Box Ships Inc (TEUFF)

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Adani Ports, Visakha Container Terminal seek Cabotage relief

Adani Ports and Visakha Container Terminal are still waiting for the shipping ministry to relax the stringent coastal shipping rule that has the potential to double their transshipment business, after a similar relaxation was granted to Vallarpadam port in Kerala a year back.

Cabotage rule prevents movement of cargo from one Indian port to another by foreign vessels. Therefore about 70% of Indian container cargo is transshipped to hubs like Colombo, Salalah and Jebel Ali and are later transported to different Indian destinations. Indian vessels are considered too expensive and far fewer in number.

The Indian shipping bounce....

Indian ports could gain up to $150 million in revenue per year if the rules are relaxed, according to a study done by Container Shipping Lines Association (CSLA). The same study said India is losing $100 million in freight charges as cargo is shipped to international transshipment hubs.

Gujarat Pipavav is also keen to become a transshipment port if cabotage rules are relaxed. Gujarat Pipavav is currently expanding its capacity to 1.5 million TEU from 0.85 million TEUs.

"The relaxation in cabotage will allow us to fill this additional capacity quickly and look at further expansion if the volumes justify it," said Prakash Tulsiani, managing director at APM Terminals Pipavav. He expects an addition of 1,20,000 TEU in volumes in the first year of relaxation to the current throughput of 6,00,000 TEUs.[/b]

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