- Introduction
- SWOT Analysis
- Recent Developments at Vizhinjam port
- Predictable actions to boost the growth of Vizhinjam port in near future
- Future activities in pipeline – for the port.
- Conclusion
I. Introduction
Recently Vizhinjam port has been in news and in this blog we will do a brief SWOT analysis of this port and discuss other details.
Vizhinjam port is located in Thiruvananthapuram, Kerala, India. Its an all weather port and has recently started its operations on trial basis. In course of time, one day this port can be world’s biggest transhipment port due to its strategic geographical location. It’s the only Indian port so near to the International maritime route and with high natural draft of about 20 meters.
Since long discussion were going on to develop this port. Around 2013 the biding was done in which Adani port and SEZ was finalized. In 2017 Cyclone Okchi wreaked havoc on the region leading to delay in construction. On 11 July 2024, the first container mothership “San Fernando” was received by the port.
The port will work on landlord model which has Public Private Partnership component on a DBFOT basis (design, build, finance, operate and transfer).
It’s a state-owned port, its owned by government of Kerala and will be operated by Adani Group for next 40 years.
Once completed the port will be used by passengers, containers & Shipping lines for carrying cargo.
II. SWOT Analysis (STRENTH, WEAKNESS, OPPORTUNITIES, THREAT)
STRENGTH
1. Location – The Port is only 10 nautical miles away from the international maritime route which connects East to West.
2. Natural draft – It has natural deep draft of approx. 20 meters, that does not need any capital expenditure for dredging and is deeper than any other Indian port at present.
3.Curviliner coast – Since the coast is curvilinear in shape, it would not get much impact from Tsunami. The cyclone can impact the nearby location but the impact on port will be comparatively less.
4.Road connectivity – The port is 8 Km away from National Highway – 66. Also National highway 47 and 44 are in near proximity.
5.Past experience of Adani Group – Adani Group had already got good experience of handling Mundra Port and has the Caliber to grow the port.
WEAKNESS
1.Timeliness to set up a port – Its takes some time for a new business to create a base of customer for the port, it can be delayed until the port acts swiftly.
2.There are two Indian ports in proximity.
3. LPI (Logistics Performance Index) – As per LPI ranking done by World bank in 2023 for total 149 countries – India ranks 38 , Sri Lanka ranks 73, Singapore ranks 1. Due to this it would be tough to compete with Singapore as many Shipping Lines look over different parameters before selecting a transhipment port. (LPI ranking is done on basis of 6 parameters in which India has significantly improved on 4 parameters.)
OPPORTUNITIES
1. Predictable transhipment port for All India originating cargo – if we see specifically the cargo originating only from India then presently Colombo, Dubai & Singapore are major transhipment port for most of it. In future Indian government can make a rule or give subsidy for using Indian transhipment port for exporters/shipping line, this can be a big game changer.
2. Competitor transhipment ports are having tough times.
If we see nearby major transhipment port we see them facing below challenges after Red Sea crisis
a. Singapore – In recent month the vessel waiting time was approx. 5 to 7 days , there has been huge disruption in maritime supply chain due to Red Sea Challenge and shipping lines are looking for different options.
b. Colombo – Due to political unrest to country is facing issues, there has been labour issues in past at port, In any case for sudden closure even for few days most of lines can move to Vizhinjam port. In the maritime line once a route or transhipment port is fixed, its not changed for years until an urgent demand.
3. Adani Group is already in Collaboration with MSC and CMA shipping lines, this can be beneficial for turning the vessels to Vizhinjam port.
THREAT
1. Maintain reliability – Even if its selected by major shipping lines, its needs to have reliability in service on regular basis else shipping lines can move to other ports. For Example – IN 2012 – Italian port Gioio Tauro saw a major drop in vessel berthing after withdrawal of Maersk Line.
2. Sudden rate reduction by Colombo / Singapore port. – it might be the need of hour for them to defend their share of business.
III. Recent Developments at Vizhinjam port
Since July 2024 the ports operation is under trial run and phase 1 is expected to be completely operational by 2024.
On 13th Sept 2024, the port received the biggest vessel which evert berthed at an Indian Port – MSC Claude Girardet. Its a large vessel with a capacity of carrying 24 K containers. The draft requirement of this vessel is 16.7 meters, its length is approx. 400 meters, width is approx. 61.5 meters. The size is slightly bigger than 4 Standard soccer field – this gives her the capacity to carry 240,000 MT cargo. Though it was called to reposition containers to maintain the balance but it’s a good news for port.
Below is the plan for for Phase 1 and 2.
Phases | Expected closure by | Capacity |
Phase 1 | Dec-24 | 1 million TEU |
Phase 2 | 2028 | 6.2 million TEU |
Update for future phases will be given later.
IV. Predictable actions to boost the growth of Vizhinjam port in near future
1. Rate competitiveness – Adani group can give rebates to shipping line, with lower cost for transhipment per container and lower container holding charges are port.
It should be lower than the competitor ports in the beginning to get the chance to start the business.
2. Push by Indian government – It’s a mandatory rule for cargo originating country to share some data of cargo with the transhipment port which includes cargo weight/selling price/origin/destination etc. which is significant for safety of complete exports economy. Thus in order to have a check on outflow of such data, Indian government can try in future to divert all the cargo via transhipment at Vizhinjam port.
V. Future activities in pipeline – for the port.
- The sea port will be connected to India’s third largest railway tunnel by 2028.
- Cruise berth – Its in plan to provide berthing for Cruise ships – It would provide a tour to tourist to different locations in Kerala including beaches, temples, historical destinations etc.
- Crew Change operations- Being near by 10 nautical miles to international trade route, it can be good location to change crew, also its just 15 km to Thiruvananthapuram International Airport.
- Bunkering- Its in the master plan, and once the port is completely operational it will be having space for Liquid storage.
VI. Conclusion
Infrastructure is on one of the strongest pillar of economic development and this port can be a pivotal step for India’s growth in maritime sector.
India is going strong on its logistics infrastructure and India has a lot more to achieve in maritime industry with a coastline of 7500 KM. Vizhinjam port has the capacity to create a maritime ecosystem which can be a game changer for India.