Global terminal operator DP World is said to have invested about US$600 million in the Cochin terminal, better known as Vallarpadam, betting in large part on the vast volume of Indian containerised cargo usually transhipped over Colombo Port in Sri Lanka.
But the decade-long effort produced little measurable transshipment cargo gains for the alternative gateway, a shortcoming DP World attributed to high port charges for mainline operators seeking to add direct calls at Cochin.
That dismal outlook seems to be brightening, thanks to growing ad-hoc ship calls, as carriers increasingly divert ships from Colombo to Cochin to avoid getting caught up in long berthing delays and deteriorating productivity there. Sri Lanka is battling its worst-ever economic crisis, putting supply chains and normal business activity in a dire situation.
Buoyed by those diversions, DP World Cochin saw transshipment volumes – its intended mainstay business – nearly double in the fiscal year 2021-22, which ended on 31 March, from a year earlier, according to new data obtained by Container News.
The terminal handled 156,159 TEU between April 2021 and March 2022, accounting for nearly 22% of its total throughput which totalled 735,577 TEU. It had ended the previous fiscal year (2020-21) with 86,761 TEU, out of 689,697 TEU, respectively, a 12.5% contribution from transhipment activity.
That vessel traffic growth was also helped by port-call cost improvements for mainline operators after Cochin Port proposed special discounts on its normal tariff scale for vessel-related charges in an attempt to better compete with Colombo.
DP World Cochin has also been continually making other pro-trade efforts to grow volumes. Last month, the company opened a dedicated coastal route – named the WEX Service – between Cochin and Kolkata in response to suggestions received from industry representatives for alternative shipping connections.
“We are always sharply focused on providing our customers with the most efficient and cost-effective options at our terminal,” Praveen Joseph, CEO of DP World Cochin, said in a statement. “The direct connection of the new WEX service has given the manufacturers on the east coast of the country a reliable and efficient coastal route for their cargo to reach Cochin directly. This will help enhance trade between the regions and facilitate ease of doing business.”
Located about 300 nautical miles from Colombo, Vallarpadam has a designed capacity to handle 1 million TEU annually under its Phase I development, which began operations in early 2011.
Besides Cochin, DP World has terminal operations in Nhava Sheva, Mundra, Chennai, and Visakhapatnam, commanding some 25% of the total Indian container market.
Jenny Daniel
India correspondent
