Mediterranean Shipping Company (MSC), the world’s largest container carrier, has increasingly turned to Indian ports for transhipment operations due to severe congestion at Singapore, the world’s second busiest container port.
This strategic shift has led to increased activity at container terminals in India’s eastern and southern ports, such as Visakhapatnam and Kamarajar. The Visakha Container Terminal Pvt Ltd, managed by J M Baxi Ports & Logistics Ltd, achieved a significant milestone in May by handling 70,000 twenty-foot equivalent units (TEUs) for the first time. This surge in volume has been mirrored at the Kamarajar container terminal, operated by Adani Ports and Special Economic Zone Ltd (APSEZ), where MSC recently acquired a 49 percent stake. Consequently, the Kamarajar terminal is now operating at near-full capacity.
APSEZ’s flagship port at Mundra is also reaping benefits from the congestion in Singapore. Mundra recently docked the ‘MSC Anna’, the largest container ship ever to call at an Indian port. The vessel, measuring nearly 400 metres in length and capable of carrying 19,200 TEUs, handled 12,500 TEUs during its visit. Additionally, the international container transhipment terminal at Vallarpadam, operated by Dubai’s DP World at Cochin Port, berthed the ‘MSC Mara’, a 15,934 TEU capacity vessel, marking the largest container ship to dock at the facility.
The congestion at Singapore has emerged as a significant challenge for the container markets, with berthing delays extending up to seven days and a total capacity waiting to berth reaching 450,000 TEUs. These delays are a consequence of ships diverting via the longer Cape of Good Hope route to avoid attacks by Iran-backed Houthi militants in the Red Sea, an issue that has persisted since October last year. With Singapore being primarily a transhipment port, the delays have had a cascading effect on the global supply chain. Ships on the East-West trade routes, spanning from the US and Europe to the Far East, are experiencing schedule disruptions, resulting in spillover congestion at downstream ports.
In response to these challenges, carriers like MSC are opting to offload containers at Indian ports, which are less congested and have the capacity to accommodate larger vessels. These containers are then transported to their final destinations on smaller ships. This shift has not only mitigated the impact of Singapore’s congestion but has also bolstered the reliability of Asia-Europe container services.
The increased transhipment activity in India is expected to exert upward pressure on shipping rates, particularly with the onset of the busy season in July. Despite a slight dip in volumes at some Indian container terminals since April, the ongoing transhipment operations by MSC are providing a critical buffer.
This strategic move by MSC highlights the growing significance of Indian ports in the global shipping landscape, positioning them as crucial hubs for transhipment operations amidst regional disruptions. As global shipping dynamics continue to evolve, Indian ports are poised to play a pivotal role in maintaining the stability and efficiency of international trade routes.
