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The container terminal at Krishnapatnam Port, operated by Adani Ports and Special Economic Zone Ltd (APSEZ), has not handled any containers for the past few months, indicating a strategic exit from the container business at the port located in Nellore district, Andhra Pradesh.
APSEZ acquired Krishnapatnam Port, the second-largest private port in India, in 2021 for an enterprise value of ?13,675 crores. The terminal had a capacity to handle approximately 1.2 million twenty-foot equivalent units (TEUs) annually. However, a Chennai-based shipping industry executive confirmed that as of February this year, the port officially ceased container operations.
During a politically charged period leading up to the Lok Sabha elections, the terminal briefly handled a few vessels from the Mediterranean Shipping Company, the worlds largest container shipping line. However, those operations were limited to international transhipments, with no containers being moved out for local deliveries.
"APSEZ facilitated a couple of vessels from Mediterranean Shipping Company during April and May, but no shipments have been made. Shippers have turned away from Krishnapatnam for container shipments," the executive said. It was noted that while APSEZ did not formally announce the cessation of container operations, shipping lines gradually withdrew their services from the port.
The shift towards bulk cargo handling reflects APSEZs ability to adapt to changing market conditions. Gateway Distriparks Ltd, which operated one of the two container freight stations (CFS) at the port, is nearing the completion of de-notification, signaling the end of container activities. The other CFS, previously managed by Seabird Marine Services Pvt Ltd, has been acquired by APSEZ.
Krishnapatnam Port had struggled as a container hub due to an imbalance in cargo traffic. The port predominantly exported products like shrimp, granite, quartz, and rice but lacked sufficient imports to sustain container operations, leading to additional costs for shipping lines due to empty container repositioning.
The decision to re-position Krishnapatnam as a bulk cargo port follows APSEZs challenges in expanding its Kattupalli Port near Chennai due to opposition from villagers and environmental groups. Consequently, APSEZ now focuses on handling bulk cargo such as coal and other dry and liquid goods at Krishnapatnam.
Despite ceasing container operations at Krishnapatnam, APSEZ continues to expand its container business at Kattupalli, Kamarajar, and the newly opened Vizhinjam ports. In September, Kattupalli Port handled 75,796 TEUs, capturing a 15% market share among container terminals in South India. Meanwhile, Kamarajar Port and Vizhinjam Port processed 58,414 TEUs and 48,586 TEUs, respectively, securing 12% and 10% of the market share.
In summary, APSEZs transition of Krishnapatnam Port from container to bulk cargo operations underscores a significant strategic shift as the company strengthens its presence in the bulk market while expanding container services at its other ports. |
