News / Overcrowded Vizhinjam means a welcome traffic boost for rival Vallarpadam

Credit: DP World Cochin

A spillover of traffic from full-capacity Vizhinjam port in southern India is driving volume gains for rival DP World Cochin, better known as Vallarpadam Terminal.

Vallarpadam has had an uptick this month due to a flurry of ad-hoc calls from MSC, amid growing demand for regional container relays in the wake of Asian cargo surges.

According to available data, MSC has fielded eight ship calls at Vallarpadam, including mainline temporary visits and feeder calls, since 18 June, including the MSC Michela, deployed on the carrier’s Carioca service between Asia and South America east coast.

The transhipment shift follows MSC’s rapid expansion of operations at Adani Group-operated Vizhinjam, just 180 nautical miles away – “already operating at maximum capacity”, one Adani Ports source told The Loadstar.

“Our yards are also full.”

Vizhinjam only began commercial operations at the end of last year, and it is already handling more than 100,000 teu a month, against a phase-one annual capacity of 1m teu.

That capacity-fill is proving to be a “needed windfall” for the Dubai-based operator, as Vallarpadam had seen a noticeable drop in transhipment volumes in recent months, down to some 8,000 teu during April-May from around 25,000 teu year on year.

With Vizhinjam opening, India’s container hub development strategy clearly shifted from Vallarpadam, a project designed and launched with much fanfare in 2011.

One major factor affecting Vallarpadam is its high tariffs – being government-controlled – along with a lower draught than Vizhinjam.  In contrast, Vizhinjam enjoys commercial price flexibility due to its structural difference (minor port category) and concessionaire Adani’s strong carrier relationships.

The group has cemented its market position in the region — recently opening a new container terminal at Colombo, in Sri Lanka.

With competition pressure building around it, the second phase of expansion at Vallarpadam, to increase capacity to 3m teu and 5.5m teu in stages, seems to be in limbo.

For fiscal year 2024-25, Vallarpadam saw some 170,000 teu of transhipment cargo, out of a total 835,000 teu, up 11% year on year, according to available data.  During the year, DP World also invested in new harbour cranes and yard expansion, to increase capacity to 1.4m teu, to fend off any loss of cargo due to infrastructure constraints.

“Along with capacity expansion, we were able to bring in new solutions like the free-trade warehousing zone to support the growth ambitions of the regional export/import and coastal trade,” said DP World Cochin CEO Praveen Joseph.

“We will continue to focus on ease of doing business, fast delivery times, high productivity and sustainability to benefit the trade,” he added.

Vizhinjam and Cochin ports have also grabbed the headlines in the past few weeks with the sinking of the MSC Elsa 3 along the coastline on 24 May.  MSC has also faced Indian legal pressure, forcing it to provide security deposits for the release of sister vessels ordered to be detained by the local high court.