JNPT’s cargo market share set to drop

India’s largest port and ranked 24th among the top 100 container ports globally is set to drop its market share to 25.5% in cargo handling by 2019-20, due to shift in cargo to minor ports on the West Coast of the country.

According to a report by Emkay Global Financial Services Ltd, JNPT has been losing market share from 51% in 2005-06 to 41.3% in 2010-11 due to infrastructure bottlenecks.

“Reduced market share of JNPT will benefit other minor ports, which have access to North and North Western hinterlands,” said Mr. Ajit Motwani, analyst with Emkay Global.

Moreover, JNPT, which is operating near its full evacuation capacity, has been saddled with regulatory norms with regards to calculation of tariffs hindering its growth.

The Tariff Authority of Major Ports (TAMP) has issued guidelines to Nhava Sheva Container Terminal (NSCIT) to pare rates by 27.85%. NSCIT is one of the three container terminal operators at JNPT port, which has been affected by the regulator’s order. As a result, the order has deterred operators from expanding operations or handling more containers at JNPT.

“We expect ambiguity over the guidelines to further impact JNPT as multi-port operators would prefer other destinations,” Mr. Motwani said.

It may be recalled here that DP World, which is the holding company for NSCIT, also operates container terminals at Mundra, Chennai and Vizag other than JNPT. Hence, it may consider it prudent to shift container cargo to other nearby terminals like Mundra Port. This minor port, which currently ranks second after Kandla, may achieve the numero uno status among all the Indian ports due to shift in cargo from JNPT in the next two years.

“Considering the strapped capacity utilization at JNPT, most of the volume is likely to be handled by Mundra. Mundra Port is ideally situated to service the huge hinterland of north and north western India, which account for 2/3rd of India’s overall GDP,” he added.

Further, private built-operate-transfer concessions awarded by JNPT have entered into rough weather and are stuck up in lock jam, thereby allowed the other western port to gain market share.

As and when JNPT’s long delayed container terminal IV comes up and becomes operational, cargo volume at Mundra Port will witness subdued performance, Mr. Motwani concluded.



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