News / MSC launches more services as new markets emerge in India

Photo: VesselFinder

MSC is opening secondary port calls in India to be closer to shippers in potential new markets further into the interior, as manufacturing verticals drive growth for the country’s economy.

The carrier has launched a container feeder shuttle service between Paradip, in India’s eastern state of Odisha, and Sri Lanka’s Colombo port.  Last week’s sailing of the MSC Tiger F  could be the start of what could become a major boom for trade out of the largely untapped region, said MSC.

The first call involved some 130 teu of exports for shippers Vedanta Aluminium and Jindal Stainless.

The port said the carrier planned three calls a month on the Paradip-Colombo route.

Vessel-related charges – port dues, berth hire and pilotage fees – have been drastically subsidised by the Paradip port authority to induce container lines to “test the water” and make calls commercially and operationally viable there.

“The port is offering an unparalleled discount of 75% to interested container liners, and no scanning charges, to boost container cargo,” said port chairman PL Haranadh. “Henceforth, prospective clients from Odisha will no longer be dependent on ports outside the state.” 

And Thailand-based intra-Asia carrier Regional Container Lines (RCL) will be next in line to add a container service out of Paradip, connecting to Port Klang.

An additional sweetener for containership calls at Paradip stems from the Odisha government’s offer to compensate ship operators in the form of viability gap funding (VGF), touted as a first by any port in India.

“The government will pay $200 per teu as VGF if the export/import volume during a ship call at Paradip falls below the minimum guaranteed level of 250 teu,” the statement noted.

Dry and liquid bulk trades have been the core business for Paradip, making it a leader in that segment, reporting record cargo throughput of 135.36m tonnes in fiscal year 2022-23, up 16.5% year on year, according to data.

But following a concession deal with Mumbai-based JM Baxi Group for the operation of a multipurpose cargo terminal, PICT, a few years ago, the port has broadened its cargo mix, with containerised trade potential pegged at some 200,000 teu a year.

The emerging Odisha market is also drawing interest from other terminal operators. PSA Mumbai at Nhava Sheva port recently set up a logistics arrangement to field regular container trains to connect cargo from Odisha’s hinterlands.  

“This new collaboration, spanning over 1,600 km, marks one of the longest-distance inland connections for PSA Mumbai,” it said.

New Delhi is aggressively pushing large-scale industrial and electronics production lines to capitalise on rising trade diversification trends in Asia, as the “China-plus-one” sourcing model advances.  This promises headhaul cargo expansion for ocean carriers serving Indian trades through direct calls and/or cargo aggregation for transhipment.

MSC has an integrator approach to consolidating its operations in India, with terminal interests at three key port locations – Mundra, Tuticorin and Ennore.