Market share losses suffered by Chennai’s container terminals on India’s east coast appears to be worsening as competitor Adani Group is understood to have been aggressively targeting carrier customers with “joining bonuses” for switching to its facilities.

The latest blow for Chennai – and arguably the biggest – comes from an impending port call change announced by the IEX (South India-Europe) service, which was the first direct connection from the Indian east coast to Europe when it launched in 2019.

The weekly IEX will be switching calls from DP World Chennai to Adani’s Kattupalli port from early December, a move that has been confirmed a the eeSea liner database.

“It’s all about an upfront joining bonus offer,” a Chennai terminal official told The Loadstar, explaining growing competitive dynamics.

“Chennai is cheaper for port call tariffs like VRC (vessel-related charges), with a window for additional volume-based discounts, while THC (terminal handling charges) rates remain the same across ports,” the source noted.  “Still, it’s a difficult game.”

According to sources, BOT [build-operate-transfer] operators at Chennai are unable to match or counter the sweeteners that Adani-operated terminals have used to poach liner customers.

“The joining bonus package gives carriers some free calls,” said sources. “We made every effort to retain IEX but were outplayed.”

Additionally, HMM recently began calling on Kattupalli via its extended Far East-Mediterranean FIM service that also offers calls in India, Pakistan and the Middle East, while a call on a joint Europe-Oceania between service operated by MSC and CMA CGM is the latest addition to Adani’s Ennore Terminal, located just a few kilometres north of Chennai..

IEX is a nine-vessel service operated under a vessel sharing agreement and led by Hapag-Lloyd, with Cosco, YML, ONE and OOCL as junior vessel partners.  Vessels are of 8,000 teu capacity, on average.

The updated port rotation will be Rotterdam-London Gateway-Hamburg-Antwerp-Le Havre-Damietta-Jeddah-Colombo-Visakhaptnam-Krishnapatam-Kattupalli-Cochin-Damietta-Piraeus-Rotterdam.

A planned 4 December call by the YM Fountain will mark the Kattupalli rotation start.

IEX has significant cargo lifts out of Chennai, which sources put at some 5,000 teu per call (exports/imports) — aggregating to approximately 20,000-25,000 teu a month.

According to some estimates, that’s about 40% of DP World Chennai’s current monthly throughput.

To put that in perspective, of the 148,391 teu shipped in/out of Chennai last month, PSA Chennai accounted for 83,152 teu, while DP World Chennai contributed 65,239 teu, according to port data.

The market had been equally divided between Chennai, Kattupalli and Ennore, but Adani’s aggressive marketing approach is tilting the playing field.

And as that trend gathers pace, Chennai port’s business is appeared to be confined to Far East and Middle East calls, at least for the immediate future.

However, carriers moving away from Chennai boast productivity differentiation as the chief driving factor.

“Kattupalli Port, situated approximately 30km north of Chennai, offers a prime location with minimal traffic congestion, ensuring swift turnaround times,” said Hapag-Lloyd.

“With a substantial crane capacity of up to 75 tonnes, along with dedicated gate lanes, the port provides efficient infrastructure and capabilities for specialised cargo operations,” it noted.

On the other hand, pro-Chennai sources argued that Kattupalli lacks adequate rail links for ICD [inland container depot] cargo and also shares highway access with Ennore, meaning limited hinterland market penetration and road congestion risks as volumes swell.

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