Good transshipment facilities will drive port sector growth
In spite of the vast coastline and more port facilities across the coastline, India is still lagging behind many ports in the region in cargo handling efficiency. <span style="font-weight: bold;">Anil Bhatia, Vice President - Sales & Marketing, TIL,</span> elaborates on the market scenario and outlook.<p></p><p> <span style="font-weight: bold;">Which are the major demand drivers of port equipment? What is the current scenario of port equipment market in India?</span><br />India's ports sector is currently in its best growth phase. Containerised trade is touching double-digit growth as against a CAGR of 4 per cent during 2007-17. Consequently, India presents a growing market for port and container handling equipment. Containerisation in India is on an upward curve and Government of India's investment plans in the ports sector are also very aggressive. Along with the development of Dedicated Freight Corridors (DFCs) and Multi-Modal Logistics Parks (MMLPs), government is also looking to develop the inland waterway sector under public-private partnership (PPP) mode to better connect the nation's ports with its hinterlands. The demand for port equipment is estimated to grow in a big way. Productive asset utilisation will also grow in tandem.</p><p> <span style="font-weight: bold;">How do you look at the pros and cons of the Indian ports in cargo throughput and handling facilities?</span><br />Maritime trade contributes to around 95 per cent by volume and 70 per cent by value of India's total trade. The total capacity of 12 Major Ports of India handling 61 per cent of India's maritime cargo is about 1,400 MMTPA. Plus, there are 200 notified minor and intermediate ports. Together, they play a crucial role in driving the country's economic growth. With a coastline of more than 7,500 km, India is the world's 16th largest maritime economy. Government of India seeks to increase port capacity to 3,130 MMT by 2020. Certain regulatory changes are required to improve cargo handling efficiency at Indian ports. The logistics costs of Indian ports are very high. The economy of port usage has to match global efficiency standards. More transshipment is absolutely essential to the success of India's strategy of port-led economic growth.</p><p> <span style="font-weight: bold;">What is the latest cargo traffic scenario in India?</span><br />As per available reports, during FY18, cargo traffic at major ports in India was estimated at 679.36 MMT.<br /> In the eight months till November in FY19, cargo traffic increased by 4.83 per cent y-o-y to touch 461.22 MMT. <br /> Cargo traffic at notified minor and intermediate ports was estimated at 491.95 MMT in FY18 and grew at 9.2 per cent CAGR between FY07-18. </p><p><span style="font-weight: bold;">How do you view the growth for container handling equipment at Indian ports, ICDs and CFS?</span><br />As I mentioned, India presents a growing market for port and container handling equipment like Hyster-TIL® reach stackers. With increasing containerisation at Indian ports, Inland Container Depots (ICDs) and Container Freight Stations (CFSs), significant new opportunities will open up for reach stackers, which we offer in alliance with our global technology partner, Hyster®. The future looks reasonably bright for the material handling equipment segment in general and reach stackers in particular. The primary growth driver will be the Sagarmala project that includes the creation of new ports in addition to the modernisation of existing ones. Additional boost will be provided by the development of DFCs and MMLPs.</p><p> <span style="font-weight: bold;">What are your latest products and solutions? </span><br />The Hyster-TIL® range of reach stackers by virtue of their outstanding maneuverability, superior handling speed and flexible stacking capabilities, have been designed to optimise space utilisation in container terminals. We also launched a new model - the RS 45 series reach stacker. It sets a new standard in low cost of ownership, without compromising on Hyster-Yale's principles of durability and toughness. To optimise effectiveness, the new truck features a powerful Cummins QSL9 Stage IIIA engine/Tier 3 in combination with a Spicer off-highway TE-27 transmission. In addition, it features cooling-on-demand, load sensing hydraulics with Variable Displacement Pump (VDP) technology, automatic throttle-up, integrated powertrain and optional empty seat engine shutdown, which help to further reduce total fuel consumption. The durable frame and boom have been developed using extensive analysis and testing with the RS 45-31CH model giving 45T in first row, 31T in the second row, and 15T in the third. Longer wheel base with 8 per cent reduction in total weight results in extended tyre life.</p><p>In addition, TIL is also an authorised dealer of Hyster® forklifts of capacity 8T and above, and a range of container handlers. All these machines are backed by TIL's unmatched product support and aftermarket solutions to ensure higher return on investment by way of definite gains in productivity. </p><p> <span style="font-weight: bold;">What are the key features in TIL equipment range?</span><br />TIL considers operational safety (man, machine and cargo) of utmost importance. That's why our entire range of Hyster-TIL® reach stackers incorporate state-of-the-art safety features, which employ onboard machine diagnostics and telemetry. The latter plays a vital role in vastly improving all aspects of fleet management û machine productivity, total cost of operations, operator performance and safety û by way of wireless asset management. Even older models and allied equipment from other manufacturers can be retrofitted with the telematics application to offer fleet data analytics and improve performance. Key features include: remote management of key performance indicators of the equipment, impact sensing, tracking regular preventive maintenance schedules, tracking and reporting aggregate costs, GPS tracking, access control, automatic shutdown, operator pre-shift checklist, etc.</p><p> <span style="font-weight: bold;">How do you look at the shift from diesel-powered to electrically powered port equipment in India?</span><br />Port operators in India, in sync with the growing trend globally, are concerned with pollution and climate change, because severe weather patterns can affect operations adversely and cause sustained losses in productivity and profitability. Consequently, it is now a matter of strategic imperative for port and container terminal operators to adopt environmentally sustainable technologies and practices. The shift from diesel-powered to electrically powered zero-emission or hybrid near-zero emission port equipment is certainly a welcome move. The intent behind any such transition should be to optimise pollution reduction while simultaneously maintaining commercially-viable operations.</p><p> <span style="font-weight: bold;">What are the major challenges faced by the industry?</span><br />The foremost challenge faced by Indian ports is to enhance port-hinterland connectivity by focusing on multi-modal connectivity. But such plans are conditional on the resolution of operational issues in the roads and highways sector, as well as difficulties associated with land acquisition. In order for India to develop into a global maritime hub through integration with global production networks, our ports will need to play a significant role in transshipment, which is essential to cross-continental traffic and smooth functioning of global trade. Presently, India has no major transshipment ports. So, the next big challenge for India is to develop good transshipment facilities.</p><p> <span style="font-weight: bold;">How do you assess the future of port equipment market?</span><br />The port sector is in expansion mode. Consequently, port equipment is likely to witness aggressive growth. Major opportunities are presented by: government's clear focus on ports by way of targeted budgetary allocation, faster clearances and removal of bottlenecks to on-ground activation of projects; Better availability of capital through innovative initiatives like REITs, IIFCL, etc; Big-ticket projects aimed at port modernisation and new port creation under Sagarmala initiative; and increased palletisation and containerisation of cargo. In addition, regulatory changes (e.g. new bidding guidelines for PPP contracts, new revenue model, creation of a dispute-resolution mechanism etc) will add more dynamism to the port sector with improved investments and liquidities. In the long run, this will translate into better earnings and higher margins for port and container terminal operators.</p>