CEIC India Data Talk: The gap between the cargo traffic handled by major ports (i.e., government-owned ports) and minor ports is narrowing, with major ports’ share of cargo traffic shrinking while minor ports’ share of cargo traffic grew accordingly. In fiscal year 1998, major ports handled around 90% of India’s total cargo traffic, leaving about 10% handled by minor ports. However, the cargo traffic handled by minor ports has trended upward since 1998. Over the last 12 years, the major ports’ share of cargo traffic has dropped to approximately 65% while minor ports’ share has increased dramatically to nearly 35%. These changing trends were the result of increasing private participation in establishing minor ports.
Cargo Traffic Handled in India
Chart provided by: CEIC Data
Cargo traffic handled by the major ports grew by just 1.6% in 2010-2011, reaching 569.9 million tons. Annual growth of cargo traffic at major ports was similarly unimpressive over the past decade, with growth fluctuating between 2% and 12%. In contrast, cargo traffic handled by minor ports grew at 35.5% during fiscal year 2009-2010 (during the same period, major ports experienced 5.8% growth). With this growth, the share of total cargo traffic handled by minor ports increased to 34% in 2009-2010 from 28.7% in the previous fiscal year.
The phenomenal rise of these minor ports has adversely affected the growth rate of major ports as cargoes are increasingly diverted to newer and more efficient minor ports mushrooming in many coastal states. According to the managing director of the Indian Ports Association (IPA), Mr. Janardhana Rao, new ports have deeper drafts (depths) allowing bigger ships to dock. These new ports are also equipped with the latest mechanised cargo-handling facilities, which offer higher efficiency and better productivity, saving both time and costs for shippers.
While minor ports have been criticised for their high port charges, sometimes double the standard fees charged at major ports, port statistics imply that shippers are willing to pay these premium charges in return for more efficient services offered by these minor ports. Indeed, barring government intervention or any significant changes in efficiency, present trends suggest that minor ports will eventually take up the lion’s share of cargo traffic.