MUMBAI: The Sri Lankan financial and fuel crisis could prove to be a windfall for India's global trade logistics with Indian ports already starting to benefit from the disruptions in Colombo.
The Port of Mundra, because of huge demand, is emerging as the costliest port containers for the first time this year. In April, it was the third most expensive port.
Increase in container demand and higher traffic are the major factors contributing to the average container price at Mundra shooting up in May to US$2,489 per TEU.
"Due to the Colombo crisis, more and more transshipment containers have been directed to the ports in India," said Christian Roeloffs, Founder and CEO of Container xChange, a logistics tech company that offers a container trading and leasing platform.
Ports in South India have gradually started expanding their capacity to handle increased cargo traffic owing to the continuing crisis in Sri Lanka, he said.
Another key indication is the rise in Container Availability Index (CAx) values at Nhava Sheva from 0.73 in week 21 (last week of May) to 0.76 in week 22. In the following weeks, the CAx is expected to flit between these two numbers. CAx values of over
0.5 mean that more shipping containers are entering the Indian ports, and there is less demand for export boxes.
Amid the tensions in Sri Lanka, the Indian subcontinent's dependence on the Port of Colombo is also being highlighted. Around three million TEU export-import cargo is routed from India via Colombo port every year. Thus, it handles around
50 per cent of Indian transshipment cargo.
Said CareEdge Ratings Executive Arunava Paul: "Initial estimates suggest that 50,000-70,000 TEU of export-import cargo are expected to be diverted to Indian ports during the April-June quarter of 2022. However, this is minuscule and constitutes only two per cent of the total transshipment cargo routed from India.
"Intermittent operational disruptions in Colombo Port have increased the turnaround time for vessels. However, the vessels which cannot wait are only being diverted to Indian ports. The total volume diverted is not very meaningful as compared to overall transshipment cargo volume.
“Overall volume at Colombo Port is not impacted much. But if the disruptions continue for long, it may benefit Southern ports and also the Mundra Port, which has deeper draft and mechanised cargo handling for faster turnaround of vessels."
