Carriers set new services for growing Indian subcontinent trade


Growing South Asian exports has led to the rolling out of new
services by container lines confident that rising volume will
continue to be generated by the subcontinent''s powerhouses India and
Pakistan.

Westbound volume rose 3.4 percent year over year from January through
April, according to Drewry and based on the latest data from
Container Trades Statistics. While this is lower than the 2016 growth
of almost 5 percent, rising container volume is expected to continue.

“Future growth seems assured as consumer demand remains high in
India, while Pakistan stands to be one of the major beneficiaries of
Chinese One Belt, One Road investment,” Drewry noted.

Container volumes at India’s major or public ports increased 8.2
percent year over year in the first two months of fiscal 2017 and
2018. The country’s 12 major ports together handled 1.5 million TEU
during April and May, compared with 1.4 million TEU in the
corresponding months last year, according to port statistics analyzed
by JOC.com.

This growth is attracting new services from the carriers. From the
end of June, Hyundai Merchant Marine, CMA CGM, Shipping Corp. of
India, and Korea Marine Transport Co. and Pendulum Express Lines will
launch the China West India Express (CWI) service. Drewry said the
new loop will reportedly use six 4,600 TEU vessels — two from HMM and
one each from the other service partners — on a rotation of Xingang,
Qingdao, Ningbo, Singapore, Port Klang, Nhava Sheva, Mundra, Hazira,
Colombo, Port Klang, Singapore, and back to Xingang.

Over the past year, Singapore-based APL has introduced three new
services into the India market. The India-Pakistan-Mediterranean
(IPM) service, the India East Coast Express (IEX) service that
directly connects the North Asia markets of Korea and China with the
Indian port of Chennai, and the India-Pakistan-Europe service, which
directly links the key South Asian markets of India and Pakistan to
major ports in Europe.

The weekly service connecting India and Pakistan with the
Mediterranean will be launched by APL, CMA CGM, and Cosco as the
carriers broaden their Indian subcontinent routings. The first
sailing will leave Karachi in Pakistan on July 2 with an additional
12 ports in the rotation — Khor Fakkan, Karachi, Nhava Sheva, Mundra,
Djibouti, Jeddah, Damietta, Piraeus, Malta, Aliaga, Mersin, and Port
Said West.

“With its strategic port rotation that serves the major
transshipment hubs of Malta, Damietta, Piraeus, Nhava Sheva, and
Mundra, shippers can tap on APL’s global network at these relay
ports for further connectivity into vast key European, Asia, and the
US East Coast markets,” said Eric Eng, APL head of Asia-Europe
trade.

The service will use five vessels of 4,250 TEU, although the ships to
be deployed have not yet been identified.

An APL spokesman said based on economic indicators, India was
expected to maintain a trade growth between 6 percent and 7 percent
in 2017 from the previous year, and as an agrarian economy, a good
monsoon season in the second half of 2017 would increase growth even
further.

“In particular, industry experts predict outbound growth with the
US, Asia, Africa, Europe, and Mediterranean regions, given demand for
its manufactured goods including agricultural products, garments and
textiles, handicrafts, automobile parts, chemicals, as well as
construction materials such as granite, marble, and steel. Inbound
growth is expected to concentrate from Asia with strong imports of
electronic goods, automobile parts, and chemicals,” the spokesman
told JOC.com.

According to the 2017 Agility Emerging Markets Logistics Index, more
than 800 representatives of logistics corporations from around the
globe classified India as the most attractive market with the
greatest opportunities for growth.

“Sales of logistics services in India reached a figure that was the
equivalent of $320 billion in 2016. This means that its share of GDP
was 14 percent, while the average figure in industrial nations is 8
percent,” said Thomas Hundt, director of Germany Trade and Invest in
India. “Market researchers are also forecasting strong growth in all
segments in the Indian transport and logistics sector.”

Container shipping analyst SeaIntel said the trade lanes to and from
South Asia gained a lot of attention in recent years. India, Sri
Lanka, and Pakistan saw considerable growth in production as
companies expand manufacturing in these countries as an alternative
to China, where coastal labour costs have been increasing sharply.

The analyst said the average vessel size on the trade had increased
consistently as ships cascaded down from the oversupplied East-West
trades. Average weekly deployed capacity rose significantly from July
2014, as the carriers injected a massive amount of tonnage.

However, SeaIntel noted that while the average vessel size has
increased, the number of active services decreased throughout the
period in order for the carriers to balance out the capacity
injection that would otherwise have happened.

“While most of the analysed trade lanes showed a rather stable level
of capacity deployed, we observed an interesting development in the
trade lane connecting Asia to the Indian subcontinent. Here, carriers
have injected considerable amounts of capacity in recent years, but
we do see a more controlled approach in recent months, as three
services have been closed or merged in 2017, so we are no longer
seeing capacity growth rates of 15 percent to 20 percent year over
year and for the coming 12 months, weekly capacity will actually
contract by 6.2 percent,” the analyst predicted.