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Elevated export flow reconfigures traditional Indian containerized trade patterns

Out of 913,492 TEU shipped in and out of India’s 12 major government ports last month, exports stood at 439,302 TEU and imports at 442,028 TEU, with the remainder coming from transshipment loads. Photo credit: PSA Mumbai.

While Indian port volumes have, undeniably, rebounded sharply beginning in late 2020 after crashing at the height of initial COVID-19 lockdowns, an analysis of the latest countrywide port data yields one obvious fact: Indian containerized exports have now equaled containerized imports.

Historically, Indian containerized inbound volumes have exceeded containerized outflows by a quantifiable margin, creating headhaul-backhaul trade imbalances.

To put that key takeaway in perspective, out of a total 913,492 TEU shipped in and out of 12 major government ports last month, exports stood at 439,302 TEU and imports at 442,028 TEU, with the remainder (32,162 TEU) coming from transshipment loads. The February 2021 figures were: 926,893 TEU, 443,707 TEU, 453,888 TEU, and 29,298 TEU, respectively.

Extrapolating that data by port, Jawaharlal Nehru Port Trust (JNPT) — the busiest among India’s major ports — saw even more balanced cargo flow last month, with exports at 230,740 TEU, imports at 229,983 TEU, and transshipment at 8,694 TEU, out of a total 469,417 TEU. The relative numbers for February 2021 were: 222,823 TEU, 231,486 TEU, 7,552 TEU, and 461,861 TEU.

From the carriers’ standpoint, economies of scale only work when the space allocations for a ship fill up in tandem with its stowage plans, which commonly only happens on headhaul trades at peak periods. As such, that evolving trend out of India is a strong tailwind for carriers facing extra costs to reposition empties to meet the market demand.

Shift began in late 2020

Sunil Vaswani, executive director of the Container Shipping Lines Association (India), told JOC.com that Indian trade patterns favoring exports became evident in the second half of 2020, powered in large part by demand from consumers in the US and Europe. He also noted that carriers made every effort necessary to support the accelerated pace of Indian exports.

“The shipping lines repositioned empty containers into the country at a huge cost to help provide additional equipment for exports, which continues into 2022 as well,” Vaswani said. “The lines also introduced new services, significantly increasing the weekly capacity from India.”

Amplifying that viewpoint, Vaswani said Indian containerized exports hit 6.65 million TEU in 2021, an 18 percent gain over 2020 and a 14 percent rise over pre-pandemic 2019.

Indian exports by value are on track to exceed the targeted $400 billion in fiscal year 2021-22 due to end March 31, with April-February volumes accounting for $374.05 billion. However, soaring freight rate levels and capacity shortages continue to be at the center of pain points for Indian exporters savoring the fruits of elevated demand.