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India Freight Transport Report Q1 2012
Business Monitor International, Jan 2012, Pages: 68
India Freight Transport Report provides industry professionals and strategists, corporate analysts, freight transportation associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on India's freight transportation industry.
India's economy and trade continues to expand rapidly. BMI expects this growth to slow, but the expansion will remain considerable over our forecast period. The volumes of dry bulk and containers being processed at the country's facilities are causing congestion at the ageing state-owned ports. This is leading to a raft of new private facilities being established all over the country.
These new ports are benefiting from increased inter-modal links with India's considerable rail network.
Rail operators have been introducing new services connecting to ports over the past quarter.
Headline Industry Data
- 2011/12 Port of Kandla tonnage throughput growth forecast is 2.2% and is projected to average 8.0% a year to 2016.
- 2012 rail freight tonnes-km growth forecast is 5.5% and is projected to average 6.5% to 2016.
- 2012 air freight tonnes growth forecast is 7.1% and is forecast to average 7.4% to 2016.
- 2012 total trade real growth forecast at 7.0%, and to average 9.3% to 2015.
Key Industry Trends
DHL To Make Regular Bangalore Stop
Germany-based DHL is to offer regular connections between Leipzig and Bangalore, according to reports in October 2011. The company will use a 777 freighter to operate a service to the south Indian city five times a week. The stops will be made on existing flights between Leipzig and Singapore or Bangkok.
Dedicated Freight Corridors Move Forward As Loan Agreement Signed
On October 27 2011 the World Bank signed a loan pact of US$975mn to support the Indian government's Eastern Dedicated Freight Corridor project, designed to reduce some of the congestion and bottlenecks currently affecting the country's rail network. BMI notes that this, in addition to the US$500mn awarded by the Asian Development Bank in September and the increasing use of double-stacked container trains, is crucial to India's rail infrastructure if it is to keep pace with the rapid expansion of demand.
Private Krishnapatnam Port Set To Become East Coast's Largest Container Facility
The inexorable rise of India's private ports continues as the Krishnapatnam Port Company (KPC) has announced plans to establish a container terminal capable of handling 3mn twenty-foot equivalent units (TEUs). BMI notes that this would make the port, which already has a sizeable total tonnage throughput, the largest container port on India's east coast.
Key Risks To Outlook
The key risk to our throughput forecasts for India's freight transport sector is if infrastructure investment does not manage to keep pace with the country's economic growth. In the ports sector we have seen congestion at two major ports during the quarter: JNPT and Chennai.
There are downside growth risks from spiralling inflation. Should food prices and oil prices maintain their upward march, there is a risk that we could see additional monetary tightening, which would surely come at the expense of headline economic growth. This would have a negative effect on throughput at the country's ports.
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