Chennai: A strategic gateway for South India’s trade expansion
Known as the “Detroit of India,” Chennai has emerged as a key trade gateway, driven by its robust port infrastructure, expanding air cargo capacity, and thriving automotive sector.
Chennai, the capital of Tamil Nadu, has evolved into one of India's most significant logistics and manufacturing hubs. Strategically positioned on the southeastern coast of India, the city serves as a crucial gateway to Southeast Asian markets while maintaining strong connections to domestic industrial centres.
From bustling ports handling massive cargo ships to state-of-the-art automotive plants churning out vehicles for global markets, Chennai's dynamic logistics landscape is reshaping trade in the region and cementing its reputation as South India's commercial powerhouse.
Gateway to Southeast Asia: Chennai's port infrastructure
Chennai's identity as a logistics powerhouse is anchored by its port infrastructure. The Chennai Port, one of India's oldest major ports dating back to 1881, continues to be a cornerstone of the city's maritime trade.
According to data from the Chennai Port Authority, the port handled 51.60 million tonnes of cargo in 2023-24, up from 48.95 million tonnes in 2022-23. Container volume also increased to 1,589,540 TEUs from 1,470,305 TEUs in 2022-23.
The port's infrastructure includes specialised berths for containers, automobiles, and bulk cargo, supported by three docks, Ambedkar Dock, Jawahar Dock, and Bharathi Dock, which cater to different cargo segments. Major exports from the port include engineering goods, agro products, granite stone, textile garments, tires, and automobiles, with companies like Hyundai, Nissan, and BMW using the port for their export operations.
Complementing Chennai Port are Kamarajar Port (Ennore Port) and Kattupalli Port cum Shipyard. Kamarajar Port was developed specifically to handle coal, LNG, and other bulk commodities, thus relieving pressure on the Chennai Port. The port has a current cargo handling capacity of 58 million tonnes per annum (MTPA).
While Kattupalli Port, owned by Adani Ports, currently handles 24.65 million tonnes per annum (MTPA), it plans to expand its capacity to 320 MTPA.
These three ports collectively form a robust maritime infrastructure that has positioned Chennai as the logistics gateway for South India and beyond. The proximity of these ports to each other allows for specialised handling of different cargo types while providing redundancy in the supply chain, a critical factor for industries requiring reliable logistics solutions.
“For Global Logistics Solutions it's a very important port as we specialise in LCL groupage both for import and export and Chennai port acts as a gateway for all the Southern states of India for the LCL imports cargo,” says Naveen Prakash, Founder of Global Logistics Solutions.
Air connectivity: Chennai International Airport
Chennai International Airport serves as the primary air gateway for southern India, handling both passenger and cargo operations. The airport is owned and operated by the Airports Authority of India (AAI).
For Chennai, the airport handled 22,240.1 metric tonnes of international freight in January 2025, reflecting a 3.1% increase from 21,577.4 metric tonnes in January 2024. From April 2024 to January 2025 period, Chennai managed 241,752.0 metric tonnes of freight, marking a 15.3% rise from 209,597.1 metric tonnes handled during the April 2023 to January 2024 period, according to data from AAI.
The airport's cargo operations are facilitated through dedicated terminals for domestic and international cargo, with specialised facilities for perishables, pharmaceuticals, and other high-value goods.
According to the AAI, the cargo terminal at Chennai Airport handles import, export, transshipment cargo, and unaccompanied luggage. It is spread over an area of 19.5 acres.
Recent modernisation efforts have significantly improved the airport's capabilities. Chennai Airport's Phase 2 expansion, which includes upgrades to cargo handling facilities, is expected to be completed by early 2026.
Chennai Airport has three passenger terminals. Terminal 1 and Terminal 4 handle domestic traffic, while Terminal 2, also known as the New Integrated Terminal Building, handles international traffic.
Additionally, AAI is planning to build a fifth terminal (T5) dedicated solely to cargo operations.
“We see a steady demand for transports to and from Chennai, thus being part of our Indian network for several years now.”
Shankar Iyer, Lufthansa Cargo
The airport's strategic location allows it to serve as a transshipment point for cargo moving between East Asian and Middle Eastern markets. This positioning has attracted several international cargo operators to establish regular services to Chennai, further strengthening its role in global supply chains.
The airport is served by several cargo carriers, including Qatar Airways Cargo, Cathay Cargo, Lufthansa Cargo, Turkish Cargo, SF Airlines, YTO Cargo Airlines, Sichuan Airlines, K-Mile Air, Blue Dart Aviation, Emirates SkyCargo, and Ethiopian Cargo.
“Lufthansa Cargo serves Chennai with two weekly freighter frequencies, one on our Hyderabad and Mumbai rotation each, and with five additional frequencies per week as belly capacities on passenger aircraft. We see mainly the demand for engineering equipment and general cargo on this route,” says Shankar Iyer, Director Sales & Handling South Asia, Lufthansa Cargo.
Automotive manufacturing: Chennai's Detroit connection
Chennai's nickname as the “Detroit of India” is well-earned, as the region accounts for over 35% of India’s total automobile production and a significant share of exports.
The city and its surrounding areas host manufacturing facilities for global automotive giants including Hyundai, Renault-Nissan, Daimler, BMW, and domestic players like Mahindra & Mahindra and TVS Motor Company.
This concentration of automotive manufacturing has created a sophisticated logistics ecosystem specifically tailored to the needs of the industry. The region features specialised warehousing facilities, just-in-time inventory management systems, and multi-modal transportation networks that connect manufacturing plants to suppliers and export terminals.
According to a report published in Madras Musings, Chennai has an annual production capacity of 1,380,000 cars and 361,000 commercial vehicles. This translates to three cars every minute and one commercial vehicle every 75 seconds.
The success of this industry has attracted substantial investments in logistics infrastructure, including specialised vehicle carriers, dedicated railway sidings, and roll-on/roll-off (RoRo) facilities at the ports.
The automotive sector has also driven the development of supplier parks and logistics zones in the vicinity of manufacturing facilities. These zones house component manufacturers and third-party logistics providers who serve the needs of the automotive industry, creating a tightly integrated supply chain ecosystem.
Integrated logistics networks: Connecting the dots
Chennai's logistics strength extends beyond its individual components, ports, airports, and industrial clusters, to the networks that connect them. The city benefits from its strategic location on the Golden Quadrilateral highway network, which connects it to major industrial centres across India.
The Chennai-Bengaluru Industrial Corridor (CBIC) further enhances this connectivity, linking two of South India's major economic hubs.
Rail connectivity plays a crucial role in Chennai's logistics landscape. The city serves as a divisional headquarters for the Southern Railway, with multiple rail corridors connecting it to inland container depots and manufacturing centres. The Dedicated Freight Corridor project, though primarily focused on northern India, has indirect benefits for Chennai as it improves overall cargo movement efficiency across the national rail network.
The integrated multi-modal logistics parks being developed around Chennai represent the future of the city's logistics infrastructure. These parks combine warehousing, rail connectivity, container freight stations, and value-added services in a single location.
In June last year, Reliance Industries began construction on India’s first Multimodal Logistics Park at Mappedu near Chennai, with an investment of ₹1,424 crore. Spanning 184.27 acres in Tiruvallur district, the project was initially conceptualised 12 years ago and aims to provide efficient logistics services. Strategically located, the park is 52 km from Chennai Port, 80 km from Ennore Port, and 87 km from Kattupalli Port.
Recently, CCI Group, a leading 4PL logistics and supply chain company in India, announced plans to invest around ₹640 crore to develop a 20 lakh sq. ft. Grade-A logistics park in Phase 2, Polivakkam, Chennai.
Digital integration is increasingly becoming a differentiator for Chennai's logistics ecosystem. The Port Community System implemented across major ports has streamlined documentation processes and reduced dwell times. Similarly, the e-way bill system and GST-driven logistics optimisation have improved the efficiency of interstate cargo movement.
Warehousing and distribution: the backbone of logistics
Chennai's warehousing sector has undergone significant transformation in recent years, moving from traditional godowns to modern, technology-enabled fulfilment centres.
According to data from Address Advisors, Chennai's warehousing sector has experienced consistent growth over the past five years. The total available warehousing space increased from approximately 30 million square feet in 2019 to over 50 million square feet in 2024. Notably, the supply of Grade A warehousing has more than doubled, rising from 6 million square feet in 2019 to over 12 million square feet in 2024, reflecting a shift towards higher-quality infrastructure.
The warehousing clusters are strategically located along major highways, particularly the Chennai-Bengaluru corridor and the Chennai-Tirupati route. These locations offer proximity to both manufacturing centres and transportation networks, enabling efficient distribution operations.
The growth of e-commerce has been a significant driver for warehousing demand in Chennai. Major e-commerce players have established fulfilment centres in and around the city to serve the southern market. These facilities employ advanced sorting systems, automated storage and retrieval systems, and sophisticated inventory management technologies.
Cold chain infrastructure has also seen substantial growth, catering to the pharmaceutical industry and growing demand for fresh produce and processed foods. Chennai now hosts specialised temperature-controlled warehouses and distribution centres that maintain the integrity of temperature-sensitive products throughout the supply chain.
Challenges and future outlook
Chennai's logistics ecosystem faces several immediate challenges despite its impressive growth. Traffic congestion remains a major issue, significantly affecting last-mile delivery efficiency.
Discussing the challenges at Chennai Port, Prakash of Global Logistics Solutions, says, “Chennai port volumes have grown very steadily over these decades, especially with adjacent ports of Ennore and Kattupalli. Though the ports are able to absorb current volumes, the limited draft doesn’t allow bigger vessels to call the port. However, there is big hope with the Tuticorin Outer Harbour project that will have a much deeper draft of around 20 metres. It will be an all-weather port. If it comes up in the next 5 years, it will significantly help to handle volumes of industrial growth in the southern and western part of Tamil Nadu.”
He further adds, “Chennai Port has reached its maximum capacity, with congestion at the entry and exit points due to its proximity to residential and urban areas.”
Chennai International Airport contends with its own set of challenges. Capacity constraints during peak hours cause delays in cargo processing, while the airport's layout, developed in phases over decades creates operational inefficiencies. During monsoon seasons, waterlogging occasionally disrupts cargo operations. The airport also faces stiff competition from newer facilities in Bengaluru and Hyderabad that were designed with modern cargo handling principles from the ground up.
“From our point of view, we see some room for improvement at Chennai cargo terminal when compared to other Indian airports, such as Delhi, Hyderabad, and Bengaluru, which enjoy good cargo terminal infrastructure. There are some great opportunities for cargo business when we look at the general economic development in Chennai being an important market for Lufthansa Cargo,” says Iyer of Lufthansa Cargo.
Climate vulnerability remains a pressing concern across all logistics infrastructure in the region. Seasonal weather patterns and extreme weather events have historically impacted operations, pushing developers to incorporate resilience measures like elevated structures and improved drainage systems into new logistics facilities.
“Chennai port volumes have grown very steadily over these decades especially with adjacent ports of Ennore and Kattupalli. Though the ports are able to absorb current volumes, the limited draft doesn’t allow bigger vessels to call the port.”
Naveen Prakash, Global Logistics Solutions
Looking ahead, Chennai is poised for continued logistics evolution through several key initiatives. The Chennai Peripheral Ring Road project will improve connectivity between industrial zones and logistics hubs while reducing inner-city congestion.
The Sagarmala port-led development programme includes several Chennai-specific projects to enhance maritime logistics operations. Meanwhile, sustainability has emerged as a priority, with ports implementing green initiatives like shore power for vessels and solar energy installations, while warehousing developers focus on energy-efficient designs.
Digital transformation is perhaps the most significant trend reshaping Chennai's logistics landscape. Blockchain-based documentation, IoT-enabled asset tracking, and AI-driven optimisation are being adopted across the value chain.
The establishment of a Logistics Data Bank has already improved container tracking and transit predictability. As global supply chains continue to evolve, Chennai's strategic location and integrated approach to logistics infrastructure position it advantageously to serve as South India's logistics gateway for decades to come.
