Sunday, July 21, 2024

Adani Ports Considers Closure of Krishnapatnam Container Terminal Amid Plummeting Volumes

Adani Ports and Special Economic Zone Ltd (APSEZ) is contemplating the closure of the container operations at Krishnapatnam Port in Andhra Pradesh due to a significant decline in volumes and strategic shifts, including the sale of a 49 percent stake in the Ennore container terminal. This potential move, if executed, would be an unusual decision for APSEZ, considering containers are the fastest-growing segment in its portfolio.

APSEZ, India’s largest private port operator, acquired full control of Krishnapatnam Port in 2021. The container terminal at Krishnapatnam Port, with a capacity of handling 1.2 million twenty-foot equivalent units (TEUs) annually, has seen a sharp decrease in container cargo. The terminal, which used to handle around 12,000 TEUs per month a year ago, now manages an average of 5,000-5,500 TEUs per month, with only 18 ships on average.

The decline in container volumes has led APSEZ to reconsider the viability of the Krishnapatnam container terminal. The facility primarily serves as a transshipment hub for containers bound for Kolkata, Nepal, and Bangladesh. However, changes in shipping patterns and the emergence of competing facilities in the region have impacted Krishnapatnam’s role in container handling.

Sources suggest that APSEZ aims to optimize its terminal portfolio by concentrating container operations at Ennore and Kattupalli ports, creating a cluster, while Krishnapatnam would pivot toward handling bulk and liquid cargo to reduce pollution concerns in the Chennai region.

The recent sale of a 49 percent stake in the Ennore container terminal to a unit of Mediterranean Shipping Company (MSC) for Rs247 crores indicates strategic repositioning within APSEZ’s portfolio. MSC’s involvement could enhance collaboration and container traffic at Ennore, further influencing the potential closure of Krishnapatnam’s container terminal.

Although APSEZ has not officially announced the closure, industry insiders anticipate a gradual phasing out of the Krishnapatnam container terminal, with operations shifting to the upcoming Gangavaram Port once it receives regulatory approval. Krishnapatnam Port would then focus on bulk and liquid cargo, utilizing its infrastructure efficiently.

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