India's ports have undergone a remarkable transformation, with nine container ports making it to the top 100 globally in 2023. Visakhapatnam leads, followed by Mundra and others. The turnaround time for ships has drastically improved, showcasing significant progress in port efficiency and competitiveness.
As a journalist in Mumbai in 1988, I could see from my office window a long line of ships waiting to get into Mumbai port. The waiting time could be a shocking 28 days. The idling of the ships was matched – indeed, caused – by idling port workers backed by powerful trade unions.
A 1990 study by World Bank expert Hans Jurgen Peters found that the fastest way to unload a ship in Mumbai was to pay the unionised workers to stay at home, and hire private workers to do the job. What a travesty.
India’s ports, among the best in developing countries during the British Raj, were ruined after Independence by stupid socialist policies. All major ports were reserved for a grossly inefficient public sector. Port unions were treated with kid gloves for fear of strikes.
In 2023, Visakhapatnam achieved 27.5 moves (loadings and unloadings) per crane-hour. This facilitated a turnaround time of 21.4 hrs for ships. Yes, just 21 hrs as opposed to waiting for 28 days in 1988. Rarely has such a transformation occurred with so little fanfare. The law says all major ports must be government-owned, but leaves minor ports to the jurisdiction of state governments. However, there was no definition of ‘minor ports’ or restriction on their size.
Chimanbhai Patel, Gujarat’s Congress chief minister in 1990-94, realised that the ‘minor port’ loophole could be used to create new ports bigger than GoI’s ‘major ports’. He propounded ‘port-led development’ for Gujarat, incubating new ports as industrial and transport hubs. Succeeding CMs, including Narendra Modi, followed the same path.
Gujarat moved towards private participation in ports in stages. First, it leased government jetties to private operators, then moved to joint ownership of entire ports, and finally to purely private ports. Gautam Adani’s Mundra became India’s biggest port on many metrics. The impecunious Indian Railways had no funds to connect new ports like Mundra to the main rail network. Always innovative, Adani and the Gujarat government formed a joint rail company for the task.
Other states followed Gujarat’s example. ‘Minor ports’ sprouted in all coastal states. GoI eventually became a convert too. All major ports have shifted to the landlord-tenant model. The government is port landlord, handling customs and other administrative tasks, and leases out the operation of all jetties, mostly on the basis of international competitive bidding.
Today, many Indian jetties are run by global giants like Dubai World, Maersk and Port of Singapore Authority. Dozens of Indian companies have also joined the fray. Intense competition has now created world-class ports.
This year’s Economic Survey lays out in some detail the improvement in Indian port performance. India’s rank in the World Bank’s Logistics Performance Index (LPI) improved from 44th in 2018 to 38th in 2023. With the introduction of cargo tracking, total dwell time of cargo in Visakhapatnam fell from 32.4 days in 2015 to 5.3 days in 2019.
Also, India’s position in international shipments climbed from 44th in 2018 to 22nd in 2023. The median turnaround time for Indian ports has fallen to 0.9 days, better than in the US (1.5 days), Australia (1.7 days), or even former champion Singapore (1 day).
But while cheering India’s port revolution, wake up to the great, growing gap with China. No longer are American, European or Japanese ports the biggest and best. China’s port developments in the Yangtze delta off Shanghai and the Pearl River Delta from Shenzhen to Macau put to shame the rest of the world.
Entire coastlines and island clusters have been converted into a gigantic complex of jetties, connected to the mainland by bridges and tunnels up to 100 km long. This is a mind-boggling testimony to China’s engineering skills.
Ningbo-Zhoushan Port on the Yangtze delta has been the biggest in the world for the last 14 years in total cargo throughput, which reached 1.25 bn tonnes last year. This is not a port in the ordinary sense of the word. Rather, it consists of no less than 19 ports over a coastline of 220 km, including several islands.
The world’s best container port, says the World Bank, is Yangshan. This is built on a chain of islands 30 km from Shanghai. It handles more cargo than all US container berths put together, a vivid demonstration of how the balance of world economic power is shifting. India has a tough job to catch up.
