Staying Afloat Amid Global Uncertainties

Amidst global uncertainties in the international trade and unprecedented structural changes in India’s shipping sector, India’s container market has reasonably fared well. However, to continue the growth momentum, the Indian shipping industry will need to be extra cautious of the global trends and policies.

- Shreya Bhattacharya

Year 2016 won’t be marked as an impressive year for international trade as the global shipping industry hit turbulent times, especially in the first three quarters, in wake of the highest plunge in the freight rates since 2009, Hanjin bankruptcy and all the mergers and acquisitions done for survivals.

In fact, the international trade has not yet been able to catch up to the same rate of growth, which it had exhibited before the global economic downturn of 2008-09. According to the statistics from United Nations Conference on Trade and Development (UNCTAD), global exports increased from $6.2 trillion in 2001 to $16 trillion in 2008, but after 2009, growth was abysmally low with exports increasing to just $16.6 trillion in 2015, although they had peaked at $19 trillion in 2014.

Noticeably, the container trade also shaped up in similar fashion. According to Drewry estimates, global container handling at the ports almost doubled from 248 million TEUs (twenty-foot equivalent units) in 2001 to 524 million TEUs in 2008 whereas it reached only 682 million TEUs by the end of 2015, an increase of just 158 million TEUs in seven years. In 2015, the global container throughput increased by a mere 1.1 percent, which is the lowest growth registered after 2009. Amid such gloomy environment, South Asian ports have emerged as bright spots, where container handling has increased by 5.3 percent. The global share of container handling at South Asian ports has increased from 2.9 percent in 2013 to 3.4 percent in 2016. India’s container port throughput that grew by merely 2 percent annually in 2015, registered an 11 percent growth in 2016.

India’s west coast ports have traditionally dominated the container market in India with European countries being primary trading partners. West coast ports handle around 70-75 percent of the country’s total container handling, while the east coast ports cover in the range of 25-30 percent.