For hundreds of companies located in Chennai’s hinterlands in a nearly 200-km radius, the city’s four private container terminals — two inside Chennai port, and one each at Kamarajar and Kattupalli ports in Ennore — are a critical lifeline. From small-time manufacturers of engineering goods to giant carmakers, all of them depend on the terminals to import valuable raw materials and export finished goods.
However, trouble is brewing as all four terminals are rapidly filling to capacity as container ships arrive bunched up or without adequate notice.
While terminal operators blame this on the geopolitical Red Sea crisis that has curtailed access to the vital maritime corridor, the trade points fingers at the “lack of terminal planning and manpower”.
At Chennai port, PSA Singapore operates one terminal and Dubai’s DP World operates the other. The Adani Group runs the terminals at Kamarajar port and the adjacent Kattupalli port in north Chennai.
Long waits
The four terminals will reach full capacity within two years, leading to choking of container traffic, warns S Satyanarayanan, Chairman of the Chennai chapter of the National Association of Container Freight Stations. He estimates that the terminals are currently filled to 90 per cent capacity. “We face import delivery delays in all the four terminals,” he says.
The operators are required to ensure import containers are transported from the terminals to the container freight stations (CFS) within eight hours. However, more than 50 per cent of the import volume currently takes 12-36 hours to reach the CFS.
This is a far cry from the global standard of 2-4 hours, he points out, leading to huge losses for importers, the CFS, and transport operators.
He rues that the cost escalation and loss incurred by import customers defeats the government’s goal of promoting ‘ease of doing business in India’ and reinforces the country’s dubious distinction of having the maximum logistics cost of producing and transporting any product.
He calls for corrective measures to help avert the huge delays and congestion that will ensue once the terminals reach saturation point by 2026.
“They need to take action on a war footing now to expand infrastructure and manpower, else the future of Chennai container terminals will be under threat and will badly hurt the trade,” he says.
‘Costly delays’
Chennai International Terminals Pvt Ltd (CITPL), a subsidiary of PSA Singapore, had said at the beginning of the year that its Chennai terminal faced off-schedule arrival of vessels due to the Red Sea crisis, which led to crowding of vessels and congestion at the terminal on certain days of the week.
“We are increasing the ground equipment, deferring planned maintenance of rubber tyred gantry, and getting more experienced operators. We are also in direct communications with shipping lines to shift their arrival window towards staggered days/ time to help spread the load better,” the terminal had said in a communication to the trade.
Refusing to lay the blame on the Red Sea crisis alone, J Krishnan of Natesa Iyer LLP, a leading freight forwarder, points to shortcomings in manpower, processes and infrastructure. “The issue is complex. When it comes to augmenting infrastructure, the gestation is long,” he complains.
Potential hub
Currently the Chennai region’s four container terminals handle about 3.2 million TEUs (twenty-foot equivalent units) annually. However, given the rapid growth in container trade, driven by the arrival of mega-ships, the Chennai container cluster must seize the opportunity to become a hub port, says Ennarasu Karunesan, an international maritime expert who was formerly the CEO of a large container terminal in Chennai.
Though the terminals have adequate infrastructure such as quays and other equipment, there is a need to recruit many more skilled operators to help ease the congestion, he says.
Karunesan calls for a detailed study to identify and address the responsibilities of individual stakeholders.
Both Kattupalli and AECTPL at Kamarajar port have reported over 10 per cent growth in cargo volume in the past four years.
Adani Ports and Special Economic Zone Ltd (APSEZ) will augment the handling capacity of Katupalli port, which has three berths.
The company will explore incremental capex investment for deploying additional equipment, strengthening its berths for multi-commodity handling, and development of road and ancillary infrastructure, a spokesperson says.