SHIPPING

SCI to make big splash in offshore sector
Fairdeal Group’s ICD-Indore set to change economic face of MP
Crystal Shipping to begin box service between Saint John & JN Port, Mundra
MidEast shipping industry primed for robust growth
Alltime Shipping opens account at ICD-Dashrath
MANSA at 30—Promising sailing ahead

NEWS BRIEF :

DCI to charter dredger on KoPT’s behalf
Third shipyard at Hazira on ABG’s agenda
Kalmar to acquire ESTP
APL Logistics expands OceanGuaranteed service
NYK upgrades IndAmEx service
China-wide box throughput up by 17 pc in H1
Essar Shipping acquires 2 Supramax vessels
Vizag Port sets new DAP record
Dedicated pipeline to link New Mangalore Port to SEZ

At the signing ceremony are Mr S. Hajara (4th from left) with Mr D. K. Bae, Mr A. P. V. N. Sarma and others

The surge in crude oil prices has prompted the Shipping Corporation of India (SCI) to enter the offshore segment in a big way. It has earmarked over Rs 1,200 crore for its offshore activities, which will be undertaken by the end of the year, a senior official disclosed.

According to the official, after a comprehensive study this year, SCI proposes to launch two to three new projects in offshore service areas, including buying six to eight anchor handling tug-cum-supply vessels (AHTSVs) of various sizes.

These vessels now command a charter rate of about $ 11,900 each. They are used to install and maintain oil platforms.

"The company has chalked out a major future plan for the offshore segment where it will invest from time to time. Moreover, SCI’s recent move from being a mini-ratna to a nav ratna company will give it the required fuel to speed up its ambitious ship acquisition programme lined up for the next four years", the official stated.

At present, SCI owns and operates 10 offshore vessels.

SCI now looks after operations and management of some of the Oil and Natural Gas Corporation’s (ONGC) offshore support vessels and specialised vessels.

In 2006, ONGC and SCI had signed a memorandum of understanding (MoU) for setting up a joint venture for ONGC’s offshore operations.

The official also said that about 56 per cent of the total exploratory sedimentary basins in the country lie in the offshore sector and only 19 per cent of the total area has been explored, thus giving a huge potential for further exploration.

Thus, SCI has planned for timely addition of new offshore assets in over 12 months, which would be a major revenue earner.

Two years ago, SCI had unveiled a capital expenditure programme of Rs 15,000 crore for acquiring 72 vessels till 2011, including replacement of some older vessels.

Of this, it has already spent close to Rs 7,000 crore to buy 28 vessels in the last two years. The remaining 44 vessels will be acquired during the next three years, with four of them scheduled to join the company’s fleet within a month.

….SCI inks deal with STX to augment bulk fleet

Continuing with its vessel acquisition spree, the SCI has placed orders for 4 Panamax bulk carriers with STX Shipyard. The relevant deal was inked recently by Mr S. Hajara, Chairman and Managing Director of SCI and Mr D. K. Bae, Deputy President of STX, in the presence of Mr A. P. V. N. Sarma, Secretary of Shipping.

SCI also has 6 LR-I size product tankers and 6 Handymax bulk carriers on order with STX. The vessels would be built at the shipyard’s state-of-the-art shipbuilding facility at Dalian in China.

These vessels would be of higher capacity in the Panamax size range of 80,655-DWT each, as compared to the conventional Panamax vessels of 75,000-DWT, enabling the company to carry more cargo per voyage.

With the signing of this contract, SCI has 32 vessels of 1.44 million GT on order. These include all types of vessels, i.e. crude oil carriers, including 2 VLCCs, product tankers, dry bulk carriers, cellular container vessels and offshore supply vessels.

The company has plans to place orders for 42 more vessels in about 3-4 years. 

Fairdeal Group’s ICD-Indore set to change economic face of MP

The Fairdeal Group is set to launch Central India’s first private inland container depot (ICD) in Indore.

Called ICD-Indore, this marks a significant step in attracting additional opportunities in the critical cargo/container-related business to Madhya Pradesh, according to a release.

With the setting up of ICD-Indore, the region as a whole would benefit in terms of economic development, increased employment opportunities and all-round prosperity, the release stressed.

The strength of ICD-Indore is that it is 100 per cent road-operated, the release underscored. Road transportation makes good economic sense; it means acceleration and, therefore, faster movement. Transport by road also facilitates, especially for imports and exports, increased chances of adhering to deadlines and working according to plan, the release pointed out.

Having a road-linked ICD also means faster arrival and clearance of containers from ports, minimum inventory of raw material due to planned arrival of import cargo and savings in detention and ground rents.

ICD-Indore, therefore, is set to be a boon for all those associated with this business, namely, shipping companies, importers, exporters, CHAs, etc., and will mark the beginning of a new chapter in the container-cargo shipment story of Madhya Pradesh. 

Crystal Shipping to begin box service between Saint John & JN Port, Mundra

Capt. Ramesh Gulati

Crystal Shipping Co. Pvt. Ltd has decided to commence a container service between the new British port of Saint John, New Brunswick, and the Jawaharlal Nehru and Mundra Ports.

The first cargo of 10 boxes, comprising a local brew, is expected to be shipped from Saint John to JN Port this month.

Capt. Ramesh Gulati, Crystal Shipping’s Chairman and Managing Director, was in Saint John recently to tour the port’s facilities.

"We see a lot of opportunities to develop trade out of this port", said Capt. Gulati. "In the long term, we want to develop a regular service to India, and that could be a combination of many things, like bulk items, scrap metal".

Following the Saint John tour, Capt. Gulati came away impressed with both the port’s flexibility on storage space and time limits, and its efficiency in moving cargo from ships. He said the initial fall shipments would mark the beginning of what could become a long-standing trade partnership.

Over the next several months, Crystal Shipping and port officials will try to identify goods that could move between Saint John and Mumbai on a monthly schedule, said Mr Al Soppit, Chief Executive Officer of the city’s port authority.

"The goal here is to see if we can get enough volume and develop a regular service both ways", he said. "If the opportunities are there, we will talk to different exporters to see if we can put something together as a team".

Crystal Shipping would be the port’s second customer to run a regular service to India. 

MidEast shipping industry primed for robust growth

The shipping industry in the Middle East is projected to grow by 30 to 35 per cent in 2008, according to industry experts.

Its regional shipping industry is also projected to experience greater growth this year than the global shipping industry, reports Emirates Business 24/7, with the Middle East shipping industry expected to maintain growth this year at 20 per cent, the same level as in 2007.

The report said that analysts anticipate the shipping industry will grow by around one-third in the Middle East region in 2008, up from 25 per cent growth last year.

Last year, UAE terminals registered 19 per cent growth in container throughput to 14 million TEUs, with Dubai’s Jebel Ali and Port Rashid growing at a rate of 20 per cent to 11 million TEUs, the report said.

It said that Jebel Ali port is forecasting a 40 per cent increase in container throughput from last year’s 9.9 million TEUs to 14 million TEUs in February 2009.

The Middle East shipping industry has not been hit hard by soaring world fuel prices compared to shipping companies operating outside of the region.

"The demand for Middle East oil is increasingly becoming a major lure for capital from offshore companies that are now establishing bases in the region. We expect investments, especially in crude carriers, to increase tremendously this year as operators seek to tap into the market", Mr Sharafuddin Sharaf, President of UAE Ship Owners’ Association, was cited as saying. 

With The Container In The Background Are (from left) Mr Daxesh Parikh (Tulsi Logistics), Mr Rajan Nair (Partner, Alltime Shipping), Ms Samrita Kaur Gill (Appraiser, Customs), Mr Pramod Singh (Appraiser, Customs), Mr D. S. Vankar (Superintendent, Customs), Mr H. B. Shah (Superintendent, Customs), Mr T. N. Bhandhopadhyai (Superintendent, Customs), Mr S. R. Nimbhorkar (Inspector, Customs) and Mr S. Raut (Inspector, Customs)

Alltime Shipping, a recently established freight forwarding company, despatched its first LCL consol box from the inland container depot (ICD)-Dashrath on August 7.

The container, which was stuffed with cargo for various destinations in the US, the UK, South Africa, Thailand and Sri Lanka and which had a volume of 27 cbm, was moved to the D’Node hub for further movement in direct consols to their respective destinations.

Alltime Shipping is associated with Console Shipping Services India Pvt. Ltd and is confident of servicing LCL clients from this region through the CSS Group’s worldwide network.

It believes in offering single window services to clients and has plans to strengthen its global market reach from Gujarat.

The company achieved this success in a very short span of time after opening its office in Vadodara, pointed out a release.

Alltime Shipping has thanked Customs, CWC, exporters and CHAs for their support in making this despatch possible. 

At the age of 30, an individual has usually completed the preparatory stages of his life and career. While his values may not be as coherent and firm as they would be a few years later, he has chosen the principles on which those values will be set. He has established his potential to his peers, colleagues and superiors and his career is taking off. A larger part of his work life is ahead of him than behind him. He might have achieved a lot in 30 years but much more is expected of him in the future.

If there is a hierarchy in his company, he is generally called "the kid" or "young man". People will say, "That’s a tough deadline. Give it to the kid and see what he does with it" or "That’s a difficult territory. Give it to the young man to prove himself".

Organisations are different. In 30 years’ time, the founding leaders, who had the dynamism to create something new, have either retired or moved away to other things. The Association’s objectives and constitution, after the usual controversies and debates, have stabilised and while they may not have hardened to the point that they prevent action, they would have firmed up to the point that actions take predictable directions. A 30-year-old organisation is entering into its middle age. It could have the knowledge to determine what needs to be done but may lack the energy and enthusiasm to execute it.

Organisations, of course, are not individuals. Two things determine an Association’s nature, level of activity and visibility. Foremost are the challenges it faces from the environment and its own members and the responses it makes. These shape the nature of the Association.

NASSCOM transformed itself from a group of software body shoppers and infant hardware manufacturers to a powerful lobbying body, representing 1,200 Indian and foreign companies, the public face of global offshoring in India.

The second is the leadership of the Association itself, the resources they bring to bear on the problems of the industry, its representation and the level of internal communication with members.

The shipping industry in India, and overseas, does not enjoy the high profile accorded to the IT or manufacturing industries. This is possibly because the only value that users put on shipping services is the price they have to pay for it. It is regarded as an activity that adds cost, not value. Within shipping, the agency services industry has an even lower profile. Almost all the agencies, excepting the principal-owned entities, are family-owned small and medium enterprises, the Tatas, Birlas and the remnants of the old British managing agencies having abandoned the field by the early 1980s.

I estimate, there are presently about 400 to 450 shipping agencies all over India. This number excludes Kolkata-Haldia where the ship agents do not have an independent Association. It does not count the branch offices of agencies with all- India networks.

The agencies probably have a direct employee strength of about 35,000 people. In fiscal 2007-08, the industry handled 21,000 vessel calls in all the Major Ports and possibly about 7,000 vessel calls in the state-run ports.

Those companies that focus on containers facilitated revenue exports of 3.8 million TEUs and revenue imports of 2.7 million TEUs. In 2007-08, the industry’s income through vessel handling and cargo booking is very roughly estimated at between $190 and $220 million (Rs 780-900 crore).

So, in the overall scheme of things, we are not a very large and impressive activity. We appear to perch on a nearly invisible, unstable niche in the grand supply chain from the seller to the buyer.

However, the fact remains that 28,000 or more vessels will find it difficult to call at Indian ports without the services of agents. The agents’ impetus, however small it may be, is still required for the large and small Indian ports to handle the 700-odd million tonnes of cargo they did last year. To the ports, Customs, revenue authorities, the exporter and importer, we are the resident front end of the distant foreign shipowner.

Ship agencies are, therefore, small but important cogs in the machinery of foreign trade. In that identity, we cannot aspire to the visibility enjoyed by NASSCOM or CII. But we can certainly hope to emulate them to heighten our profile in our corner of the economy.

MANSA plays a unique role in the agency services industry. The accident of location places us in the ports that handle 113 million tonnes of India’s 700 million tonnes, and 4.2 million TEUs of the Major Ports’ 6.7 million TEUs.

Nhava Sheva also happens to be India’s first purpose-built container terminal. India’s first private terminal came up here.

The Mumbai Port handles the largest volume of break-bulk general cargo among Indian ports. The Tariff Authority for Major Ports (TAMP) is headquartered in Mumbai. Nhava Sheva is the pilot for Customs’ efforts at automation and computerisation. A large number of ship agencies have their head offices in Mumbai. All these factors place MANSA on a promontory, as it were, and give it greater visibility.

The Association also has 106 members, possibly the largest membership among all agency Associations. Thus far, it has managed to be more articulate — and, at times, more vociferous — than other agency Associations. What MANSA does and does not do, therefore, has an effect beyond the geographies of Mumbai and Nhava Sheva.

What is striking about the composition of MANSA’s Executive Committee over the last 6 years is the number of old faces that keep reappearing. Over three 2-year terms of a 12-member group, we have had 3 people dropping out and being replaced by 3 new entrants, meaning an average of 1 person being replaced per year. Such longevity is valued and rewarded only in government or in the public sector.

This is not to criticise or belittle the fine work done by each member of the Executive Committee or the group collectively. Each one of them has taken time off from his normal responsibilities to work for the association. But MANSA needs new people who can generate new ideas, attempt new approaches and execute new actions. Even if the majority of these new ideas fail, there will still be some that will succeed and the initiative will flow back to MANSA.

Many agencies, if not most of them, contact the Association when they run into problems. Most of them are appreciative of the work done by MANSA. But few of them seem prepared to come forward and share the workload. The same applies to the principal-owned entities, all of which are in the container business. Out of 106 members of MANSA, I count 24 such companies from APL to Zim. Perhaps they feel that, being owned by principals, their interests are more aligned with the shipowner than the agent.

This is far from true. It is agreed that the principal-owned agencies have greater access to their owners’ IT systems than independent agencies; that they spend large amounts of their time in meeting their KPIs, updating systems, preparing budgets and doing BVA analyses; submitting weekly, monthly and annual forecasts and reports and other activities designed to keep managers employed and busy. But, in essential functionality, they, like independent, Indian-owned agencies, remain frontline offices bridging the shipowners and the market, what may be described as the poor-bloody-infantry of shipping. MANSA needs new leaders to come forward to run the Association.

Several years ago, as an employee of a principal-owned agency, I was a member of the Executive Committee. But I did not devote much time to MANSA. I attended the meetings, spoke my piece, went to the usual official functions, but nothing much beyond that. A senior person in the shipping industry took me aside and told me that, over the years, I had benefited a lot — both as a person and as a professional — from the agency business.

The industry had made me what I am. It is only fitting that I should try to return something, the best that I can offer, to the industry. I don’t know whether what I have done has benefited the industry greatly, but I do know that I tried. The advice that was given to me applies to many young men in the business and it is to be hoped that they will respond.

The Executive Committee, that elects the President, needs to be aware of the demands placed on him. As the public face of a low profile activity, in a low profile industry, the initiative and actions of the President quite often determine the perception others have of the Association and the importance they give to it. It is an honorary position, but demands the devotion of almost all the time, attention, energy and enthusiasm of the President. He has to have a vision of what shipping in India could be years from now and the support required from the infrastructure providers to make it happen. He has to respond to each call for a meeting, some of which may be in Delhi or Chennai, quickly prepare position papers, cogently present and defend the industry viewpoint, communicate, not only with his colleagues on the Executive Committee, but also with the membership to carry them with him and show what is being done on their behalf.

He has to respond to feedback from members, explaining what can be done, when it would be done, and, at times, what cannot be done. He has to respond to valid complaints about shipping agency practices and ensure corrective action. He has to build bridges to the other Associations and strive for consensus on common concerns so that while there may be differences in approach in some matters, all participants in shipping speak with one view on key issues. With the government, he has to understand the value of repetition and have the patience to repeat what has been said many times in the past in the hope that action will finally follow. He has to remain an optimist and eschew cynicism. And much more.

MANSA has been extremely lucky thus far to have had Executive Committees and Presidents that have responded positively to these demands. But there is no guarantee that the past will automatically replicate itself in future. The general membership of MANSA, by renewing the Executive Committee, and the Committee itself, by choosing the best and the brightest among them to be President, have to consciously and diligently work to achieve success.

(The author, President of Seaworld Shipping & Logistics Pvt. Ltd, is the immediate past-President of MANSA. The views expressed here are his own and not necessarily those of MANSA, or of The Link.) 

NEWS BRIEF

DCI to charter dredger on KoPT’s behalf

The Kolkata Port Trust (KoPT) will soon acquire on charter a dredger to expedite dredging in the Hooghly. The Dredging Corporation of India (DCI) will do the chartering on behalf of KoPT.

This was decided at a high-level meeting attended by Ministry of Shipping (MoS), DCI and KoPT officials, including the Chairman of KoPT, Dr A.K. Chanda, the Deputy Chairman of Haldia Dock, Mr Rajeev Dube, the Director of marine, Capt. A.K. Bagchi, and other senior officials recently.

The decision follows fears of closure of the Haldia Dock as the draught situation in the Hooghly near the Dock was steadily deteriorating.

Also, steps will be taken to speed up repair of two of the three DCI dredgers. 

Third shipyard at Hazira on ABG’s agenda

ABG Shipyard proposes to set up a greenfield shipyard at Hazira, near its present facility, entailing an investment of Rs 1,200 crore. The new shipyard is expected to be operational in three years.

The proposed shipyard will cover 300 acres and will be the largest of its two other existing facilities at Surat and Dahej in Gujarat, an ABG Shipyard official, Mr Dhananjay Datar, said.

"The new shipyard will cater to larger ships and offshore vessels. It will have a capacity of building six to eight ships a year", Mr Datar elaborated.

The company hopes the new shipyard will generate revenues of over Rs 2,000 crore a year.

ABG builds bulk carriers, deck barges, interceptor boats, anchor handling supply ships, driving support ships, tugs and offshore vessels. 

Kalmar Industries, part of Cargotec Corporation, has made an agreement to acquire Equipos y Servicios para Terminales y Puertos SRL (ESTP)—its dealer representative in Argentina, Uruguay and Paraguay. The move will not only strengthen Kalmar’s distribution network, but also reinforce its strong service ethos of being closer to customers, enabling it to offer a superior level of support.

The parties have agreed not to disclose the transaction value. 

APL’s unit, APL Logistics, has announced the expansion of coverage of its OceanGuaranteed service, which is the world’s first time-definite container consolidation shipping service jointly operated with the US-based trucking company, Con-way Freight.

The upgraded service will add south China city, Guangzhou, to its list of ports of origin and Montreal, Toronto and Vancouver as new destinations in North America. Guangzhou will be the service’s first call in Asia, while the three Canadian cities will be its first destinations outside the US.

The service was first launched in 2006 and still is the only time-definite container consolidation shipping service in Asia. It promises to refund if cargo is not delivered on time and offers a price that is 25 per cent lower than air rates. 

NYK Line has announced the deployment of its own vessel in the Indian Subcontinent East Coast Express (IEX) service, also known as IndAmEx service, from last month.

Since July 2007, NYK has participated in this service through a slot-charter arrangement with Hapag-Lloyd. The addition of the NYK vessel will allow the company to better meet the customers’ strong demand for space in the fast-growing market, highlights a NYK release.

The upgraded service will offer a fixed-day, weekly schedule using seven vessels of 4,000-TEU, one of which will be provided by NYK.

The port rotation is as follows: Port Muhammad Bin Qasim (Thu/Fri), JNP (Sun/Mon), Mundra (Tue/Wed), Damietta (Tue/Wed), New York (Sat/Mon), Norfolk (Tue/Wed), Charleston (Thu/Fri), Port Said (Wed/Thu), Jeddah (Sat/Sat), Port Muhammad Bin Qasim. 

China-wide box throughput up by 17 pc in H1

The ports of China reportedly handled 61.4 million TEUs during the first half of this year (January-June 2008), an increase of 17.1 per cent over the same period of last year.

Overall tonnage lifted by these ports rose by 15.5 per cent to 2.95 billion tonnes. Foreign trade cargo volume went up by 11.4 per cent to 990 million tonnes.

Container throughput at seaports increased by 16.6 per cent to 56.98 million TEUs. Tonnage handled rose by 14.9 per cent to 2.18 billion tonnes. Foreign trade cargo volume was 916 million tonnes, up by 11.6 per cent.

Essar Shipping acquires 2 Supramax vessels

Essar Shipping Ports & Logistics Ltd (ESPLL) has added two Supramax dry bulk carriers to its fleet, the m. v. Malathi and m. v. Malavika, both dedicated to carry three million tonnes of coal over a period of five years.

These vessels— m.v. malathi and m.v. Malavika —were both built in Japan in 2005 and 2004, respectively. 

Visakhapatnam Port has established a new single-day record of unloading diammonium phosphate (DAP) in bulk.

A quantity of 16,158 tonnes, with a gang shift output of 1,243 tonnes of DAP in bulk, was discharged on August 17 from the vessel m.v. Lake Harumi at East Quay-7 berth. This surpasses the previous best discharge record of 15,278 tonnes. 

Dedicated pipeline to link New Mangalore Port to SEZ

The Mangalore SEZ Ltd (MSEZL) has decided to set up a dedicated road-cum-pipeline corridor to New Mangalore Port (NMP) to ensure smooth supplies of crude oil and other liquid fuel to industries in the export zone.

The dedicated corridor would stretch some 13 kilometres, right from NMP to the farthest corner of the SEZ.

Such an exclusive pipeline corridor would not only minimise tanker movement from the Port to the SEZ, but the facility would also not erode the public infrastructure.

Pipe racks would be laid along the corridor, and those companies which put up their units within the SEZ could even lay their own pipeline. 

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