Mumbai.

Additionally, according to sources, the terminal received trade requests for comparable last-mile solutions for smaller northern ICDs and other southern interior areas, such as Bangalore and Hyderabad. A private rail operator recently agreed to provide PSA with two dedicated freight trains for round-trip service between Nhava Sheva and ICD Faridabad.

Industry watchers claim that the landside push—caused by the lack of coastline connectivity between Nhava Sheva and Cochin—would promote the switch from driving to riding trains, which is essential for the government’s goals of lower logistics costs and more environmentally friendly transportation.

About 300 nautical miles from Colombo, the Vallarpadam Terminal was primarily built to reclaim Indian exports and imports that had been forwarded through foreign hub ports, primarily Colombo. However, the Indian terminal has struggled to attract enough direct mainline sailings required to handle all trades due to expensive port-call rates and cargo issues at the entrance.

The Cochin port administration proposed ad hoc tariff reductions of up to 85% on typical vessel-related charges for mainline calls on larger trades last year to sweeten the deal.

However, it appears that so far, no quantifiable benefits have resulted from that incentive. Data available indicates that Vallarpadam saw 66,000 transhipment loads from April to September, compared to 72,000 teu a year earlier; some small gains from the Colombo interruption may have contributed to this decline.

In the meantime, Mumbai-based JM Baxi, which had previously won a contract to modernise and run the port’s own terminal, JNPCT, has strengthened its position on the port’s shoreline by winning a second concession to run the shallow and coastal berths, which were also put up for tender as part of the government’s initiative to monetize stressed public port assets.

“The USP of this multipurpose clean cargo terminal is the ability to connect coastal containers through ro-ro operators, revolutionising the water-based logistics eco-system of Nhava Sheva and making it the most connected hub in the country,” JM Baxi said. “This opens up massive last-mile solutions and broadens access to the hinterland.”

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