Will Mundra Port ops be affected further? Adani Ports goes ahead with empty container yard plans despite standoff; what we know so far

Despite significant pushback, Adani Ports and Special Economic Zone (APSEZ) has decided to move forward with plans for an empty container yard (ECY) at its flagship Mundra Port.

The move was announced on Thursday as part of its Ambition 2031 plan to boost container handling capacity by more than 6 million TEUs over the next five years.

APSEZ has stated that the push for a new ECY within the port will impact the handling of 1.6 million TEUs annually, given the port's whopping 35 per cent share in India's container market.

"The dedicated Empty Container Yard at Mundra ... will enhance efficiency across the container ecosystem by enabling faster turnaround times, reducing unnecessary container movements, and optimising logistics costs," explained Adani Ports CEO Ashwani Gupta.

In building the new ECY, APSEZ is also aiming at closer coordination with Customs authorities, shipping lines, terminal operators, and transporters.

This is part of APSEZ’s decision to freeze empty-yard codes outside the Mundra Port limits from September 1 onwards.

Though Adani Ports has said that the change was intended to address the misuse of empty-depot codes, improve security, reduce road congestion, and improve turnaround times, it has not gone down well with both empty container depots and transport companies.

However, one such stakeholder told Container News that the real problem was not with the change itself, but how it was introduced.

"When an established process is used every day by exporters, shipping lines, transporters and depots, the replacement arrangements need to be ready before the existing ones are withdrawn," the stakeholder said.

Indeed, Mundra's empty container parks collectively handle about 3.25 lakh containers a month.

Factoring in the money invested over many years in land, handling equipment, repair facilities, workshops, and people, as well as the relationships these depots built with shipping lines, transporters, and other businesses, it is rather the sudden change in the Mundra Port's operations that is said to have led to the strike that has impacted port operations.

The Kandla Mundra Container Transport Welfare Association had stopped picking containers—both loaded and empty ones—on Wednesday in solidarity with the empty depot operators' strike since August 28.

It is yet to be seen how the strike will shape up, now that Adani Ports has not only gone ahead with internalising empty container operations, but is also planning to build an ECY to future-proof its new move.

“The development has come at a particularly difficult time for the exporting community. Exporters are already grappling with abnormally high ocean freight rates, shortage/non-availability of containers on several routes and inadequate shipping space, besides continuing uncertainty in global logistics and trade,” Dr Ajay Sahai, Director General and CEO of the Federation of Indian Export Organisations (FIEO), wrote in a Wednesday email to Vijay Kumar, Secretary, Ministry of Ports, Shipping and Waterways (MoPSW).

He also warned that impacted export-import (EXIM) operations would be one of many new worries for the port if the strikes continued, adding that penalties, delayed exports, and the credibility of India's container ports was also at risk, as per an ET Infra report.

The JNPA case

Notably, the developments at Mundra come just months after the Jawaharlal Nehru Port Authority (JNPA) awarded a 30-year license to RSA Global for the development of a 62-acre ECY.

The ECY, to be developed as part of a ₹2,580 crore deal with the Dubai-based logistics company, had faced flak from trade unions.

They had alleged that the deal could lead to a "monopoly" between the RSA and the JNPA, because they claimed that the 74 private ECYs around the port would be affected.