The government’s decision to go ahead with four hub ports –– two each on either coast, as spelt out in the national maritime policy –– is aimed at boosting container traffic in the country. As per a recent cargo study by Crisil, India will handle around 21 million containers by 2020. Despite a boom in container handling in recent years, India doesn’t have hub ports that attract mother ships carrying 10,000-12,000 containers. These ships call at mega ports such as Hong Kong, Singapore, Colombo, Dubai and Salalah in the region, and thousands of US and Euro-pe bound Indian containers are transshipped at these hub ports. Indian exporters and importers mostly bank on international ports in the region such as Dub-ai/Salalah and Colombo for transshipping containers since it is cost-effective.

Terminals in Colombo, for instance, accrue a lion’s share of their revenues from handling Indian containers. Cheaper port/terminal charges and deeper berths help them attract mother ships that offer economies of scale to shippers. None of the ports in India are being able to offer rates comparable with international ports while inadequate draught (depth) at the berth as well as the shipping channel keeps mother vessels at bay.

India’s plan now is to develop Jawaharlal Nehru Port and Cochin Port on the west coast and Vizag and Chennai ports on the east coast as hub ports. Both JNPT and Chennai have multiple terminals already operational, but are bogged down by several bottlenecks that lead to occasional congestion at their terminals. In Chennai, shipping lines have continued to charge since August 15, 2011, up to $200 per container as congestion surcharge, clai-ming that terminals, operated by DP World and PSA, are yet to bring normalcy in ship berthing and loading/unloading of containers. Rail and road connectivity continues to be major bottleneck in Chennai. The port is in the process of bidding for a third container terminal.

Dredging of the berths and shipping channel is extremely important to create and maintain hub ports. After many years’ delay, finally the Mumbai shipping channel dredging project would be awarded in a month. For JNPT, India’s largest container port handling over 56 per cent of the country’s total container throughput, dredging of the channel is very critical as the work for its fourth container terminal that hopes to double the port capacity to more than 8 million containers in phases is already underway. The Rs 1,570-crore dredging project, once completed, will increase the draught of the channel leading to two of the country’s largest ports -- JNPT and Mumbai Port, and help them attract bigger ships. The first phase of the dredging project will see depth increase to 14 meters from the present 10 meters, and later to 17 meters, paving way for mother ships.

To facilitate hub ports, another important aspect is a long-pending relaxation in our Cabotage Laws that restrict movement of containers by foreign shipping lines from one domestic port to another. These laws have been creating a major hindrance for the only transshipment container terminal that is already operational at Kochi. The terminal at Vallarpadam in Kochi, which began operations in February, 2011, is yet to achieve projected traffic as containers that are unloa-ded at Kochi but destined for other Indian ports are to be evacuated only by ships that fly an Indian flag. However, Indian flagged feeder ships connecting Indian ports are inadequate in numbers to support free flow of imported containe-rs. A request from Cochin Port Trust for relaxing rules is pending with the government.

A quick relaxation in Cabotage Laws for container evacuation, more dredging of berths and channels, better rail/road connectivity and lower port charges are what will drive hub ports. Without these initiatives, hub ports will remain just another dream.