Professional Documents
Culture Documents
Research Guide:
Dr. SUMAN SAURABH
Assistant Professor
D.Y. Patil University
School of Management
CBD Belapur, Navi Mumbai
December 2014
1
DECLARATION
I hereby declare that the dissertation TO STUDY AND ANALYSE
CONTINER TERMINAL OPERATIONS AT JAWAHARLAL NEHRU PORT
TRUST
(WITH
SPECIAL
REFERENCE
TO
NAVI
MUMBAI
IN
Certificate
This is to certify that the dissertation entitled TO STUDY AND ANALYSE
CONTAINER TERMINAL OPERATION IN JAWAHARLAL NEHRU PORT TRUST
(WITH SPECIAL REFERENCE TO NAVI MUMBAI IN MAHARASHTRA)is the bona
fide research work carried out by Mr. AKSHAY REDIJ student of MBA, atD.Y. Patil
Universitys School of Management during the year 2013-2015, in partial
fulfillment of the requirements for the award of the Degree of Master in Business
Management and that the dissertation has not formed the basis for the award
previously of any degree, diploma, associate ship, fellowship or any other similar
title.
(Dr. R. Gopal)
Director,
Assistant Professor
School of Management,
(Guide Name)
ACKNOWLEDGEMENTS
In the first place, I thank the D.Y. Patil University, School of Business
Management, Navi Mumbai for giving me an opportunity to work on this project. I
would also like to thank Assistant Professor Dr. Suman Saurabh , School of
Management, D.Y. Patil University, Navi Mumbai for having given me his valuable
guidance for the project. Without his help it would have been impossible for me
to complete the project.
I would also like to thank the various people from the JAWAHARLAL NEHRU
PORT TRUST who have provided me with a lot of information and in fact even
sharing some of the confidential company documents and data many of which I
have used in this report and without which this project could not have been
completed.
I would be failing in my duty if I do not acknowledge with a deep sense of
gratitude the sacrifices made by my parents and thus have helped me in
completing the project work successfully.
INDEX
Sr No
Title
Pg No
A
B
C
1
2
3
4
5
6
7
8
9
List of Tables
List of Figures
List of Graphs
Executive Summary
Introduction
Literature Review
Aims and Objectives
Research Methodology
Questionnaire
Analysis
Conclusion
Recommendations
7
7
7
10
12
16
20
44
56
58
118
123
Title
Page No.
1.
93
2.
97-110
3.
112-115
FIGURE
Table No:
Title
Page No.
Identification of goals
84
77
89
GRAPHS
Table No:
Title
Page No.
104
105-107
ABBREVIATIONS
BOOT Build Own Operate & Transfer
BOT Build Operate Transfer
CAGR Compounded Average Growth Rate
CFS Container Freight Station
CHA Custom House Agent
CII Confederation of Indian Industry
CONCOR Container Corporation of India
DWT Dead Weight Tonnage
EDI Electronic Data Interchange
FEU Forty feet Equivalent Unit
GAPL Gujarat Pipavav Port Limited
GDP Gross Domestic Product
GMB Gujarat Maritime Board
GPS Global Positioning System
GRT Gross Registered Tonnage
GTIPL Gateway Terminals India Private Limited
ICD Inland Container Depot
ICT Information and Communication Technology
IPA Indian Port Association
IPMS Integrated Port Management System
JNPT Jawaharlal Nehru Port Trust
KPT Kandla Port Trust
CHAPTER 1
EXECUTIVE SUMMARY
10
EXECUTIVE SUMMARY
The real growth that Indian GDP has is reflected in its international trade and
consequently in the traffic growth that ports have been witnessing over the past few
years. This trend in growth is expected to continue, with international trade expected to
grow at a rate even higher than at present. The ability of Indian port infrastructure to
meet these increasing demands will be critical to the growth of the economy. In this
context, it has been recognized that a national plan needs to be developed which
wouldidentify in a structured manner, the required investments in port and related
infrastructure, while at the same time reducing dependence on government funds. In
order to meet this objective, the planning commission and the ministry of shipping, road
transport and highways has initiated this business planning exercise for major ports.
11
CHAPTER 2
INTRODUCTON OF JNPT
12
Introduction of JNPT
Indias increasing international trade necessitated the development of additional
facilities to decongest the traffic at the Mumbai Port. The need of an alternative port in
the region to handle the increasing traffic led to the development of JNPT in 1989. With
its vast back up area JNPT was believed to have a strong potential for the development
of additional facilities as per demand and was ideally suited for future maritime
requirements.
JNPT Profile
The Jawaharlal Nehru port at Navi Mumbai (JNPT) was established on 26 May 1989. It
was dedicated to the nation by former prime minister of India . Late Shri Rajiv Gandhi.
The port became operational that day. The main purpose for developing JNPT as a
satellite port for Mumbai port to reduce the traffic . With the time it was hard to handle
the traffic of MBPT. With the time it was hard to handle the traffic of MBPT. JNPT was
constructed in a record time of just 3.5 year with a cost of round Rs 1000 crores , it is
only Indian port built to international standard with modern working norms .Because of
its high level of automation and computerized functioning it was envised , as the hitech
port of the 21st century .certified an ISO 9000:2001 port , it was initial planned to be a
satellite port to the Mumbai port with the purpose to decongest the traffic at latter. Today
the JNPT port has already established itself as the major port catalyst for the trade
and commerce of the country.
With its strong commitment to provide seamless service to its customers as Indias
prime facilitator of the International trade.JNP strives to be undisputed in the south
Asian region in year to come .
Gateway terminal India Private Ltd. (GTI) is a joint venture company of A.P Moller and
container corporation of india ltd.(CONCAR). GTI came in to existence in year 2006 and
has signed license agreement with Jawaharlal Nehru Port Trust(JNPT) to build and
operate for the next 30 years . In the short span of time GTI has recorded record break
13
14
Port Highlights
Ranks 31st among the top 100 Container Ports in the world
Equipped with the latest Vessel Traffic Management System (VTMS) to track
/monitorvessel movements ensuring safe navigation
JNPT has an important place amongst Indian ports due to the kind of traffic that it
serves as well as being a pioneer in involving large-scale private sector
participation. It is also one of the first ports to initiate this exercise.
A seaport is the compulsory transit point for the bulk of this trade, permitting the
import of goods, which the country does not itself produce in sufficient quantity
15
and the export of items which the country has a surplus or has a competitive
edge to produce contributing to the development of its economy. Besides, a port
is also a place for the provision of further services, which add value to the
products transported and thus helps the increasing demand of trade.
To cope with the ever growing world trade, ports of every country will no doubt
continue to play a critical and important role in providing the cheapest mode of
transportation.
Relationship
between
macroeconomics,
port
economics
and
port
performance
Port performance and port economics are closely related with macroeconomics
hence, any changes in port traffic or operation and port / port organization has an
impact on national economy particularly on the hinterland.
Indian seaports are today more than just government owned public utilities; they
are indeed, focal points of convergence for several contending and competing
business interests from shipping lines, port authorities, and individual terminal
operators to freight forwarders and inland logistics agencies; not to leave out the
shippers (the exporter-importer fraternity) whose cargo is what is being ultimately
being transported. They represent what may rightly be considered a complex
mosaic of contractual and business relationships, which in turn give rise to maze
of regulatory and operating institutions and procedures and ever-changing rules
of dynamic inter-play.
16
Under the impact of first-generation port reforms, initiated since the mid-nineties,
following economic liberalisation and globalisation policies, the entire gamut of
existing institutional arrangements and underlying transactional and business
processes in the port sector have been undergoing a profound transformation.
The critical changes underway in the port sector have many facets that need to
be brought under a comprehensive review and research scrutiny from
contemporary perspective. Few attempts made in the past have merely focused
on the historical and social aspects of Indian port sector, without examining the
underlying business and economic processes that make port inalienable part of a
larger national and international economy.
Not too surprisingly, there are hardly any significant books or research
monographs that portray a contemporary emerging picture of the Indian port
sector, as the gateways to global trade. This leaves a large gap to be filled and
17
considering that Indian port projects are now increasingly becoming key
destinations for strategic business investments and are increasingly becoming
key links in the rapidly expanding global trade, understanding of the working of
the port sector becomes an urgent and critical task both from the public policy
angle and strategic business decisions.
This has given rise to many new dimensions in the development of the port
sector in the country. Containerisation of cargo has brought about a significant
redefinition of port services and demands for highly sophisticated handling
equipment and logistics service efficiencies.
The shift away from commodity nature of Indias export trade is particularly,
noticeable in the marked shift towards increasing value added exports and drive
for global competitiveness.The shift in the pattern of trading is however, yet to
find adequate support in terms of a maritime infrastructure.
Interestingly, in the past ten years while overall cargo growth (reckoned at about
9-10 per cent) has been quite impressive, new demands have been generated
on the port sector for adding on more cargo handling capacity and creation of
new-dedicated berths and cargo terminals.
18
Consequently, the port sector is going with considerable business optimism with
respect to generation of increasing cargo traffic volumes and of trade in general
in the coming years. Considerable future business potential is also seen with
respect to generating enhanced earnings from port sector operations through
improving efficiencies and other value-added activities contributing also thereby
to making countrys external trade competitive in the global market.
Last
Updated:
Wednesday,
July
9,
2014,
19:24
New Delhi: India has the second fastest growing services sector in the world with
a compound annual growth rate at 9 percent, just below China's 10.9 percent,
during
2001
to
2012,
the
Economic
Survey
said
Wednesday.
Among the world's top 15 countries in terms of GDP, India ranked 10th in terms
of overall GDP and 12th in terms of services GDP in 2012, it said.
"India has the second fastest growing services sector with CAGR at 9 percent,
just below China?s 10.9 percent, during the last 11-year period from 2001 to
2012,"
the
survey
said.
It said that services share in world GDP was 65.9 percent but its share in
employment
was
only
44
percent
in
2012.
In India, the services sector had a high share in income at 56.9 percent in 2012
with
lower
share
of
28.1
percent
in
employment,
it
added.
In 2013-14 the growth rate of the services sector at 6.8 percent is marginally
lower than in 2012-13. This is due to deceleration in the growth rate of the
combined category of trade, hotels, restaurants, transport, storage and
19
communications.
The survey, which was tabled in Parliament today, said that services in India are
emerging as a prominent sector in terms of contribution to national and states'
incomes,
trade
flows,
FDI
inflows
and
employment.
Further, it said that the immediate challenge in this sector is revival of growth.
India's services sector which was growing at a steady rate of over 10 percent
since 2005-06 has shown subdued performance in the last three years.
Revival, it said, could be achieved through reforms and speeding up of the policy
decision making, a targeted approach with focus on big ticket services.
"Some services like software and telecom were big ticket items that gave India a
brand image in services. While further focus on these services is needed to
retain and further our lead, the time has come to focus on some other high
potential big ticket items that have high manufacturing-sector and employment
linkages,"
it
added.
Going forward, it said, 2014-15 seems to augur well for the services sector with
expansion
in
business
activity
in
India.
"There are also signs of revival in growth of the aviation sector with the
announcement of new players like Air Asia and Tata-SIA Airline after a turbulent
period
of
withdrawals
and
losses
by
some
airlines,"
it
added.
Indications of revival in the world GDP and trade growth in general and of
developed countries in particular, could help in revival of the tourism and
shipping
sectors.
"With a stable government in place and growing optimism which could translate
into investment and growth, some quick reforms and removal of some barriers
and obsolete regulations in the services sector could help. The downside risk
however
is
the
fragile
20
global
situation,"
it
said.
The survey said many issues including domestic regulations hinder growth
prospects of the services sector, which if addressed deftly could help the sector
and leads to exponential gains for the company . Listing some general issues, it
said that there is an urgent need for a nodal agency and marketing for the
sector .Despite having strong growth potential in various services sub-sectors,
there
is
no
single
nodal
department
or
agency
for
services.
Services activities cover issues beyond trade and a more proactive approach and
proper institutional mechanism is needed to weed out unwanted regulations and
tap the opportunities in the sector in a coordinated way, it added.
There is also need for promotional activities for service exports like setting up a
portal, showcasing Indias competence in non-software services in exhibitions,
engaging
dedicated
brand
ambassadors
and
experts.
It also said that there is plenty of scope for disinvestment in services PSUs under
both
central
and
state
governments.
class
facilities.
"Third-generation ships are not able to enter the harbour and goods have to be
offloaded outside in smaller ships, adding to costs. Its immediate focus should be
on building world class ports providing world class services," it said.
On railways, it said that a proposal has been initiated by Indian Railways, for
making suitable changes in the existing FDI policy in order to allow foreign
investment in railways, to foster creation of world class rail infrastructure.
21
"The proposal envisages allowing FDI in all areas of the rail sector except railway
operations. Even in railway operations, FDI is proposed in PPP projects, for
suburban corridors, high speed train systems, and dedicated freight lines," it said.
While privatisation of railways has been successful in some countries like Japan,
it
has
failed
in
some
others
like
the
UK.
IMPORTS
Imports during October, 2014 were valued at US $ 39451.53 million
(Rs.242003.58 crore) representing a growth of 3.62 per cent in Dollar terms and
a growth of 3.16 per cent in Rupee terms over the level of imports valued at US $
38075.02 million (Rs. 234601.50 crore) in October, 2013. Cumulative value of
imports for the period April-October 2014-15 was US $ 273551.51 million (Rs
1651470.41 crore) as against US $ 268554.34 million (Rs 1590363.03 crore)
registering a growth of 1.86 per cent in Dollar terms and growth of 3.84 per cent
in Rupee terms over the same period last year.
Oil imports during October, 2014 were valued at US $ 12365.2 million which was
19.2 per cent lower than oil imports valued at US $ 15293.6 million in the
22
corresponding period last year. Oil imports during April-October, 2014-15 were
valued at US $ 94841.9 million which was 0.5 per cent lower than the oil imports
of US $ 95306.0 million in the corresponding period last year.
TRADE BALANCE
(As per the RBI Press Release dated 14th November, 2014)
A. EXPORTS (Receipts)
B. IMPORTS (Payments)
Imports during September, 2014 were valued at US $ 6174 Million (Rs. 37577.99
Crore).
C. TRADE BALANCE
The trade balance in Services (i.e. net exports of Services) for September, 2014
was estimated at US $ 6766 Million.
23
24
25
Chapter 3
LITERATURE REVIEW
26
LITERATURE REVIEW
Vis and de Koster [196] (with some 55 references up to 2001). An overview of relevant
literature for problem classes like arrival of the ship, (un)loading of a ship, 14 D.
Steenken et al .transport of containers from/to ship to/from stack, stacking of containers,
interterminal transport and complete terminals is provided.
Kozan discusses major factors for the transfer efficiency of multimodal container
terminals. A network model reflecting the logistic structure of a terminal and the
progress of containers is shown. Its objective is the minimization of the total throughput
time as the sum of handling and travelling times of containers.
Meersmans and Dekker present an overview of the use of operations research models
and methods in the field of design and operation of container terminals with its decision
problems on strategic, tactical and operational level. Fung presents a three-player
oligopoly error-correction model for forecasting demand for Hong Kongs container
handling services. Due to increasing demand and necessity of higher throughput, early
construction of new terminals is suggested.
28
Liu et al. [126]. The performance criteria that are used in this study to evaluate
and compare different terminal systems are summarized as follows: Throughput:
number of moves/hour/quay crane; throughput per acre; ship turnaround time: time it
takes for a ship to get loaded/unloaded; truck turna
29
CHAPTER 4
AIMS AND OBECTIVES
30
Development of action plans for the port requires the vision to be cascaded to a set of
actionable goals with a timeframe attached to them. Goals were identified through an
analysis of various elements of the vision. JNPT would need to undertake multiple goals
to achieve its vision. The goals that were identified for the port are illustrated below:
It is envisaged that the port will increasingly play the role of a landlord with limited
presence in port terminal operations (JNPCT). JNPT will evolve primarily into a landlord
port facilitating services by terminal operating companies and other providers. The
solitary terminal will be the responsibility of JNPT over the medium term horizon of the
plan period
31
PERSPECTIVE PLAN
32
33
As part of the business plan development exercise an action plan for the port was
developed for the next 7-8 years. This action plan was based on the short term goals
identified Reaching 10Mn TEUs of traffic at JNPT by 2015-16
Customers: JNPT would attract and retain customers through addition of core
and value added services.
Geographies: JNPT would focus on the northern and Maharashtra region and
would enable traffic from the regions through planned development within and
nearby the port.
Services: JNPT would provide value added services and would capture a larger
share of the logistics value chain. The strategy for achieving the goals would
need to be supported by a financial and commercial strategy.
Commercial Strategy: The commercial strategy deals with the three levers of
customer management, cost management and service offerings of the port. It is
aimed at achieving commercial success within the operating business
environment through effective management of customers and suppliers.
34
35
Capacity of the port would be 11.67 Million TEUs at 75% berth occupancy in 2015-16
and 2016-17. At 70% berth occupancy the overall capacity (under the current
geographical and policy restrictions) of the port would be 10.9 Million TEUs by 2015-16.
As liquid cargo handled by ports consists of products from various industries, the key
industries impacting growth of liquid cargo were studied. The forecast for the traffic was
arrived at 2 levels
JNPT liquid cargo traffic was estimated for the categories of crude, POL product,
chemicals and
other liquids. JNPT has no crude linkages with existing refineries and does not service
crude traffic at present. The crude traffic forecast for JNPT was based on ONGC plans
to ship a part of its offshore crude production at Bombay High via JNPT to the coastal
refinery of Mangalore. JNPT POL product traffic is largely coastal based traffic which
follows national trends of coastal traffic. Exports growth from the increase in refining
36
capacity in Mumbai region was factored into the forecast. Since the port can handle
certain liquid chemicals these were studied and grown at appropriate growth rates to
arrive at liquid chemical forecast. JNPT's edible oil/molasses traffic is a significant
portion of national traffic and this traffic is expected to continue. The overall forecast of
liquid traffic through JNPT reaches 15.4 Mntonnesby 2024-25 as seen in
exhibit
Liquid Traffic at JNPT
37
Vessel forecasts
Using the traffic projections for container and liquid cargo, a vessel forecast was carried
out for JNPT. A number of factors impacted this forecast, including the change in profile
of ships on the Europe Asia route as well as the gradual increase expected in parcel
sizes. The expectedvessel calls at JNPT are tabulated in exhibit. As seen the number
ofvessel calls at JNPTreach a peak of 5734 vessels in 2015-16 and then start gradually
decreasing. This is largelydue to the expected continued increase in parcel sizes.
38
39
40
41
42
43
CHAPTER 5
RESEARCH METHODOLOGY
44
RESEARCH METHODOLOGY
Objective
- To attract more container cargo to JNPT Ports.
- To study Western Hinterland Mapping.
- To study Port Choice Determinants.
Scope
-
Only loaded containers are considered for the purpose of study. Empty
containers are not part of study.
i.e. Port Infrastructure, Vessel Frequency, Port Location (From Sea Routes), Hinterland
Connectivity and Number of Container Freight station.
-
Design
Exploratory Research
Research Process
Hinterland mapping for container cargo.
Opinion of freight forwarders for five port choice determinants to derive ranking of the
same.
Data Collection
Source
-
Analytical Tools
-
Further Scope
-
The SWOT analysis was carried out through a SWOT workshop involving key
port stakeholders.
These stakeholders were divided into groups that individually developed a SWOT
matrix for JNPT.
Inputs from all groups along with KPMG analysis was used to arrive at a
perspective SWOT for JNPT.
The following guidelines were provided to the participants while developing the
SWOT analysis
46
Strength
A port strengths are its resources and capabilities that can be used as a basis for
developing a competitive advantagewhich the port currently possesses.
Weakness
A port weakness are resources and capabilities that the port lacks in
comparisons to its competitors currently.
Opportunity
Threats
Threats are events that can lead to reduction of profit and growth. Threats arise
due to changes that are occurringor are expected to occur in the external
environment in which the port operates.
47
Vision Development
Following the as-is assessment, the vision of the port was developed. The first step
was an understanding of the business environment of JNPT. Constraints and drivers of
change in the environment were identified as part of this exercise. An important
constraint that emerged was the limited space for terminal side expansion at the current
location .This understanding of the business environment was used as the basis to
identify strengths, weaknesses, opportunities and threats for JNPT. Key strengths that
emerged for JNPT were the frequency of services, available port infrastructure and
strong financial position. Weaknesses at JNPT include distance from major shipping
routes, limited draft and shortage of staff in key areas. The most significant threat for
JNPT is the increasing pressure on road and rail connectivity. Other threats for JNPT
include developments by private competitors.
For the purpose of assessing opportunities, they were divided into 3 broad categories
An analysis of potential cargo types for export import(EXIM) traffic on the basis of
two parameters, marketattractiveness and alignment to capabilities, indicated
thatcontainer and liquid cargo were attractive opportunitiesworth pursuing.
On analyzing the coastal trans-shipment opportunity, itwas found that certain factors
impacted
its
attractiveness,including
distances
from
major
shipping
routes,
othercompeting ports being developed and draft. As a result,the port could look at this
option opportunistically ratherthan as a key focus area. Aligned to the export
importtraffic focus, other potential value added services wereexamined which could
strengthen
JNPT's
positioning.Potential
value
added
opportunities
taken
up
48
Revenue potential
Growth potential
In the opportunity landscape for JNPT, export-importcontainer traffic, free trade zone,
distribution/logisticsemerged as attractive opportunities. In addition, Ro-Rocould be a
potential opportunity area for the port, which itcould pursue opportunistically. Based on
the assessment as well as the SWOT analysis, the vision was developedthrough a
visioning workshop carried out with port.
Marketing strategy
JNPTs marketing strategy would revolve around the levers of price, customers,
geographies, services andcommunication and would delineate JNPTs target
within each of the levers
Cost How would JNPT ensure competitive prices for its services and how
would it provide better value to itscustomers?
49
It is also imperative to realize that the marketing strategy outlined above would be
supported by a financial and
commercial strategy. The aim of the supporting strategies are as follows:
Commercial Strategy: The commercial strategy deals with the three levers of
customer management, cost management and service offerings of the port. It is
50
aimed at
JNPT's supplier network impacts the kind ofservices it can offer as well as the
costincurred in providing those services.
51
Services Offered
In line with the port development strategy, JNPT has defined certain focus areas over
the next 20 years. Theseinclude a strong focus on national export-import container
traffic as well as greater participation in the containerhandling value chain through
creation of logistics and free trade zones. Service offerings that JNPT is likely to
offerover the next few years are listed below
Logistics/Distribution zone
Marketing activities
Value added services - The port will develop value added services for customers to
increase the attractiveness of portand develop a sustainable competitive advantage.
These value added services would be in the area of logistics and willenable the port to
emerge as an integrated logistics hub in the country.
53
Best Value for Money - The port will endeavor to optimize its resources to generate
maximum throughput from itscurrent infrastructure. Apart from this the port will also
undertake automation projects to bring down the time and costrequired for various
processes. This will enable the port in lowering its overall cost for the customer.
Marketing activities - The port will also develop and expand a marketing team which
will undertake customermanagement exercises. This would primarily be aimed at
retaining and targeting key customers. The marketing teamwill take regular feedback
from customers and will have key accounts manager for strategic customers. These
keyaccount managers will resolve customer queries and issues.Contracts with
Suppliers: JNPT would ensure preparation of detailed specifications for all contracts and
orders toensure that quantities and goods and services procured are fit for purpose
using industry standards as the norm.Focus would be on optimal match of requirements
with order quantities. Contract management will take on an
increasing importance given the large number of projects likely to be taken up over the
next few years.An example of cost management in internal processes could be the
introduction of automation between CFSoperators and terminal gates. A different
illustration of cost management could be training of RMQC operators forcarrying out
double moves. This could translate into significant improvements in operational
efficiency and translate
into long term cost savings.
Marketing at JNPT
JNPT's marketing team will strive toward efficient customer management and
developing the same as a competitiveadvantage of JNPT over other ports. The role of
the marketing team will be centered around the following four aspects
Customers
Price
Promotion
Competition
54
Customers: The marketing team would be divided into key account managers. Each
account manager would beresponsible for 2-3 customers and would aim at maximizing
revenues from the customers as well as for resolving anycustomer related queries.
Price: The marketing team would constantly study the competitors and would play a
role in developing pricingstrategies for the port. These strategies would revolve around
volume discounts, growth discounts as well as routediscounts.
Competition: The team would regularly study the environment to develop reports on
competitor plans as well as futurescenarios. These would be provided to various
departments of the port for appropriate action. The team would also beresponsible for
identifying future opportunities. These can arise from specific routes, specific industries
or specificcustomers. The marketing team would then develop strategies to exploit the
opportunity for the port. These would be
passed to the senior management for review.
Promotion: The marketing team would regularly showcase capabilities of JNPT in port
and logistics to customers toattract new customers and retain strategic customers.
55
CHAPTER 6
QUESTIONARE
56
QUESTIONARE
Finally ranking wise list of port choice determinants are as follows - Shipping
agency?
57
CHAPTER 7
ANALYSIS
58
Analysis
Ports in India
Globalization has led to an increase in world trade highlighting the importance of ports
as a trade gateway. About 95% by volume and 70% by value of Indias international
trade is carriedout through its port. Indias coast line of 7517 km is dotted with 12 Major
Ports and 187 nonmajor ports. The Major Ports are under the control of the Central
Government and the Nonmajor Ports are under the respective State Governments.
Major Ports
The total volume of the traffic handled by all the Indian ports during 2005-06 was around
576 million tonnes, of which 423 million tonnes i.e. around 74 percent was handled by
Major Ports and remaining 153 million tonnes by the Nonmajor ports.
59
60
61
62
A detailed plan of action was developed to implement the strategy for the port over the
next 7 years (between 2007- 08 and 2014-15). The action plan attempts to cover the set
of projects/ initiatives to be undertaken by the port in the plan period across the
following areas - Creation of new infrastructure
Efficiency improvement
Organizational improvements
Dependencies:
Indicates
linkages
and
dependencies
between
projects
An overall implementation schedule for the various projects has been outlined
Navigational Facilities
The JNPT access channel which is an extension of Mumbai Harbour channel has a
depth of 11 m below Chart Datum (CD). The water depths in front of the berths at JNPT
are maintained at 13.5 m to CD.
The common main harbour and JNPT channelsectors are presently maintained at
depths 10.8
m - 11.1 m below CD. The total length of thedredged channel upto the end of Elephanta
deep
is about 15.21 Nautical Miles.At present, large size vessels up to 6,000 TEUsand
having a draft up to 12.5 m, navigate throughMumbai Harbour and JNPT Channels,
makinguse of the tidal window, which occurs twice in 24hours. Currently the channel is
used for two waynavigation of ships.
There are 2 mooring launches and 5 pilotlaunches to pilot the ships with 7 tugs for
towingthe ships.
63
Channel Limitations
At present, container vessels carrying up to 6000TEUs having a draft upto 12.5 m,
navigate
through Mumbai Harbour and JNPT channels,making use of the tidal window. Ships
having
draft larger than this cannot be serviced at JNPT.During monsoon ships with draft upto
11.8 m canbe serviced.
Navigational Facilities Mumbai Harbour and JNPT Approach Channel
64
Berthing Facilities
At present JNPT has three container terminals; JNPCT, NSICT and GTICT. Apart from
this JNPT also has a shallow berth and two captive liquid cargo berths for BPCL.
JNPCT is operated by JNPT and NSICT (set up on BOT basis). The Bulk cargo terminal
comprising the bulk berth and two multipurpose berths are under conversion as a Third
Container Terminal (on BOT
basis) by a consortium of MAERSK and CONCOR as GTICT. Liquid Chemical Terminal
Bharat Petroleum Corporation Limited (BPCL) and Indian Oil Limited (IOL) are
operating a liquid bulk terminal on BOT basis to handle bulk liquid chemicals, POL and
edible oil. Shallow Water berth - It can handle 165 m LoA for break bulk and container
purposes
Existing Port Facilities
65
Storage Facilities
Container freight stations are the hubs for import andexport of more than 80% of the
cargo handled by theport. Presently there are 16 Container FreightStations (CFS) in
operation outside the portpremises; while necessary investments are beingmade by few
more of them.The total capacity of CFSs is sufficient to handle thepresent container
traffic. There are around 20 empty
container yards that have come up near the JNPTarea to store empty containers.
The port had originally 6 Transit Sheds / Over FlowSheds of area 1,10,780 sq. m. and
open storage areaof 1,48,850 sq. m. within the port. Most of these havebeen
decommissioned / dismantled for conversioninto container stack yards and other yard
facilities.Additional details on port facilities are in Section 6 ofinception report.
Storage Facilities
66
67
Port Location
Port Infrastructure
JNPT emerges as the overall port ofchoice with Mundra and Pipapavperceived to be the
next best ports.Port users believe that in the futureMundra and Pipavav have the
potential tocapture JNPTs share of market from thenorthern regions.JNPT has high
ratings in areas such as
shipping frequency and hinterlandconnectivity.Mundra and Pipavav are rated highly in
terms of ease of paperwork.It is important to note that the parameterson which JNPT
has an advantage overothers are not entirely in JNPTs controlThese are areas such as
frequency and
hinterland connectivity.As frequency and hinterland connectivityof other ports improve
JNPT will facecompetition. Hence JNPT should plan todevelop sustainable sources
ofcompetitive advantage.
68
The three unique selling points of JNPT over other portswere found to be -Hinterland
Connectivity Hinterland connectivity has been covered in detail in the infrastructure
section.
Users believe that inspite of congestion problems, incomparison to other ports JNPT still
rates higher on connectivity. JNPT has the maximum number of regulartrains visiting it.
Pipavav and Mundra have a single track diesel connectivity while JNPT has a double
line connectivity.
Frequency Currently JNPT has the highest frequency of services to major shipping
destinations. As acomparison JNPT had 1772 (977 NSICT and 795JNPCT) vessel calls
while Mundra had 480.Infrastructure JNPT currently has the largest in frastructure in
comparison to other ports. The closest competitor for container traffic, in the western
region, to JNPT is Mundra. Mundra has 632 metres quay length and 6 cranes while
JNPT has 1280 metre quay length and 16 cranes (excluding GTIPL). JNPT therefore
hasan advantage compared to other ports in Infrastructure. Specific areas of advantage
for JNPT are the presence of 16 CFS operators with 12 new operators scheduled to
begin operations shortly. This is far more than its
competitors
69
70
Discussion of SWOT output and conduct of visioning exercise with port senior
management and key externalstakeholders
72
for JNPT, which effectively fell into 4distinct categories. These have been detailed in
subsequent pages
a. Port and Cargo related factors
Drivers and constraints
-
The limited area available at JNPT for expansion on the seasideand land-side in
the current location leading to capacity limitations
b. Hinterland factors
Drivers and constraints
-
The related impact of SEZs and other such initiatives by theGovernment leading
to additional growth in traffic
c. Regulatory Factors
Drivers and constraints
-
The imperative for major port trusts to operate under MPT actand TAMP
regulations
The entry of international and national private players into theport sector by
setting up competing ports
74
Development of JNPT
Based on the above analysis, opportunities were rated as shown below. Cargo types
like Dry Bulk, Break Bulk wereobserved to lack from a market attractiveness as well as
a JNPT capability perspective. LNG was perceived to be ofuncertain stability and
growth potential. Coal as a dirty cargo was not aligned with JNPT's positioning as a
generalcargo port. The Ro-Ro and Cruise opportunities seemed attractive financially but
were not aligned to the specific
capabilities of JNPT. Container and liquid cargo emerged as attractive opportunities.
Based on the above criteria,detailed analysis was taken up for specific export import
cargo types in the next stage, i.e.
Container
Liquid cargo
Container
Liquid Cargo
Revenue potential
Growth potential
A summary of the analysis of these opportunities has been provided in annexure 1.2 to
provide an assessment ofthe discussions that took place on these opportunities. The
analysis that has been carried out was used primarily tofacilitate discussions from a
JNPT perspective.
A summary of the opportunity landscape was prepared for JNPT based on revenue
potential and growth andsustainability as shown below, which was used for further
discussions during the vision development stage. Thislandscape is based on the
assessment of opportunities detailed in annexure 1.2. Benchmark figures are based
onJNPT data and industry research as illustrated in annexure
76
Workshop
Carried out keeping a few key factors in mind - JNPT has limited sea-side and land-side
resources which it must use prudently. The choice of vision has to be aligned to the
activities that are already undergoing at the port. Changing the priority of the port
completely to a different type of cargo form what it is handling today could be
retrogressive, even if the alternative opportunity was attractive Value-added
opportunities must be aligned with the vision of the port and the expected priorities in
the future. An objective to purely maximize the economic value of the available land
may lead to sub-optimal decisions. Key participants in the vision development exercise
were representatives from the following entities:
77
Each of these elements havea impact on the manner in which JNPT executes the vision
over the period of the business plan. The elements of the vision are Focus business areas
Other Cargoes serviced
Geographies of focus
Value Added Services
Guiding Principles
78
JNPT will maintain a clear focus on containers as its core business and will attempt to
remain Indias largest container
port providing customers with the best container handling experience in the country.
Other Cargoes Serviced
JNPT will also serve coastal trans-shipment needs of the Indian sub-continent for traffic
that arrives at the port in itsnatural course of operations. This cargo is likely to be transshipped coastally from other smaller regional ports. Theport may not actively invest
additional resources in seeking transshipment cargo. This transshipment cargo is likely
tobe regional or coastal in nature.Since the infrastructure required for Ro-Ro services is
largely similar to that of containers, JNPT will be ready to serviceRo-Ro in the future in
case the market for Ro-Ro expands and the potential for containers falls.Since JNPT
has already committed resources to liquid cargo it will continue to serve this cargo in the
future. It will also enable JNPT to derisk its cargo profile going forward.
Value Added Services
JNPT will conceptualize and establish a state of the art logistics hub offering
packing
and
re-packing,
labeling
and
JNPT will also attempt to enter into partnerships with various container rail freight
operators so as to develop dedicatedservices to JNPT from northern hinterland. This
gains importance in light of 13 new licenses for container rail freighthandling operations
having been issued by the Government of India. JNPT could enter into partnerships with
79
Ensuring safety and security at the port and development in the area around the
port
80
JNPT will conceptualize and establish a state of the art logistics hub offering Warehousing and forwarding facilities (including storage/stuffing/stripping of
containers)
Value added services processing of goods according to specific customer and
country-of-destination
requirements, packing and re-packing, labeling and assembly, sorting and invoicing
JNPT will also attempt to enter into partnerships with various container rail freight
operators so as to develop dedicatedservices to JNPT from northern hinterland. This
gains importance in light of 13 new licenses for container rail freighthandling operations
having been issued by the Government of India. JNPT could enter into partnerships with
one ormore of these players to offer a regular service to exporters/importers. Such a
partnership would help in retention of
JNPT traffic from the northern hinterland.
Guiding Principles
JNPT's guiding principles are obtained from its current mission statement which
stresses on fulfilling the needs of thenation as well as ensuring safety and security. The
significant guiding principles derived from the mission statement are Enabling Indian
trade through JNPT, efficiently and smoothly
Ensuring safety and security at the port and development in the area around the
port
A goal should be time bound and an immediate or mediumterm goal should have
a specific time line attached to them
82
PERSPECTIVE PLAN
83
Identification of Goals
Each element of the Vision is analyzed to identify the goals that would be required to
achieve the vision
Each element of the Vision is analyzed to identify the goals that would be required to
achieve the vision
As can be seen the Goals identified deal with the following critical aspects:
Capacity
Efficiency
Improve efficiency across the port to achieve 2200 TEUs/m quay length
Service offerings
84
PRIORITIZATION OF GOALS
85
PRIORITIZATION OF GOALS
86
87
88
Public private partnership to set up a new port : JNPT and a private developer
enter into an MoU to develop theport and enter as equity partners.
Acting as a development authority for the port :Here the government invests in
the venture and hands over thedevelopment activity at the port to JNPT. JNPT
then enters into BOT for terminals with private parties foroperations
89
Marine capabilities
90
Ports Hinterland is
"Hinterland" was borrowed from German, where it means literally the land behind
(a city, a port or similar). Some ports will have hinterlands that extend across
many states, while other ports will have smaller hinterlands.
91
92
Out of total 28 states in India only 9 states have a coastline and other states are
land-locked.
Eastern Hinterland
93
94
95
A reusable transport and storage unit for moving products and raw materials
between locations or countries; the terms container or box may be used on their
own within the context of shipping.
A related unit, the Forty-feet Equivalent Unit (often FEU or feu) is defined as two
TEU.
Container i.e. Number of TEUs movements are as below for selected ports. Only
loaded containers are considered for the purpose of study. Empty containers are
not included.
Whenever any FEUs movements are observed, it is treated as two TEUs as per
industry norms.
Mundra Port
96
Kandla Port
Source: ABG Kandla Container Ltd., Port Authority and MPSEZ Adani
PipavavPort State-wise Share of Containers Pipavav Port
Source: APM Container Terminal Ltd, Port Authority and Customs Department
97
98
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
CHAPTER 8
CONCLUSION
121
CONCLUSION
All Gujarat ports have rail distance benefit from ICDs which is of important factor.
This is not applicable in case of Madhya Pradesh and Uttar Pradesh.
Rajasthan and Gujarat both are potential hinterland for all Gujarat ports due to
proximity.
Haryana and Madhya Pradesh is still under influence of JNPT so long term
efforts are must from all Gujarat ports.
Punjab, Delhi and Uttar Pradesh are required to be maintained with same level of
quality and timely service.
Infrastructure wise JNPT is ahead of all ports but Mundra is also equipped with
modern and adequate infrastructure for coming few years so in future Mundra
can be seen as one of the biggest container handling port in west coast.
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CHAPTER 10
RECOMMENDATION
123
RECOMMENDATION
Port location from main sea routes and Port ICDs rail distance are such
parameters those cannot be changed.
Mundra, Kandla and Pipavav have benefit of Port ICDs rail distance factor
which they should focus more to attract container cargo from northern hinterland.
For Mundra and Pipavav, it is easier to serve the potential container cargo as
they have already penetrated in northern region states and they are equipped
with required infrastructure to meet near future demand.
Major issues are Vessel Frequency and Hinterland Connectivity which must be
achieved then first two rank determinants will be strength of both Mundra and
Pipavav to attract more container cargo. Though in last 6-8 months hinterland
connectivity is improved by rail frequency but still it requires more.
Mundra has to take care of Delhi region as Pipavav is looking at the same
lucratively.
Kandla can even focus for neighbouring states with existing facilities. It can
attract container cargo but has to undergo for many improvements.
Customs Clearance should be hassle free, less time consuming and smooth so
more container cargo can be attracted.
Associations should be done with Ship Liners and Industrial clusters to attract
more cargo.
124
BIBLIOGRAPHY
Raghuram, G., &Gangwar,
R. (2007, October) Containerization Building Global
Trade Competitiveness.
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Bhaskar, R. (2010, January 1).
Mundra poised to be Indias top port. DNA, p. 10.
Pandurangi, A.
(2008, September 23).
Docking with a new mindset for ports.
The Financial
Express, p. I1.
Indian Port Association.(2010).
Principle Commodity wise Traffic of Major Ports.
Retrieved January 30, 2010, from http://ipa.nic.in/traffic2.xls
Authors name is withheld on request.
(2010, February).
Non major ports: Just do it. Times
Shipping Journal, 14-15.
Raghuram, G., Morris,
S., Pandey, A., &Gangwar,
R. (2010, February) Introducing
Competition in Container Movement by Rail.
Unpublished Working Paper No
2010-02-02,
Indian Institute of Management,
Ahmedabad.
Singh, K. (2010, February).
Traffic Performance.
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