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Two years in, India's cabotage change fails to lift local carriers

INDIAN shippers are facing capacity shortages and high rate increases, despite cabotage liberalisation that was to solve this with more direct carrier calls, reports IHS Media

28 October 2020 - 19:00

INDIAN shippers are facing capacity shortages and high rate increases, despite cabotage liberalisation that was to solve this with more direct carrier calls, reports IHS Media.

Two years ago cabotage liberalisation foreign-flagged liners became free to transport laden export-import containers for transshipment and empty containers for repositioning between Indian ports.



Container volumes through major ports, increased two per cent in fiscal year 2019-2020 to 10 million TEU from 9.8 million TEU a year earlier.



But the volume of containers that enjoyed origin-to-destination port pairings - without the need for intermediary calls - fell to 5.77 million TEU from 5.89 million TEU in 2018-19.



In contrast, foreign transshipment continued at the same pace. Of the 10 million TEU, 2.93 million TEU, or 30 per cent, found their way into the destinations via hub ports in the region, mainly Colombo, Singapore and Port Klang. That share is relatively unchanged from 2018-19 when relayed movement stood at 2.96 million TEU.



Colombo's share of Indian transshipment cargo fell to 1.3 million TEU from 1.4 million TEU in 2018-19, an outcome that could be attributed to Hapag-Lloyd and Ocean Network Express (ONE) jointly opening a South India-Europe routing last year.



Local shipowners of the Indian National Shipowners Association (INSA) are displeased. 'The relaxation for foreign ships to carry coastal feeder traffic has not led to advantages for India. The trade has seen no benefit at all due to this,' said INSA chief executive Anil Devli.


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