monthly report container

Container Update - October 2021 J. M. Baxi & Company

MONTHLY REPORT

OCTOBER 2021

CONTAINER

J . M . B A X I . & C O .

M A R I N E S E R V I C E S


Disclaimer:

The information contained in this market update is drawn from wide range of newspapers, business and trade magazines, government, company and

industry association websites. While all possible care is taken to verify the correctness and authenticity of information contained in this compilation, no

claim to independent authorship of articles is implied or intended. Readers are expected to make their own independent evaluation and verification of

information for their use. While all information contained in this report are believed to be correct, the editors of this compilation or J. M. Baxi & Co. do not

guarantee the quotes or other data and the same is provided only in good faith.

Table Of Content

Shortage of sea containers hits TN tea exports

Darjeeling tea exporters initiate talks with Chinese importers

DP World unveils solar power plant at ICTT Vallarpadam

DP World faces ire over new system of clearing import boxes at

Cochin Port

Maersk ‘repositioned’ 2.15 lakh empty containers in the first 8

months of 2021

Shipping industry group aims for net-zero emissions by 2050

04

06

07

08

09

11

KEY HIGHLIGHTS

PORT ANALYSIS


PORT ANALYSIS

TERMINAL Sep-21 Aug-21

Adani CMA Mundra Terminal (ACMTPL) 71320 77922

Adani Ennore Container Terminal (AECTPL) 43107 38764

Adani Hazira Container Terminal(AHCT) 49020 56224

Adani International Container Terminal (AICTPL) 261444 241068

Adani Kattupalli Port Private Limited (AKPPL) 28130 38147

Adani Mundra Container Terminal (AMCT) 91869 85281

APM Terminal Mumbai (APMT) (GTI) 158855 145242

Bharat Mumbai Container Terminal(BMCTPL) 88188 85413

Chennai Container Terminal (CCTL) 62271 63546

Chennai International Terminals Pvt Ltd (CITPL) 67103 66832

Dakshin Bharat Gateway Terminal (DBGT) 48433 50520

Haldia 13082 16081

International Container Transshipment Terminal, Kochi (ICTT) 68383 68841

JNPT 29354 42765

KAKINADA CONTAINER TERMINAL (KCTPL) 0 199

KANDLA 35571 44690

Bharat Kolkata Container Terminals Private Limited (BKCT) 48643 46884

NCT - Krishnapatnam (AKPCT) 5741 13331

Mumbai International Cargo Terminal(MICT) 81484 103242

Nhava Sheva International Container Terminal (NSICT) 74897 80612

Nhava Sheva India Gateway Terminal (NSIGT) 10081 98473

PIPAVAV 50777 54707

Tuticorin Container Terminal(TCT) 17123 17206

Visakha Container Terminal Pvt. Ltd. (VCTPL) 39745 44123

Paradip 711 806

T2 39034 28999

Container Throughput (in Teus)


The global shortage of sea containers has dealt a body blow to tea exports from Tamil Nadu - one of the largest

tea exporting States in India. The shortage has spiked the freight rates through the roof, so much so that

transportation cost is now equivalent to the value of the cargo transported in the container. Exporters are still

shipping their stock, despite the loss, just to retain their customers with whom they have been dealing with for

decades. The shortage started last year due to Covid-19 pandemic but the Suez Canal blockade and closure of

large Chinese ports due to virus spread early this year aggravated the situation mainly in the US and Chinese

ports. As on Thursday, around 65 large container vessels were waiting in queue outside Los Angeles/Long

Beach and around 25 outside Savannah (in the East Coast). In China, over 240 container vessels are waiting

outside various ports. This is disrupting the logistics globally.

Every year, around 4,000 containers (40-feet) of tea are exported from Tamil Nadu to various destinations,

including the EU; US; Russia and China. In December 2020, freight charges to Rotterdam from Kochi was

$1,950, but it is now $7,800, said Rahul Shukla, Director, SSK Exports Ltd, Coimbatore, a leading tea exporter.

“Early this year, we signed an agreement to send tea at a freight of $3,000 to Rotterdam but today the rate

is $8,000. We need to bear the additional $5,000 (`3.5 lakhs) leading to huge loss instead of making a small

profit,” he said.

Freight charges

Freight to US port Savannah in December 2020 was $3,000 for a 40-feet container but today it is about

$15,000, and that there is no guarantee of box availability, said Dipak Shah, Director of Crystal Tea, and

Chairman of the South India Tea Exporters’ Association. “We are shipping at a huge loss as we don’t’ want to

lose our valuable customers. Once we lose them, it is very difficult to get them back,” he said. “We usually send

SHORTAGE OF SEA CONTAINERS HITS TN TEA EXPORTS

Spike in transportation costs

bring losses to the exporters


cargo via Kochi or Thoothukudi ports. However, due to non-availability of boxes, we are forced to go to Nhava

Sheva or Mundra for one or two boxes. For three months, we have been waiting for boxes,” said Shah. A senior

tea planter, N Lakshmanan, Director of the Coonoor-based Golden Hills Estates Ltd, said that the escalation in

the freight charges is not the same between the CIF contracts and FOB contracts. ”The nexus between a large

importer and the shipping companies are different and they are trade dictums which are seldom made public,” he

said. Producers who had contracted on CIF terms will be the worst affected and naturally they dump the entire

quantity in the auction system. The exportable commodity very rarely gets appreciated in the internal market,

he added. Sriram Narayanaswamy, Senior Tea Auctioneer in Coimbatore, said that due to freight escalation, it is

very difficult for someone to give a price for the tea in the auction. Southern India produces around 230 million kg

of tea annually, of which 120 million kg is from Tamil Nadu produced mainly in the Nilgiris, Gudalur and Valparai.

Nearly 50 per cent of it is exported, he said. While there is no visibility as to how long this lean phase will continue,

the tea industry is grappling to find a solution, he added.

Source: The Hindu Business Line


DARJEELING TEA EXPORTERS INITIATE TALKS WITH CHINESE IMPORTERSDarjeeling tea exporters have initiated talks with Chinese tea importers to ship the quality first flush teas for the next

season. Industry executives said the development comes after the exporters lost a number of Japanese buyers and

that Chinese importers are willing to pay good prices for quality Darjeeling tea. If exports pan out as expected, China

may soon become a preferred destination for Darjeeling tea, they said. “We had been trying to enter the Chinese

market in a big way,” Anshuman Kanoria, chairman of Indian Tea Exporters Association, told ET. “The Covid situation

for the last one and a half years has thrown a spanner in our plans. However, we are in constant talks with the Chinese

buyers. Many tea trade shows are being held in China. Because of the current situation, we are not able to In China,

tea is considered among the seven necessities, along with wood, rice, oil, salt, soy sauce and vinegar. Seven-eight

years ago, Darjeeling tea traders had exported 20,000 kg of Darjeeling tea to China which became a hit withthe

youth in cities such as Beijing and Shanghai and was accepted for corporate gifting too. However, Darjeeling tea

exporters did not strongly pursue their presence in the Chinese market. The younger generation in China is leaning

towards black tea in the ready-to-drink format, said industry executives. China is the largest producer of green tea

in the world while India leads in black tea production. Earlier, when China purchased Darjeeling tea the importers

had offered a price of $15-40 per kg depending on the quality. Kanoria said the other markets where Darjeeling

tea is trying to make bigger inroads are the US, Japan and Germany. “We are also focusing on increasing domestic

consumption. However, what we need now is funds for generic promotion of Darjeeling tea in the targeted global

markets. We have approached the government for financial assistance,” he said. Kaushik Basu, secretary, Darjeeling

Tea Association, said this year’s Darjeeling tea production will be around 7 million kg and exports will be in the range

of 3-3.5 million kg. Kanoria said that for Darjeeling tea industry to get good prices, the industry has to upgrade the

quality of teas. “People associate India with Darjeeling tea and therefore there is a need to promote it aggressively in

the world markets,” he said.

Source: Economic Times

The younger generation in China is leaning towards black tea in the ready-to-drink format, said industry executives. China is the largest producer of green tea in the world while India leads in black tea production.


Set up at an investment of ₹3.7 crore, the

plant will help reduce 905 tonnes/per

annum of CO2 emissions.

DP WORLD UNVEILS SOLAR POWER PLANT AT ICTT VALLARPADAMDP World has unveiled a solar power plant with 1122 MW per annum capacity at its International Container

Transshipment Terminal (ICTT) at Vallarpadam. The plant is set up across 3.4 acres with an investment of over

₹3.7 crore. It has a peak production capacity of 830 kilowatt-hours. The solar plant will help reduce 905 tonnes/

per annum of CO2 emissions, equivalent to CO2 absorbed by approximately 41,580 trees in a year. The plant

will produce over 12 per cent of the terminal’s total annual power consumption. DP World is committed to

sustainable practices across all its facilities and is undertaking several measures to achieve Carbon footprint

reduction targets in a time-bound manner. This solar plant is part of the many planned milestones towards DP

World achieving Carbon Neutrality across all facilities in India by 2030, a press release said. Praveen Joseph,

CEO, DP World Port Terminal Cochin, said, “We are extremely proud to have set up this solar power plant

in the terminal. This reinstates DP World’s commitment to India and our contribution to the country’s goal

of becoming one of the leading clean and green energy producers in the world. We believe that working in a

sustainable and responsible way is essential to building a strong business for our customers, our people and our

society. Our aim is to achieve Carbon Neutrality across DP World facilities in India by 2030 and this solar plant

is yet another step in that direction.” This solar power project is in line with DP World’s sustainability strategy

‘Our World, Our Future’ that also supports the UN’s Sustainable Development Goal of climate change. The

company has plans to expand the production capacity of the solar plant by an additional 203 MW/per annum

in 2022.



Container freight stations (CFS) and the export-import (EXIM) trade in Cochin Port have opposed a new system

of clearing import containers introduced by DP World at its Vallarpadam international container trans-shipment

terminal (ICTT) from October 1, citing that it would entail extra costs for shippers reeling under sky-rocketing

freight rates. The ICTT has switched to the en-bloc model for import container delivery, whereby, CFS’s will have to

move containers on best pick/ en-bloc basis to their facilities and deliver the containers to customers from there.

Under the en-bloc/best pick method, the terminal operator hands over the container from the top of the stack in

the yard to the trailer for onward movement to the CFS. A container which does not follow the best pick/ en-bloc

model, will need to undergo (multiple) shifting within the terminal. If a CFS does not shift its nominated containers

as an en-bloc movement, then all the containers being delivered to that CFS will be billed a CFS shifting charge of Rs

800 for a 20-foot container and Rs 1,200 for a 40-foot container, DP World said in a trade notice. CFS’s which have

chosen best pick/ en-bloc basis movement should inform ICTT of the number of containers they plan to evacuate

the next day. Basis this, the terminal will inform the sequence of delivery and the CFS needs to ensure that their

trailers arrive in sequence and pick up the containers. A shifting charge of Rs 2,705 for a 20-foot container and Rs

4,058 for a 40-foot container will be billed to the CFS for containers picked out of sequence. If a CFS that has opted

for best pick/ en-bloc delivery, requires a container to be delivered on a non-best pick basis, then a shifting charge

of Rs 2,705 for a 20-foot container and Rs 4,058 for a 40-foot container will be billed to the CFS for that container,

DP World said in the trade notice. CFS operators say this will add to their costs, and they will be left with no choice

but to pass it on to the customers.nm“We will continue to move containers as is being followed currently under

non-en-bloc/non best pick basis and any charges applicable at the ICTT may be billed to the respective shipping

lines/customers only,” a CFS executive said. “We will not accept any bills on account of non-en-bloc/en-bloc, best/

non-best pick movements at ICTT,” he added. Of the six CFS’s serving Cochin Port, four are run by the Centre and

State-owned undertakings, while two are private facilities. The trade has urged DP World to defer the new system

till the matter is discussed with the stakeholders. “Traders are facing huge financial losses due to the steep rise in

freight rates and they are unable to sell their products in the market. In such a situation, why is DP World imposing

extra charges on the traders,” a trade source said. “If DP World continues with the new system, importers/ traders

will shift their import shipments to Chennai Port,” he added.


DP WORLD FACES IRE OVER NEW SYSTEM OF CLEARING IMPORT BOXES AT COCHIN PORT

Container freight station operators

say the new system will add to their

costs


But exporters still reel under shortage of containers

MAERSK ‘REPOSITIONED’ 2.15 LAKH EMPTY CONTAINERS IN THE FIRST 8 MONTHS OF 2021With India’s exports showing strong momentum since the start of the year, the world’s largest shipping line,

Maersk, repositioned as many as 2.15 lakh empty containers — moved empty boxes from a location that has

surplus boxes to a deficit location — in the first 8 months of 2021 to support the country’s economic growth.

Other shipping lines have also repositioned boxes, but this has not helped trade as a shortage of containers

continues to cripple exporters. “Maersk has repositioned empty containers like never before; 215,000

containers repositioned in the first 8 months of 2021 into India to support economic growth,” it said in its West

and Central Asia Market Update to customers. Further, the line has ‘in-fleeted’ 660,000 new containers since

July 2020, which has partly helped overcome the shortage of containers and filling in for containers that are

stuck in the ecosystem.

Exports outstrip imports

While domestic consumption in India remains low, exports remained strong, thereby increasing the need

for supplying equipment (sea containers) to customers. In the first half of 2021, exports were 40 per cent

higher than imports, which means that there are fewer containers available for exporters, Maersk said. The

purchasing managers’ index for August 2021 indicates continued growth in major economies like India (55.4),

Saudi Arabia (54.1), and UAE (53.8). This is reflected in a strong rebound in volumes compared to last year,

and lifted volumes being in line with 2019 figures. Normal service levels continue despite a high equipment

imbalance in the market caused by increased exports of retail and lifestyle segments to North America and

Europe and increasing demand for agriculture exports post-monsoon. Concor has levied an imbalance surcharge

to overcome equipment challenges in the Indian hinterland.


Reducing dwell times

“While catering to all exports from our contractual customers and customers with two-ways commitment, we

are additionally working to reduce dwell times for our equipment. So far, we have reduced the dwell time by up

to 1.5 days, making more containers available for our customers,” Maersk said. The amount of long-standing

laden containers on-ground remain a bottleneck to creating sufficient availability of equipment for customers.

Hence, any support customers can provide for faster return of equipment will positively contribute to the pool of

containers being available, Maersk appealed.

Strong demand

Maersk and some other lines have also repositioned containers, but the ground reality is that boxes have been

unavailable since the start of the year. Those who can afford to pay an ‘exorbitant’ rate can afford to take the

boxes, say multiple sources. “For three months, we have been waiting for boxes,” Dipak Shah, Director of the

Coimbatore-based Crystal Tea and Chairman of the South India Tea Exporters’ Association, told BusinessLine. The

situation has been really bad since the start of the year, he added. On the global front, Maersk said that container

demand remains strong and continues to run ahead of supply growth in Q2FY21. The combination of strong US

consumption, higher throughput capacity, and re-opening in Europe is expected to drive average year-on-year

container demand growth at around 6–8 per cent in 2021.



International Maritime Organisation aims for 50% reduction

SHIPPING INDUSTRY GROUP AIMS FOR NET-ZERO EMISSIONS BY 2050A major shipping industry group said Tuesday that its members will aim for “net-zero” carbon emissions by

2050, following a commitment to the same goal by the world’s airline industry a day earlier. The current

target set by the International Maritime Organisation, a United Nations body, is to reduce emissions from

international shipping by 50 per cent by 2050. The International Chamber of Shipping said it has submitted

a proposal to the UN for the industry to stop adding CO2 to the atmosphere by mid-century. “Talk is cheap,

and action is difficult,” International Chamber of Shipping Chairman Esben Poulsson said in a statement,

adding that the group’s proposal “sets out the how” as well as the what’ for decarbonising shipping by 2050.”

“A net-zero carbon ambition is achievable by 2050,” Poulsson said. “But only provided governments take the

unglamorous but urgent decisions needed to manage this process within a global regulatory framework.” The

UN’s annual climate change conference starts October 31 in Glasgow, Scotland. The ICS previously called for

a global surcharge on carbon emissions from shipping to help fund the sector’s shift toward climate-friendly

fuels. Environmental activists gave Tuesday’s announcement a cautious welcome but noted that the proposal

only covers carbon dioxide, not other greenhouse gas emissions. Like the airline industry, which this week

declared a target of net-zero carbon emissions in 30 years, shipping companies are counting heavily on the

idea that any carbon emissions remaining by 2050 could be “offset” with natural or artificial means of removing

CO2 from the atmosphere. “Real progress will come when they support the ambitious carbon price that island

nations have already proposed and ensure shipping emissions immediately start on a downward trajectory,”

said Aoife O’Leary, Director of global transportation at the Environmental Defense Fund. “To meet the pace

of climate action that science demands, we must hold the shipping industry accountable to real, near-term

progress toward decarbonisation,” she added.



REPORTS FOR OCTOBER 2021

J. M. Baxi & Co. Monthly Agri Products Update

J. M. Baxi & Co. Monthly Automotive Logistics Update

J. M. Baxi & Co. Monthly Cement Update

J. M. Baxi & Co. Monthly Chemical Update

J. M. Baxi & Co. Monthly Coal Update

J. M. Baxi & Co. Monthly Container Update

J. M. Baxi & Co. Monthly Cruise Shipping Update

J. M. Baxi & Co. Monthly Edible oil and Extractions Update

J. M. Baxi & Co. Monthly LNG & LPG Update

J. M. Baxi & Co. Monthly Fertilizer Update

J. M. Baxi & Co. Monthly Mineral and Metal Update

J. M. Baxi & Co. Monthly Oil and Petroleum Update

J. M. Baxi & Co. Monthly Port Update

J. M. Baxi & Co. Monthly Project Cargo Update

J. M. Baxi & Co. Monthly Seafarers Insights Update

J. M. Baxi & Co. Monthly Steel Update


Research Cell,

J. M. Baxi & Co., Godrej Coliseum, Office No. 801, 8th floor, “C” wing, Behind Everard Nagar,Off. Somaiya Road, Sion. Mumbai - 400022 INDIA

Contact Details:

Tel: 022 61077100 Ext 161/145,Mob: 091-7506004224 / 7045659111E-mail: [email protected],Website: www.jmbaxi.com

monthly report container

Documents