Mitsui deploys two ships for India, expands operations

Mitsui OSK Lines, the world’s largest shipping and multi-modal transportation company, that sees 40% of its volumes coming from China, is planning to focus on India following the slowing down of the Chinese economy.

India currently accounts for nearly 4%, or about 160,000 TEUs (twenty foot equivalent units), of the shipper’s total global business volumes. This is expected to double to about 8% in a year.

Masakazu Yakushiji, vice-chairman of MOL said the company would introduce two 2,000 TEU capacity container ships, NCX and KPX, covering the ports of Nhava Sheva and Pipavav in India. The strategy also includes a direct service between China and Nhava Sheva.

“We are seeing changes in the Chinese economy with costs going up in South China and production moving up in the technology ladder. Some of the lower-end technology and labour intensive production works are either moving to western China or migrating to third world countries such as Vietnam and Indonesia,” Yakushiji said.

Michael PY Goh, head of Asian operations, said, “The trade between India and China is poised to grow to $100 billion by 2015 and I think we have the product in place at the right time to serve our customers better.”

The company officials said the KPX service would offer an effective alternative gateway to its customers in North India to avoid current frequent bottlenecks at Nhava Sheva for inland container depot cargo. MOL is also looking at opportunities to enhance its network from South and East India. The service from China to India will also connect Singapore and open up ships to other trades such as South America, US and South Africa.

“We are expecting higher growth levels from the Indian market, which is growing strong in imports of high-end consumer electronics and goods and also in exports,” said Yakushiji.
MOL is also considering to introduce direct services connecting India with the US and Europe, apart from eying the Vallarpadam terminal for a new service. The company is planning to add 50 vessels this year to its global fleet of 900 vessels now.