Tel: +91 9820340418
Email: ramesh@imaritime.com
Strategy Report for Indian Port sector
" India has shown remarkable growth in various sectors in past decade and is expected to be on the high growth path. Investments in port infrastructure would be therefore needed to facilitate and promote trade. In 2006, Indian government launched National Maritime Development Program (NMDP) with sole purpose of rapidly augmenting port capacities. The client wished to understand the India port sector in the background of NMDP report, critically evaluate the report and do a port supply and demand assessment. This exercise was also important for the client who had been keen in providing financial assistance to Government as well as private participants in this port capacity augmentation. "Client
Client is one of the biggest financial institutions offering technical and financial assistance to developing countries around the world in areas of infrastructure, education, health, etc.
Challenge
Indian ports can be divided in two broad categories; Major ports and Minor ports. There exist twelve major ports controlled by central government and other minor ports controlled by respective state governments. In past decade, cargo traffic handled and capacity buildup at minor ports has been very rapid. This has been due to lack of capacity buildup in Major ports and increased private participation with state governments. In view of the port strategy, balance between capacity buildup at major and minor ports with best utilization of resources and time, had to be evaluated.
The cargo handled at ports mainly consists of Container, bulk and liquid cargo. Container cargo is result of manufactured goods trade. Food-grains, coal, ore, etc fall under bulk, whereas crude oil and petroleum products form major part of liquid cargo. Port demand forecasting is the key requirements for estimating port capacity. Thus an exhaustive demand forecasting exercise was required to estimate growth in all cargo categories.
Vehicular cargo traffic, transshipment and coastal cargo are some to the factors which would increase the port demand. Though currently they form an insignificant part of current demand, but in future one also has to understand the increase in demand resulting from these areas.
Modus Operandi
i-maritime follows a 360 degree approach of understanding each sector. For example to understand the growth in demand of thermal coal and coking coal, a study of power sector, iron and steel industry was done. Estimating growth of the domestic coal market and the demand generating industry finally gives requirement of imported coal. This imported coal estimate was now reviewed considering important policy changes and government approach. Studying the origin-destination analysis and possible coastal movements of coal finally gives demand of port coal handling capacity.. Such methodology was followed across the cargo categories.
Top down and bottom up approach was followed to look at the various aspects of the problem from different angles and finally reach to a robust solution. For example understanding growth in container, top down approach of study of various trade and economy growth parameters, its correlation with container growth parameters was done. Study of growth pattern in various commodity groups moved in containers, provided growth of container traffic in bottom up approach. Minimal deviation between results of both the approaches provides us confidence in the robustness of the solution.
With aim of optimal use of various resources, bottleneck analysis was done for each commodity. The focus was to find weakest link in the commodity logistics chain which had to be augmented along with port capacity in order to increase capacity of the entire chain.
In a competitive market condition, it is very difficult to predict the port capacity which would be augmented. Our methodology to deal with such situations is to create scenarios and analyze them with Game theory. In a multi-port competition game, with private port operator as a player, each player tries to maximize his profits. This in turn decides his strategy in augmenting port infrastructure and capacity. Medium term port capacity supply has been calculated using this approach.
i-maritime Proposition
i-maritime estimated the growth in major commodity heads across groups of all major and minor ports in India till 2015. Using Game theory approach two scenarios of estimated port capacities were done for this group of ports. Difference in forecasted cargo growth and estimated port capacities showed gap in demand and supply, which suggested changes in port capacity planning. Bottleneck analysis showed a need in shift of focus on inland logistics and port efficiencies to increase port capacities for best utilization of resources. Important part of imaritime proposition involved development of cluster of Transshipment hubs in South India for increasing contribution of Indian ports to sub-continent transshipment business and growth avenues for coastal and Ro-Ro traffic.
About i-maritime:
i-maritime Consultancy Pvt. Ltd.
11B 114, WeWork India Management Pvt Ltd
10th floor, Tower 1
Seawoods Grand Central, Sector 40
Nerul, Navi Mumbai (Maharashtra) 400706
ramesh@imaritime.com
Tel: +91 9820340418