Porting Ahead

Expected increase in containerisation, new ICDs and CFSs, expansion plans of major and medium-sized ports will push the demand for port equipment.
The government has announced a massive investment in India´s ports sector, which is likely to boost the country´s economy. The government has massive plans of developing ten coastal economic regions by reviving the country´s Sagarmala (string of ports) Project. The zones would be converted into manufacturing hubs, supported by the port modernisation projects, and could span 300-500 kilometres of the coastline. The government´s intention of developing the inland waterways sector as an alternative to road and rail routes for smooth movement of cargo to the ports is likely to induce private investments in the sector. The Planning Commission forecasts an investment of Rs 180,626 crore (USD 28.6 billion) for this industry in its 12th Five Year Plan. In addition, Maritime Agenda 2010-2020,has envisaged the capacity augmentation of over 3,130 MMT by 2020, which will drive the participation from the private sector. Non-major ports are expected to generate over 50 per cent of this capacity.

With all these giant projects in the pipeline, there is a need for state-of-the-art port equipment in order to fulfill the need of upcoming ports and inland waterways. Apart from this, increasing investments and cargo traffic point to a healthy outlook for India´s ports sector. Cargo traffic, which was 976 million metric tonne (MMT) in 2012, is expected to reach 1,758 MMT by 2017. The Indian ports sector received FDI worth US$ 1,637.30 million in the period April 2000ûNovember 2014. The number of containers handled at major ports in India increased by 8.32 per cent.

Opportunities
Major shipping lines realise economies of scale by deploying larger vessels in operation. Vessel sizes are growing rapidly and container vessels with capacities over 20,000 TEU (Twenty Equivalent Units) have become today´s trend. As these giant vessels with lengths around 400 metres are crossing the oceans, smaller ships are substituted. In general, larger vessel capacity reduces the freight rate and also emissions per container; increasing competitiveness. For that reason, shipping lines tend to go for bigger ships. Moreover, they are keen on cascading down the ships that were once used in the main routes, meaning small ships are replaced by larger ships in all trade routes. As a result, many ports have to amend their infrastructure and equipment in order to handle these capsize vessels. This includes dredging, enlarging berth boxes, and investing in new cargo handling solutions. While ports on the main routes gear up for new mega ships, the other ports adapt their facilities for cascaded vessels. One option is to upgrade existing equipment with new technologies, which can boost productivity. Another approach is to invest in highly-modern equipment which allows for more performance than the existing cranes.

Having huge potential for transportation of cargo through waterways the port industry will witness usage of large size handling equipment and sophisticated automation for enhancing the productivity of ports.

According to Sanjay Wadnerkar, Vice President, LiuGong India, the trend seems positive for wheel loaders in ports; a lot of opportunities are opening up in material handling at ports, and also handling of bulk cargoes such as coal, minerals and agricultural products at ports. This will increase the demand for wheel loaders. He adds,´Sany is providing the total solutions for port and CFS operation through its large range of port equipment like reachstackers, empty container handlers, port mobile cranes, RTGs, and ship to shore cranes. Sanjay Saxena, Business Unit Head – Heavy Equipments, Sany Heavy Industry India says, ´We have already launched our state of art reachstackers in India. We also foresee a good growth in demand in our range of products specially reachstackers and RTGs.´

´Definitely the port industry has a better future. More ports are expected in India. The technology is playing a major role in this. Advanced equipment, systems with better safety options are in vogue. Advanced quality and cost effective systems are becoming the norm,´says Arvind Gadge, Director, AR Crystal-tech Solutions. According to Saxena, Indian ports have seen an all time low traffic during the last few years, which has resulted in idling of equipment and facilities with low utilisation level. He says, ´Containerised traffic has seen a decline of about 4.32 per cent between April 2013 and March 2014. Similarly, sea-borne traffic of various commodities like iron ore, fertilisers and liquid commodities has also seen a decline in this period. However, we are bullish on growth of this segment in the coming years- increased focus on segments like oil and gas, projects like dedicated freight corridors, thermal and coking coal, iron ore, etc., will definitely push the cargo handling in the port sector.´

Saxena adds, ´Trends of technology in this sector are focussing on better human and electronic interface, highest level of safety, advanced protection systems, intelligent control system, maintenance and fault diagnosis system, etc. Sany is providing advance state of the art control and diagnosis system, movable counter weight for better stability, advanced safety features, and superior operational speeds for better productivity and efficiency.

Sunil Kalra, Divisional Manager- Maritime Cranes, Liebherr India, says, ´The mobile harbour crane sector is a very innovative one. New technologies are introduced to the market on a regular basis. In June 2014, Liebherr introduced SmartGrip for its mobile harbour crane range. This unique technology operates as an intelligent system which optimises grab filling rates in a self-learning manner. SmartGrip provides a number of valuable advantages, including higher performance and zero overloads. Today, cranes across the globe are already equipped with this game-changing technology. SmartGrip is the continuation of a history full of innovative technologies, including Pactronic and Sycratronic. In our opinion, innovation will also be a key success factor in the upcoming years.´

Liebherr Maritime Cranes offer a comprehensive range of port equipment like harbour cranes on mobile, rail-linked and on barges, floating cranes, fixed cranes on jetty, ship to shore cranes, RTGs and stackers enable efficient freight transportation with state-of-the-art technology. In addition, ship and offshore cranes, professional simulation-based training solutions, and a well-structured global service network complete the maritime portfolio. The company has recently introduced several new products to the market over the last few months, including the world´s largest mobile harbour crane LHM 800 and a new reachstacker model LRS 545.

Sivasubramanian Natarajan, Managing Director, ThyssenKrupp Industries India Pvt. Ltd, in his earlier interaction with IT, had said, ´ThyssenKrupp is fully equipped with the latest technology offerings for handling bulk material at the ports. Some of our port technology equipment includes ship loaders, ship unloaders, belt conveyors, pipe conveyors, stackers, reclaimers, etc. We also offer turnkey solutions in ports, where we take complete responsibility of design, supply, erection, and commissioning of various material handling equipment.´

Based in Germany, ThyssenKrupp has an R&D set-up which is working on several productivity solutions for ports. ´We have complete access to all those solutions and are in a position offer to Indian ports on a continuous basis. We don´t need any additional collaboration with any other foreign company. One such technology product is the continuous ship unloader that has the capability of evacuating the entire load of a ship in the shortest time span with the least amount of spillage,´ he adds.

Natarajan points out, ´The port sector needs to overcome major obstacles in land acquisition, environmental clearances, etc., to set up world-class facilities.´He further says, ´Indian ports need to modernise in order to reduce the waiting time for the ships calling Indian ports. India needs to develop more modern port facilities with higher handling capacities. The ports need better road or rail infrastructure connectivity for smooth transportation of material and equipment to the final destination.´

Tax Policies
The majority of the state-of-the- art port equipment is imported as these world class equipment are not manufactured in India. Over the last few years the tax policies for import of such types of equipment are more or less same without complexities, except negligible changes in the import duty percentage.

Natarajan opines, ´The tax concessions for equipment purchases should be extended to ports like the manufacturing sectors. Besides that, the frequently changing tax structure is not good for the industry. It is essential to have a long-term tax structure (at least for 10 or 15 years) so that the investors will also get the opportunity for making prudent investments in the sector.´

´R&D plays a key role in developing the port sector in India for scaling up the capacity and modernisation, where manufacturers can bring world class equipment and technology to the Indian port sector,´he adds.

Karla remarks, ´The existing tax policy is not favourable and are quite complicated. Under warranty support, the parts are supplied as free of cost, even though it attracts certain taxes which are increasing unnecessary costs for the end users and manufacturers.´

Saxena points out, ´The Railway Budget as well as the Union Budget are very encouraging to the port sector and proposed corporatisation of ports is a welcome step. The government is focussing on large investments, for instance, Rs 11,635 crore allocated for the development of the Outer Harbour Project in Tuticorin for phase I, 16 new port projects announced, and SEZ at Kandla and JNPT will definitely give a boost to the demand of port equipment. Even the Inland Waterways Project on Ganges will encourage transportation through rivers.´

Saxena sums up on a positive note. ´We expect CAGR of approximately 10-15 per cent in the coming four-five years. Growth prospects are very encouraging and the expected increase in containerisation, new ICDs and CFSs, expansion plans of major and medium-sized ports will push the demand for container handling equipment like reach stackers, RTGs, STS, port cranes, heavy duty forklifts, etc.´

Conclusion
Despite the support to the sector, the industry feels the government should expedite solutions like:
Up to 100 per cent FDI allowed under the automatic route for port development projects
Income tax incentives allowed as per Income Tax Act, 1961
Streamlining the security clearance