The total traffic volume handled at the country’s 13 ‘major’ ports directly under the Union Government’s control has registered a decline for a second successive year. That might not seem surprising in the light of the ongoing economic slowdown and associated shrinkage in merchandise exports and imports, more so in quantum than in unit value terms. But this macro explanation falls flat against the performance of the so-called ‘non-major’ ports, many of which are privately operated despite being technically under the jurisdiction of the State Governments concerned. Between 2010-11 and 2011-12, aggregate cargo handled by major ports fell by nearly 10 million tonnes (mt), while rising by almost 55 mt in the case of non-major ports. For the fiscal just ended, the data for major ports shows a further drop of 14.5 mt. The full-year figures aren’t yet available for all non-major ports. But going by the 33 mt jump in volumes recorded by non-major ports in Gujarat, 2012-13 might not have been too different.
Either way, the situation today is that the non-major or ‘minor’ ports – as they were earlier called – have a 40 per cent-plus share in India’s overall export-import, compared with 5-6 per cent till about 20 years ago. The biggest of them, Adani Ports at Mundra in Gujarat, handled 83 mt last fiscal, next only to the 94 mt by the country’s largest major port of Kandla. There are many other such privately developed ports – from Pipavav, Dahej and Hazira in the West to Karaikal, Krishnapatnam, Gangavaram and Dhamra in the East coast – that are giving the established major ports a run for their money. The reasons are not difficult to see. Public sector banks and insurance companies have survived competition in the post-reforms era largely because of the general public’s faith about their money being ‘safe’ with these institutions. But when it comes to telecom or ports, service quality trumps all other considerations. This argument holds good all the more for ports, where the users are members of the business community, who go purely by parameters such as tariffs, average waiting period for their vessels to find a berth, time taken to unload and load cargo, and so on.
If privately-operated ports have recorded higher traffic volumes notwithstanding de-growth in the maritime cargo market itself, it means that they have gained at the expense of their entrenched public sector counterparts. Given a choice between using a major or non-major port for outbound or inbound cargo, consumers seem to be voting with their feet in favour of the latter. The propensity to exercise choice has been greater when the new ports (Mundra, Gangavaram or Dhamra) have come up very close to the existing ones (Kandla, Vizag and Paradip, in this case). That should be a warning signal to the major ports to pull up their socks or meet the fate of a BSNL or MTNL.