Cargo volumes across major Ports flat in May 2019

MUMBAI: Cargo volume across major ports was flat in May 2019 YoY (+5.7% in Apr’19; +3% in FY19; as per Indian Ports Association) on subdued POL* volume (down 1%; 36% share) and thermal coal volume (down 11%; 15% share) and flat coking coal volume (8% share).

Cargo volume across major ports was flat in May 2019 YoY (+5.7% in Apr’19; +3% in FY19; as per Indian Ports Association) on subdued POL* volume (down 1%; 36% share) and thermal coal volume (down 11%; 15% share) and flat coking coal volume (8% share).

However, iron ore volume rebounded (+27% aided by lower base; 8% share) and container volume grew 9% (22% share). Among containers, JNPT tonnage vol grew 6% YoY (+3%/ 7% in April’19/ FY19) and non-JNPT tonnage vol was up healthy 12% YoY (+8%/ 10% in April’19/ FY19). Railway cargo volume grew 3% YoY (+3%/ 5% in April’19/ FY19) on similar rise in coal, while iron ore volume was up strong 18% YoY. Container volume grew 7% YoY on healthy Exim volume growth (10% YoY), while domestic volume declined 4% YoY.

Kribhco operates container trains and manages ICDs and PFTs across Haryana, Uttar Pradesh and Gujarat. CONCOR to commence coastal movement on India’s east coast and Bangladesh; operates 2 coastal ships. Truck rentals declined 1-1.5% in May ’19 (11-15% decline since Nov’18) on slowdown in factory output which led to oversupply of cargo vehicles in open freight market.

Railways’ board places additional Rs 2,600-crore order for 9,468 wagons (backlog of 25,000 wagons).Vizhinjam port project delayed (expected time line for phase I completion was Dec’19). Global 3PL player Kerry Logistics Network started offering services in India under Kerry Indev Express brand. Services include express logistics solutions, international freight forwarding, warehousing and distribution solutions. Phase I will include 200 service centres and fleet of vehicles.

ADSEZ is shifting gears to accelerate growth led by (a) port/ terminal expansion into southeast Asia and (b) opening up newer growth avenues in logistics and enhancing client stickiness by offering end-to-end solutions. We expect core EBITDA to post 14% CAGR over FY19-22 (volume CAGR at 13%). CONCOR has ensured assured pricing to customers (no more rejigs) in FY20 (post increasing prices by 4-5% from Apr’19), as it will benefit from Railways’ assured rail freight pricing (in lieu of advance payment).

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