News / Chennai losing out to private terminals as Indian east coast trade grows

Chennai port: Photo © Manivannan Thirugnanasambandam

Container carriers have opened a flurry of new connections out of Indian east coast ports to capitalise on the resurgent manufacturing development in the region, thanks to trade diversification.

But the network push has yielded one glaring trend: more calls at new private terminals operated by Adani Group instead of going to Chennai, which has long been the focal point of the east coast corridor.

CMA CGM recently began offering direct sailings for North Europe by adding a call at Adani’s Ennore Terminal to its Nemo service, bringing increased competition in the market.

The service rotates Ennore, Colombo, Malta, Valencia, London Gateway, Rotterdam, Hamburg, Antwerp, Le Havre, Fos Sur Mer, La Spezia, Malta, Pointe Des Galets, Port Louis, Sydney, Melbourne, Adelaide, Singapore and back to Ennore – offering 17 days to Malta, 22 days to Valencia and 29 days to London Gateway from Ennore.

Just 15 miles north of Chennai, Ennore has better highway connectivity to move cargo trucks in and out of terminals, while Kattupalli is a multipurpose harbour close to the Chennai coastline, offering direct trucking and intermodal systems.  Adani acquired the pre-built port infrastructure in 2015.

The Nemo call is a big win for Ennore, after Maersk took the plunge there two years ago for a direct offering to Europe with an eye on growing automobile export trade out of Chennai.

HMM, meanwhile, has demonstrated ample signals to use Kattupalli port as a hub for its Indian network. In addition to its premier East Asia-Latin America string (FIL), the South Korean carrier last month extended its intra-Asia loop with a stop at Kattupalli, to connect Indian cargo to the Mediterranean.

“Shipments between the Far East and south India have substantially grown,” a Chennai-based liner industry representative told The Loadstar.  “More notably, carriers like HMM are using Kattupalli as a transhipment hub.”

Freight forwarders in Chennai sounded upbeat about the multiple sailing options available at present. One said: “The competition has created shipment predictability and transit time advantages.”

Chennai Port – featuring DP World’s CCTPL and PSA’s CITPL terminals – has inherent infrastructure bottlenecks, particularly on the land side.  As a result, crane productivity rates and the pace of cargo flow have been a concern for carriers. With more modern and sophisticated terminal infrastructure and flexible tariff advantages, emerging alternative terminals have been able to attract volumes that had traditionally moved via Chennai.

“The market challenges are formidable,” a Chennai port official noted.

According to industry data, Chennai (CCTPL/CITPL) saw 371,314 teu in fiscal Q1 (April-June), versus a combined 330,554 teu at Ennore and Kattupalli.  A year earlier, the figures were 363,200 teu and 322,008 teu respectively, with the overall trade in the market growing.

The trend of carriers introducing new services or enhancing existing loops out of the Chennai region is expected to continue as the market expands, driving further gains for new cargo handlers.

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