Vizhinjam Port - The game changer of Indian and world shipping & logistics
By Eswaran CP, Consultant
This is purely an analysis, more than an article, because the intention is to highlight the opportunities and prospects for shipping, trade, services, liner, feeder, logistics plus other verticals that are emerging with Vizhinjam Port in Kerala as a result of the natural deep water draft and position of the port close to the international sea channel, and its focal position in the Asia-India region. Given that the port can accommodate Megamax vessels, it is a boon not only for India but also for the countries around the region, as a Gateway Transhipment Hub.
There shall be drastic changes in feeder/liner service patterns, tonnages, size/capacity/type, rescheduling and revamping of services etc. with the commencement of Vizhinjam Port which will be the Game Changer of Asian Shipping.
With Vizhinjam Port, feeder services/schedules/new feeders/liners from the West and East Coast of India shall go through major changes. It will make a major difference in the Indian/Indian regional container shipping, logistics and other verticals.
Primarily, East Coast feeder services shall see drastic changes, where lots of potential possibilities arise - either some of the services shall get synchronised or rescheduled or combined with existing/new services, or new JVs/new feeder ventures/alliances will be formed to connect Bangladesh ports (having the most potential)/Myanmar with East Coast ports of India to call Vizhinjam for enhanced, prompt and time-saving connections with Megamax liner vessels at Vizhinjam.
Because Megamax calls in/out of Vizhinjam shall reduce the transit time of countries in the Indian region for cargo/containers/logistics, subject to Megamax schedules with increased frequency of calls and best multiple hubs for transhipment, compared to the transit times of the existing liner services. Megamax shall thus be the game changer of shipping.
Presently, Megamax vessels call specific ports around the globe due to limited ports being able to accommodate them. Hence, an alternate/combined beneficial working schedule might be used by the liners by transhipping the units at/to/through potential/ key/major/captive transhipment hubs at Asian/some of the Middle Eastern/Mediterranean-European transhipment ports to offer best services.
If feasible, Megamax vessels can even top-up/maximise by picking up containers from ports of call en route to Vizhinjam for hub-spoke movements, which can benefit per TEU costing since the operating cost per TEU should be lower for Megamax if maximum capacity is utilised.
Key beneficiaries
Bangladesh, Myanmar and East Coast ports of India will benefit the most if the feeder schedules are connected with the Indian East Coast and move the containers to Vizhinjam for transhipment instead of Singapore and Port Klang, and again connect on Megamaxes or even liners. This “Forward Feedering” or connections through Vizhinjam could save at least 9 to 15 days for all these ports’ originated cargoes. All subject to how the vessels and sked are planned.
This means connections at Singapore and Malaysia shall be shifted to Vizhinjam with “Forward Feedering”.
Vizhinjam Port shall become the focal point for the Megamaxes of the Asia region, the Right Junction, which shall also boost Indian-Asian regional shipping and trade.
Hence, South East Asian shipping will go for major volume shifts and there could be impact on schedules with Forward Feedering through Vizhinjam, saving time and money.
With Forward Feedering, the worldwide service lines shall find that the cumulative equipment dwelling time of some of these sectors are reduced with Vizhinjam – India-centric transhipment.
Feeder variations
Feeder vessels may go for higher capacity if they know how to tackle the demand with change in schedules, with Kolkata, Haldia, Vizag, Chennai and other East Coast India container terminal ports connecting Bangladesh, Myanmar etc. Bangladesh ports should especially demand more feeders to Vizhinjam i.e. Vizhinjam shall open up for new feeder and liner services.
The lines shall specifically opt for captive feeders in order to get their connections well with Vizhinjam, and at the same time other feeders may get the support of the lines as per the schedules, enabling to fill the maximum on Megamax/lines.
Even the West Coast will see drastic changes in feeder/liner schedules once Vizhinjam is opened up.
Changes in international schedules
African port schedules, especially East Africa, shall see changes since the containers originating from Bangladesh, Myanmar, Pakistan, India, Sri Lanka may opt for Vizhinjam because the transhipment volumes from international ports around India and volumes generated from various Indian ports can be fed quickly to Vizhinjam, which can be clubbed and the focal point can be worked with higher tonnage liner vessels for African cargo. Maybe in the future, with improved port infrastructure, more African ports will be added to the schedule, as per permissible draft. This will save time and cost.
Similarly, the cargo volume originating from Indian regional ports, destined for South America, Central America, Mediterranean ports, Black Sea ports, Indian Ocean ports, apart from African ports etc. could also be clubbed and transhipped at Vizhinjam, resulting in getting rid of the scarcity of slots/space being faced often by Indian or Indian regional trade. This will be a great relief to the trade and bring them more business due to prompt connections, which is most important for the growth of countries in the Indian region.
For example, units from origin and en route from South Asia get connected and when they come to Indian ports, the vessels often face restricted allocation and the trade faces extraordinary delays in getting connections even from load ports. The solution therefore begins with Vizhinjam.
If this happens, then Vizhinjam can even open up direct services to various ports with ideal tonnages and Megamax (both ways) services as mentioned, because lots of containers can be clubbed from all the countries around India, even from South East Asia, which shall be beneficial to the trade of the respective countries. Thus can open up opportunities for new services, routes, schedules, or revamping of existing services etc. With Vizhinjam, this all shall happen in the course of time with Forward Feedering.
Saving in time/money/cost
Any hub created saves lots of time/money/cost, which benefit the trade and the customer. More business will accrue to global trade through Vizhinjam, or any transhipment port coming up in India. In fact, India can be a focal or pivotal or centric transhipment hub to the world and save billions in cost, benefiting the economy and people. This shall gradually help reduce the reliability on one particular country for the needs of the people.
The main factor here is saving time, given the sea distance between Bangladesh, Myanmar, Indian East Coast ports via Vizhinjam when compared to containers moved to Singapore/Malaysian ports.
Presently, containers are moved to Singapore/Malaysian ports for connection and transhipment from Bangladesh/Myanmar/East Coast India ports etc.
The advantage via Vizhinjam is that it helps the trade and lines to save considerably on transit time/cost i.e. instead of transit via Singapore/Malaysian ports, the dwell time at transhipment and then connecting on Megamax/liners to destinations, where the vessels use more or less the same channel close to Vizhinjam (since, for example, it presently crosses or passes close to Sri Lanka and through Sri Lankan ports which takes approximately 12 to 15 days overall subject to vessels/vessel schedule).
The advantage of feedering to Vizhinjam is that it shall take approximately 4 days transit plus dwell time at CY to connect to Megamax or liners, which even helps to get advance connections due to Forward Feedering. This means reduced container dwell time and transit time. So Vizhinjam should bring down the cost.
There is thus saving in transit time for the trade and lines if feedered or moved through Vizhinjam.
Similarly, there should be reverse working to carry the imports originating through Megamax or other liners to all the Indian regional countries by the same feeders and liners, because one-sided movement may not help to sustain the cost. This will create captive reverse volume, making the forward feedering successful, benefiting the feeders and liners.
New opportunities
Thailand’s Southern Economic Corridor project and development of Ranong port may even help Thailand trade via Vizhinjam. There may be new opportunities for feeders to club volume of Ranong port with Bangladesh ports and maybe Myanmar too, plus Indian East Coast ports, which would be feasible for Vizhinjam to get quick connections and save time and money both ways.
Vizhinjam should become the focal port for many liners and even feeders in the years to come, and even for South Eastern or Middle East cargo.
Megamax the future?
With the Megamax order book swelling and carriers opting for the best, most advanced, high capacity, fuel-efficient, or multi-fuel option vessels, trying and reducing the draft as far as possible with max capacity, even slim designs as far as possible, it enables accommodating maximum port calls around the globe. This means that Megamax could be the future of vessels. Because the trade needs trouble-free and quick movement of their exports and imports, which is only possible with Megamax with Indian transhipment hubs.
If the trade, shipping lines, the port service providers, logistics companies etc. do not equip to reduce the cost of the end product, there shall be volume shift and even production shift, because overall higher cost affects the end user. It is not only the cost but the stability of policies that is required for stable economic growth.
The Indian port sector, with increasing projects including 15 key port infrastructure developments projects to meet future demand, especially container terminals/berths, is getting equipped accordingly.
Vizhinjam Port can also be one of the catalyst facilities for the India-Middle East-Europe Economic Corridor (IMEC) along with other upcoming transhipment hubs. India could thus become a catalyst for world shipping and a logistics focal point, especially with the Middle East and UAE.
This could be the beginning of India becoming one of the Main Transhipment Hubs of this Asia Region since if all these countries around India can generate sufficient volumes to all over the world and India becomes the right transhipment hub for them, it should help provide cost-effective products and cost-effective freight and logistics.
All the best to Vizhinjam, God’s Own Country’s port of Bharat-India, which will do wonders for India-India regional shipping.
(The views expressed here are the author’s own.)