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Chennai port gains from rail push but new threat looms ahead

CHENNAI Port's rail push to ease pressure on roadways appears to be paying off, but it's too early to tell if that positive outcome is the beginning of a long-term trend.

India's busiest east coast gateway's rail share in the first two fiscal months was slightly higher than that in the same period of 2016, climbing to 5.6 per cent from 5.3 per cent previously, according to an analysis of port statistics collected by IHS Media.

By volume, April to May export-import freight moved by intermodal rail totalled 14,511 TEU, out of total throughput of 256,892 TEU, versus 13,021 TEU and 244,510 TEU, respectively.

By contrast, Chennai's share of truckloads edged down to 94.3 per cent from 94.7 per cent during April to May 2016, or 242,381 TEU, compared with 231,449 TEU a year earlier, statistics show.

Truck congestion has long been a nightmare for shippers and container lines using terminals at Chennai and as a result, the port has lost mainline calls to nearby private rivals such as Kattupalli and Krishnapatnam in recent months, according to IHS Media.

To tackle those issues, the port authority in coordination with state-owned rail operator Container Corporation of India (Concor) has added rail services, including time-guaranteed runs and implemented tariff incentives on truck routes.

Additionally, the port authority is working with railway authorities to develop a dry port at Jolarpet, about 140 miles from the harbour, to help tap cargo hauled by trucks on the route, which accounts for roughly 50,000 TEU annually, according to port estimates.

Though Chennai's capacity utilisation is still under heavy pressure amid growing competition from private rivals, a five per cent volume gain in the first two months signals a turnaround for the public harbour on the back of productivity improvements fuelled by those road-to-rail freight conversion efforts and the addition of an intra-Asia call early this year.

However, the opening of a new terminal in the coming days at the neighbouring Ennore port could set back Chennai's turnaround. The Adani Ennore Container Terminal includes a 400 metre (1,312-foot) quay, four rail-mounted quay cranes, 12 rubber-tyred gantry cranes, and a capacity to handle 800,000 TEU per year in the first phase, going up to 1.4 million TEU at full buildout.

That threat is reflected in Chennai's fiscal 2017 to 2018 throughput target plan, which is set at 1.39 million TEU, a seven per cent drop from last year's volume of 1.49 million TEU, according to a port presentation to the Ministry of Shipping.

"Ennore will emerge as a strong alternative to the Chennai port once the former comes up with the planned container terminal," according to a report from global management consulting firm Boston Consulting Group.