Mediterranean Shipping Company S.A. (MSC) India initiates a new service beginning this month. The feeder shuttle service links Paradip, a major gateway on India’s east coast state of Odisha with a major transship port in Asia, Colombo, and Sri Lanka. From there, the containers will be put on its mainline vessels and hauled to final destinations in Europe and the United States (US). In the initial phase, Paradip port authorities have announced plans for MSC to make three calls per month on this route.

Previously this port only handled dry/liquid breakbulk cargo and the international container terminal of Paradip was very underutilized. With the local government’s support and funding, the port authority intends to diversify the cargo—as an estimated 200,000 TEUs are available in the hinterland.

The MSC feeder service follows an innovative proposal finalized by the Odisha government to attract container lines and facilitate trade away from the extra cost on shippers to transship through Visakhapatnam and Kolkata/Haldia ports.

Odisha government has agreed to pay MSC $200 per TEU, as viability gap funding (VGF), if the volume falls below the minimum 250 TEUS guaranteed during a ship call to Paradip port. The Paradip Port Authority is offering a 75% discount on vessel-related charges to container lines to boost container traffic.

These are great incentives offered by the Odisha state and Paradip port authorities to promote containerized freight. This has opened additional routing options for inbound/outbound freight. Odisha is one of the largest aluminum/steel-producing states in India. Now with feeder connectivity to Colombo and mainline vessel connectivity to the US with MSC, we can expect routing constraints to alleviate for aluminum exporters in this region and trade activities to increase.

“This new service offers numerous benefits, including boosting trade and commerce, stimulating regional economic growth, reducing congestion at existing ports, enhancing strategic importance in the Indian Ocean region, ensuring energy security, driving infrastructure development, and promoting environmental sustainability.

This development facilitates smoother transportation of goods, creates job opportunities, attracts investments, improves maritime connectivity, and mitigates adverse environmental impacts. Overall, it represents a significant opportunity for India to enhance its maritime infrastructure, spur economic development, and bolster its position in the global trade network,” Sabri Aminuddin, Route Development Manager, South Asia.

If you have questions about this new service or want more information about our services from our India Center of Excellence, reach out to our experts.

By Niket Panchal, Import Supervisor, India US Trade Lane

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