December 10, 2020
Despite the slowdown in global trade and unfavorable repercussions caused due to the lockdown, the shipping and ports sector has been able to stand its ground due to the will power to change along with times.
With an aim to have a bird-eye view of the mechanisms of the ever-growing and one of the most crucial sectors for a strong economy, Logistics Insider reached out to Essar Ports – India’s second-largest private-sector port and terminal company in terms of capacity and throughput.
In this exclusive interaction, Rajiv Agarwal, CEO and Managing Director, Essar Ports Ltd express his views on the initial struggles of the port, its journey towards a V-Shaped recovery, opportunities for the Make In India program for the shipping sector, the Major Ports Authority Bill 2020 and much more. Excerpts follow:
Recently, Essar Port clocked revenue for cargo handling of 23.8 million tonnes for the six months with a growth of 12.5% in Q2 FY 21 as compared to Q1 FY 21, despite the slowdown in April as India posed the biggest ever lockdown to contain the spread of the virus. What initiative was taken by the port to overcome the challenges posed due to COVID-19?
Ports services were categorized as essential services, so ports continued to run with minimal operations during the lockdown. The initial phase of the lockdown had some unfavorable repercussions that hampered the port activities, restricted movement of manpower and cargo, mismatched the balance of demand and supply which ultimately impacted the shipping volumes and the business growth.
Despite all the challenges, Essar Ports remained operational throughout the lockdown. We have been addressing the concerns of the workforce amid the COVID pandemic. Further, we have minimized Human Intervention through our mechanized facilities and continuously practiced Body Screening & Social Distancing. Also, we complied with our cargo handling with Govt. guidelines and in close coordination with Port Health Officer, worked in close coordination with the local authority and Essar Foundation to provide relief to the local community and stakeholders and undertook quarantine of effected workforce with all safety standards.
In addition to this, we also made sure to brief the stakeholders on hygiene protocols and spreading COVID-19 awareness and took regular health check-ups and immunity boosting initiatives
All the facilities of Essar Ports played a vital role in ensuring business continuity without affecting the customer supply chain. Port activity is gaining momentum but the revival of the sector would entirely be determined by how quickly the gap between the demand and actual consumption is met.
A few months ago, you said that you expect India’s dry bulk, energy shipping to normalize in 3-4 months. What is the current scenario? Is it back to its normal figures?
For the Major Ports, the recovery from April has been significant but the cargo handling is around 88% of pre- COVID levels. Essar too was marginally impacted during April post which it has seen a ‘V’ Shaped recovery and is on track to reach pre-COVID levels.
The above is a confirmation that the same has normalized and is almost nearing pre-COVID levels.
How has the PM’s call for the Atmanirbhar Bharat during these unprecedented times helped the sector to reflect upon its potential and the opportunities that lie ahead?
It gives us a sense of pride to be part of the country’s ambition of Atmanirbhar Bharat. We at Essar Ports, certainly see this move changing the business eco-system. It is a big move supporting the industry. It will also allow the local manufactures and give the desired push to the economy along with a big boost to Coastal and inland waterway transport. Our current business performance is an illustration of the sector being future-ready and moving towards the growth path.
Essar is a pioneer in coastal shipping which will play a pivotal role going forward. The movement of cargo by waterways is one-fifth of the cost by road and Essar has been a pioneer in moving the cargo through coastal route. It has taken the lead as early as the 1970s and made significant investments in Steel, Ports, and Shipping Sectors along the coasts in India linking production and consumer centers. Linking the raw material and consumption centers along the coast have been at the heart of Essar’s philosophy. Iron Ore/ Pellets are moved from the east coast to the west coast and finished goods between west coast to east coast.
We expect industries, ports, and shipping to jointly play a pivotal role in the next wave of manufacturing and port-led development.
The outbreak of the pandemic has brought technology to the centre stage. How do you think technological advancements help in boosting the operational efficiency of ports? What technologies does Essar Port leverage to increase its efficiency?
Technology undeniably is the way forward for all businesses across sectors and industries. Technology in the Ports sector has enabled better customer service, environmentally conscious/eco-friendly operations, faster turnaround of vessels, reduction in the cost of operations, improves efficiencies, and provides better controls.
Keeping in mind the importance of technology in the port sector, we at Essar ports offer mechanized facilities like state-of-the-art IT systems that ensure round-the-clock uptime, and monitoring of our facilities/ systems, fire-fighting & dust suppression systems, including cold fog systems that minimize pollution and are environment friendly, data analytics and investments that continuously improve operational efficiency and Automated Mechanised Systems at our terminals across India.
Last Month, the Major Port Authorities Bill 2020 was passed in Lok Sabha. How will it help reform the ports sector and contribute to greater autonomy?
The Major Port Authorities Bill, 2020 passed in Lok Sabha, will be a key milestone in the Indian Ports Sector. It will pave way for improvement in governance and efficiency in the ports sector leading to a reduction in overall logistics costs. The reform will also make Indian manufacturing globally competitive and help build an Atmanirbhar Bharat.
Having been a part of the industry for decades, what major transformations of the industry have you seen that have helped the sector grow?
One of the major transformations of the ports sector is the shift towards technological advancements in the ports sector. Technology is revolutionizing ports and the way operations are being undertaken. Some of the key transformations which have happened over the years are Deeper drafts by undertaking a focused dredging program, Mechanization with state of art equipment delivering higher productivity through PPP projects in Major Ports, Integrated development of Port-based Industries which lower costs of EXIM cargo and Digitization of information and faster flow which enables faster turnaround of shipments.
The Indian Government is also playing a crucial role in supporting the ports sector with multiple reforms and policies. One of the initiatives undertaken by the government is the ambitious ‘Sagarmala’ project. The project emphasizes the modernization of ports and the development of infrastructure to carry out trade operations quickly, efficiently, and cost-effectively.
Source: Logistics Insider