Vizhinjam Port has chalked out an ambitious expansion plan | Photo Credit:-
Vizhinjam has risen as a bright and shining star in the horizon of global container shipping in an amazingly short period of time. Commissioned in July 2024, with commercial operations starting from December 2024, the Port has already handled 246 ships and 5,01,847 TEUs (Twenty foot equivalent units) by the end of March 2025.
At this impressive rate Vizhinjam should be able to exceed its installed capacity of one million TEUs by the end of FY26.
Competitive market environment
When Vizhinjam becomes fully operational it has to compete with well established transshipment ports like Dubai and Salalah in the West, Colombo, Singapore and the Port of Tanjung Pelepas in Malaysia in the East.
Dubai is the world’s 9th largest container port with traffic throughput of 15.5 million TEUs — almost 60 per cent of its traffic is transshipment cargo. Salalah in Oman is the 52nd largest container port with a traffic of 3.79 million TEUs — about 85 per cent of its throughput is transshipment cargo.
The nearest is Colombo in Sri Lanka — just 200 nautical miles to the East, is the 27th largest container port with a traffic volume of 7.7 million TEUs — almost 80 per cent is transshipment cargo.
Singapore is the second largest container port in the world handling 41 million TEUs in 2024 — almost 90 per cent is transshipment traffic. Port of Tanjung Pelepas in Malaysia is the 12th largest container port handling 12.2 million TEUs — about 95 per cent of its traffic is transshipment traffic.
These ports are all well established ports having embraced sophisticated and highly efficient handling technology with high productivity and faster turn round of ships.
All these ports have deep draught berths and approach channels capable of accommodating mega containerships drawing draught up to 18-20 m.
Transshipment ports and gateway ports
By the nature of operation, ports are generally categorised as transshipment ports and gateway ports. A transshipment port is one where mother ships with larger volumes and deeper draught visit a small number of well developed, deeper draught and technologically efficient ports where they discharge their import containers or load export containers.
The daughter vessels bring export cargo from small ports to transhipment ports for onward carriage by mother vessels while import containers discharged by mother ships are carried by daughter vessels to various destinations.
A gateway port is one which draws its export cargo from the primary, secondary and tertiary hinterlands, distributes its import cargo to various destinations falling within its hinterland. In a competitive port services market gateway ports will be able to sustain themselves well as they rely on the cargo traffic originating from their hinterland. Transhipment ports on the other hand, have to rely largely on external sources of supply.
Mother ships have always options to select hub ports of their choice. They do not show any special loyalty to any port. In a dynamic market environment they keep changing their port locations to suit their convenience and this practice makes future of transshipment ports vulnerable and risky.
A specific example is the world’s second largest container line Maersk shifting its loyalty from Singapore to Port of Tanjung Pelepas about two decades ago which resulted in the loss of 1.5 million boxes annually to Singapore.
Malta is a transshipment port in the Mediterranean region which lost almost half a million boxes when two or three container lines shifted their loyalty to other port locations.
Challenges ahead
Vizhinjam is reported to have taken up an ambitious expansion programme of completing their second, third and fourth stages at about ₹10,000 crore by 2028. During these four years the ports in the competitive field will also expand their facilities.
Singapore is building its next generation TUAS port capable of handling up to 65 million TEUs annually by 2040 with a design depth of 23 metre. Port of Salalah and Port of Tanjung Pelepas have come up as the second and the fifth most efficient container ports, per the World Bank performance index 2023.
Dubai has successfully built an ecosystem in Jebel Ali port that fuelled its growth and played a key role in UAE’s economic transformation. The nearest competitor Colombo port has now commissioned its West International terminal with a Quay length of 1400 m with a 20 m depth fully automated with a capacity to handle 3.2 million TEUs annually.
Success stories of transshipment ports like Tanjung Pelepas and Salalah could be an eye opener to Vizhinjam. To ensure that the patronising container line gets firmly anchored in their port environment Port of Tanjung Pelepas has entered into a joint venture partnership with APM terminals of the Maersk line with 30 per cent share holding.
Port of Salalah has also followed the same strategy of joint venture partnership with 30 per cent share holding by the APM terminals. As the port services market of container transshipment becomes more contestable and competitive it would be prudent for Vizhinjam to enter into joint venture partnership with the patronizing container line to protect its growth prospects.
Another strategy would be to create an ecosystem in the proximity of the port as in Dubai by establishing special economic zones, ship building yard, ship repair complexes and other associated infrastructure facilities to ring fence the port from adversities in the future.
The writer is a former Acting Chairman of J N Port, Mumbai, a former Chairman of Mormugao Port Trust and an Adjunct Professor of Indian Maritime University, Chennai
Published on April 29, 2025
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