India is suffering growing pains as global demand for its agricultural and manufacturing goods is greater than its transportation infrastructure can handle, according to the Shipping Gazette.
This is most evident in the country’s ports network. About 90% of India’s international trade by volume moves by sea, but ports are unable to keep up with demand.
For the fiscal year ending March 2011, Nhava Sheva, the country’s largest port, handled 4.27 million TEU, up 5% over the previous year, while Chennai, the second largest port, handled 1.52 million TEU, up 25% over the previous year.
According to the report, capacity is an issue. Morever, strikes and ongoing port construction result in massive delays and contribute to unreliability. This causes ocean carriers to divert cargo to private ports and in some cases to other countries, such as Sri Lanka, from where cargo is transshipped to India.
APL, Hapag-Lloyd and CMA CGM have imposed congestion surcharges and have diverted services as a result of delays at Indian ports, particularly at Nhava Sheva and Chennai, which combined handle almost 70% the country’s total ocean cargo.
Average turnaround time for ships at Indian ports is at least 4.4 days compared to less than a half day in Singapore and Hong Kong.
As part of its ambitious goal of tripling exports by 2017, India’s government announced it will seek private funds to build seven new ports.
Combined, the seven ports will cost about INR350 billion (US$7.6 billion) and are part of the government’s overall plan to spend about $1 trillion to upgrade the country’s infrastructure by 2017.
Dredging deeper harbours and building additional ports along the eastern side of the country to increase trade with Asia will be included in the government plan. Source: Shipping Gazette