WInDS oF CHAnGES In PorT SECTor

the shipping and port sector in India is expected to receive a boost in the near future with the increase of projected trade volume. A reviving economy in the major markets viz USA and Europe and search for new markets by Indian exporters are the indications that the Indian ports will have to face tough times once gain in managing the prospective growth. It is commendable that the Government of India as well as private companies have taken some significant moves to create capacity at the Indian Ports. And, launching of International Transshipment Terminal (at Vallarpadam in Kochi for instance) may be termed as a landmark initiative in this direction.

Some recent researches reveal that growth in long distance and containerised trade has led to the growth in establishment of transshipment hubs. It is not possible to establish direct shipping connections between every country because either there may not be enough volume, or the ports may be located distantly from each other. Therefore, a set of direct or transshipment connections are required to link all country pairs by maritime shipping. For this purpose, the transshipment terminals and intermediate hubs have been started. The emergence of major intermediate hubs favoured a concentration of large vessels along long-distance, high capacity routes, while smaller ports can be serviced with lower capacity ships. Consequently, the emergence of intermediate hubs has permitted liner services that would otherwise be economically unfeasible. The need to develop transshipment hub ports in India was documented by the Planning Commission in its Tenth Five Year Plan. The Vallarpadam terminal in Kochi has been identified as a transshipment terminal for the sub-continent by the Government of India. The objective of the Vallarpadam Terminal, the first- of-its-kind in India, was to cut down logistics costs for shipping lines, transshipping cargo in and out of the country. Currently, the containerised cargo, to and from India, is transshipped through the ports at Colombo, Dubai, Singapore and Salalah. However, from the very beginning the terminal was facing tremendous challenges to receive big vessels because of the existing Cabotage Law, which discourages coastal shipping, and as a consequence transshipping. It is commendable the Government of India recently relaxed the law to some extent, especially for this new terminal. The prospective investors for the shipping and port infrastructure sector are now eagerly waiting for a greater change in the mind set of the policy makers for the interest of the country’s economy.