The document discusses containerization and the potential for India to develop hub and feeder ports. It defines containerization as a system of standardized shipping containers that can be loaded onto ships, trains, and trucks to efficiently transport freight over long distances. It outlines the major players in container shipping globally and some key metrics on India's container traffic and trade volumes. It analyzes the potential for India to establish hub ports at locations like Jawaharlal Nehru Port Trust, Mundra, and Vishakhapatnam that could consolidate container traffic due to their deep drafts and growing hinterland connectivity via rail and road networks. Developing hub and feeder systems in India could reduce transportation costs for exporters

1. CONTAINERIZATION
Building Global Trade Competitiveness
By:
Amitesh Tyagi
Aniruddha Ray
Pervinder Singh Chawla
Saurav Chaudhuri

2. DISCUSSION POINTS
What is containerization?
Players in the container supply chain
Containerization in India
Hub and Feeder Possibility in India
Additional focus on JNPT

3. WHAT IS CONTAINERIZATION?
As per Wikipedia:
‘Containerization is a system of freight transport based on a range of steel
intermodal containers (also 'shipping containers', 'ISO containers' etc). Containers are
built to standardized dimensions, and can be loaded and unloaded, stacked, transported
efficiently over long distances, and transferred from one mode of transport to another—
container ships, rail and semi-trailer trucks—without being opened. The system was
developed after World War II, led to greatly reduced transport costs, and supported a vast
increase in international trade.’
ISO Standard for containers:
a. Five common standard lengths: 20-ft, 40-ft, 45-ft, 48-ft and 53-ft
b. Capacity is expressed in TEU – Twenty-feet Equivalent Units
c. Height is not considered for expression
d. Maximum gross mass for 20ft is 24000 kgs and for 40-ft is 30,480 kgs.
Some big names in Container Transport:
NYK Line, Evergreen Marine, CMA-CGM, Maersk Line, MSC, Hapag-Lloyd, APL, Hanjin,
CSCL
In India – Shipping Corporation of India

4. PLAYERS IN THE CONTAINER SUPPLY CHAIN
CARGO SHIPS FREIGHT TRAINS
INLAND CONTAINER DEPOT TRUCKS

5. CONTAINERIZATION IN INDIA
Some numbers about Sea Transport in India:
• Sea Transport carries 95% of India’s exports by volumes and 70% by value
• India has 12 major ports and 187 non-major ports along 7517 km coastline
• Capacity handled in 2008 is 9.1 mTEU and expected to reach 21.0 mTEU by 2014
Drivers of Container Traffic
INTERNATIONAL TRADE PENETRATION OF HUB AND FEEDER SERVICE
GROWTH CONTAINERIZATION STRUCTURE
a. Indian exports reached $102 Billion a. Total tonnage handled in all major a. Growing traffic builds a strong case
in 2005
2005-2006 ports in India combined equaled for hubs in India – mainly one in East
b. Indian imports increased to $133 92247 Tons in 2008 2008-09 and West Coast
Billion in 2005
2005-2006 b. This was a growth of 25.6% over b. Current transhipments happen in
c. Both record a growth of 23% over the previous year. Colombo, Dubai and Salalah
previous year c. Principal commodities in India’s c. Potential savings for exporters with
d. Greater share of trade moving trade include engineering goods, hubs in India between Rs. 6000 and
towards finished goods (hence agricultural commodities, textiles and Rs. 16000 per TEU
requiring more containerization) readymade garments,
pharmaceutical products and c. Two handlings required currently –
e. Target set for $500 Billion exports. machinery. one at same hub and another at
Achievable by 2014. feeder hub
d. India’s container traffic projected
as 21 mTEUs by 2015. (More details follow)

6. EXPLORING HUB AND FEEDER MODEL IN INDIA
CURRENT STATE
Reasons for • Insufficient Traffic
• Cabotage Law
Hubs not • Insufficient infrastructure including draft requirement for a mainline ship
evolving in India
• Feedering time from other ports reduces
Advantages of a • Revenue from transshipments remains within India
• Savings for the exporters per unit TEU
hub port in India • Marine side traffic from and to hub port would move faster and cheaper

7. IN FAVOR OF HUB AND FEEDER MODEL
IN INDIA
Indian Sub-
Continent • Per World Bank Study, the western region (Mumbai and Gujarat)
can handle 66% container throughputs for the country, 27% can
Peninsular be handled in southern region and balance at eastern region
Advantage
• The sizes of the large mother vessels are increasing from 6000-
8000 TEU to 12000-14000 TEU requiring fewer trips by present
Shipping Trends 4000 TEU ships as feeders
• Port infrastructure needs to be scaled up to handle the new
emerging standards of the vessels
• India is growing at 7-8% CAGR.
• The exports of finished groups are growing
Emerging India • Government is realizing the need for more and more PPP
opportunities for an effective port management system

8. TOWARDS HUB AND FEEDER MODEL IN INDIA:
POTENTIAL HUB PORTS – KEY REQUIREMENTS
STRATEGIC LOCATION
POTENTIAL TO REDUCE TOTAL TRANSPORTATION COST
COST SAVINGS OWING TO LAND VALUES
LESSER DREDGING REQUIREMENTS
FACILITY TO RECEIVE HIGHER CAPACITY VESSELS AND THUS REDUCE OVERALL FLEET COSTS

9. TOWARDS HUB AND FEEDER MODEL IN INDIA:
Potential Hub Ports
A key requirement for an effective hub port is a deep draft so that large vessels can
navigate easily in the water and hence provide cheaper and higher quality service.
 The busiest port JNPT has a draft of 12.5 meters while Mundra has highest of 17.5 meters.
 The range of drafts in India are from 7.5 meters to 15 meters with an even spread on the east and
west coast.
 Colombo, the closest competitor, has a draft of 16 meters* and the proposal is to raise it to 23
meters*
 Based on the evacuation capabilities and the draft available criteria, the paper rightly points out
the following:
 Mundra is the best option purely based on the draft criteria
 JNPT is best fit with the hinterland connectivity initiatives that are on the anvil
 Vishakhapatnam is the best option for hub on the eastern side of the peninsula
 Further, the business plan of JNPT points out that the port is planning to intensify dredging so that
it can deepen channel up to 14 meters. There is also a growing competition among Indian ports with
the private players getting in the port management through PPPs.
* Port website

10. TOWARDS HUB AND FEEDER MODEL IN INDIA:
Potential Hub Ports (Current State of JNPT)
Source: Business Plan, JNPT Port Website

11. TOWARDS HUB AND FEEDER MODEL IN INDIA:
Potential Hub Ports (Hinterland Connectivity)
Hinterland Connectivity is required for smooth and well coordinated container traffic
inflow and outflow from the port. This is important for a port’s position as a hub.
Rail Evacuation
 JNPT enjoys a competitive advantage over the other ports as far as the hinterland connectivity is
concerned as is quoted in the paper. Containers bound to countries such as China and Japan also prefer JNPT
over others for this reason
 Gujarat ports despite better draft suffer from lack of sufficient hinterland connectivity leading to costlier
transports to and from these ports both time-wise and money-wise
 Congestion in the Tughlakabad-JNPT corridor is heavily congested and freight trains get a lower priority
over passenger trains. Suggestion is to explore double stack option in this corridor
 However, double stack option feasibility needs to be assessed considering as it increasing the
overall height of the train.
 China faces a problem of lower electrical transmission lines in its railway network. A similar
disadvantage is possible in Indian electrical transmission wiring. Also a review of the heights of
road bridges over railway tracks needs to be studied before the double stack can be explore as a
viable option.
 Some countries have adopted shorter containers for double stacking. Economic viability of this in
JNPT and Indian context needs to be analyzed.
 PPP models have evolved with Kutch Railway Corp and Pipavav Railway Corp.

12. TOWARDS HUB AND FEEDER MODEL IN INDIA:
Potential Hub Ports (Hinterland Connectivity)
Road Evacuation
 More maturity is required in the Indian context as far as the road connectivity goes. Some
projects on port connectivity have been shelved in recent past
 As mentioned in the paper, the future plans of NHDP are not covering port connectivity
 Movement of empty trailers, trailer parking around depots, maintenance, facilities for drivers etc
need astute traffic planning else situations of congestions are possible
JNPT advantage
 JNPT has a double line connectivity while Pipavav and
Mundra have single track diesel connectivity
 However, JNPT hinterland connectivity is reaching its
peak capacity
 JNPT is considering barges and double stacking to
remove capacity constraints
 JNPT has signed an MoU for partial funding of a road
expansion project
 Mundra and Pipavav are also persuading government
for additional focus on hinterland connectivity

13. TOWARDS HUB
AND FEEDER
MODEL IN INDIA:
Potential Hub
Ports (Hinterland
Connectivity)
a. The traffic from
northern part of the
country is decreasing
due to the increasing
infrastructure for
other locations.
b. JNPT would continue
to serve as the port
of choice for captive
markets.
Source: Business Plan, JNPT Port Website

14. Potential Hub Ports (Hinterland Connectivity)
And Other Considerations
Other Considerations:
 Coastal Shipping
and Inland
Waterways
 Integration with
coastal and inland
water transport for
evacuation needs
 ICD/CFS
Infrastructure
 Concepts of SEZ and
FTWZ would gain
more consideration
 Local connectivity
with minimum
traffic interference
 Customs and bond
warehouses
 Rail connection to
gateway ports
 Parking spaces
CAPACITY UTILIZATION OF RAILWAY SECTIONS

15. TOWARDS HUB AND FEEDER MODEL IN INDIA:
Potential Hub Ports (Other Issues)
IT Infrastructure
 Standardization , network and information sharing and knowledge products requires policy and
governmental interference to build more robustness and effectiveness around the IT systems.
 Usage of GPS and RFID should be introduced
Domestic Traffic
 More focus needed towards the domestic traffic as well
 Opportunity for customized containerization possible with domestic traffic encouragement
Leasing and Manufacture
 More encouragement should be given to manufacturing of support elements for the marine
supply chain through containerization. This would comprise of containers, wagons,
tractors/trailers and cranes
 Leasing by non-shipping line owners is a beneficial business model as observed in other
countries
Location of SEZs
 Government should be urged to build more and more SEZs near the ports to minimize
connectivity requirements

16. TOWARDS HUB AND FEEDER MODEL IN INDIA:
Potential Hub Ports (Other Issues)
Regulation – Following should be the focus areas for regulation
 Licensing
 Security
 Port Tariffs
 Shipping Line Conferences
 Customs
 Cabotage (laws that a govern trade or navigation in coastal waters of a
country to operate the air traffic within its territory)
 Environment and Conservation
 Safety
 QoS
 Dispute Resolution

17. TOWARDS HUB AND FEEDER MODEL IN INDIA:
Potential Hub Ports (Closing Notes from paper)
Closing Issues – In line with the industry requirements
 More PPP models need to be adopted in the sector. Privately operated terminals are
the way forward
 Roles of landlord and operator should be clearly delineated (JNPT vs JNPCT)
 Port Authority should focus more on:
 Landlord Function
 Regulatory Function
 Coordination Function
 Facilitation/Promotion functions
 Scale needed to meet better economies
 Tendering and bidding should be more streamlined and transparent
 More global tendering should be encouraged
 Training needs in officials to build a supply chain and marketing mindset
 Technocrats rather than bureaucrats needed for port management
 Shipping Line Conferences

18. TOWARDS HUB AND FEEDER MODEL IN INDIA:
MORE ON JNPT VISION STATEMENT

19. TOWARDS HUB AND FEEDER MODEL IN INDIA:
JNPT - IDENTIFICATION OF GOALS

20. THANK YOU