Week ending September 19, 2002

News on Shipping

IPBCC members increase bunker surcharge The shipping companies under the India, Pakistan, and Bangladesh Ceylon Conference (IPBCC) have raised the bunker surcharge from about US$35.0 to US$70.0 per TEU with effect from October 1, 2002. The shipping lines of IPBCC would henceforth quote an all-inclusive rate of US$ 900-1050 per TEU on India-UK sector. However, the non-IPBCC lines are currently quoting lower at US $ 750.0 - 900.0 per TEU in the same sector.

Seized Indian Cargo vessel on sale in Bangladesh The Bangladesh government has ordered the sale of the Indian ship seized by the Bangladesh port officials. The ship was allegedly carrying 8.325 tonnes of rice, which was unfit for human consumption. The Bangladesh government has black listed the company that sent the rice and also the shipping firm that carried the cargo. As neither the company officials nor the ship owner could be traced, the Bangladesh government decided to invite tenders to sell the ship to recover its financial losses.

China Shipping to build box terminals in China and LA The China Shipping (Group) Company has plans to build five container terminals in China and one in Los Angeles. The new container terminals are expected to increase the firm's handling capacity by almost four times to about three million TEUs. Once the terminals are ready, the firm proposes to transfer the ownership of its port facilities to its Hong Kong subsidiary, China Shipping Development.

Foreign partner equity in SCI restricted to 25% The Union government has stated that SCI bidders can tie up with a foreign partner but the maximum equity the foreign partner can hold is only 25% to begin with. The successful bidder if enters into a consortium with a foreign company should incorporate the foreign company as a special purpose vehicle (SPV). The foreign company can also increase its equity by another 20% by way of public offer made by the new owner. Meanwhile, the government has also ruled that a minimum of 51% equity in SCI should continue to be in Indian hands for at least three years after its disinvestment.

Detention of Indian ships worries INSA The increasing incidents of detention of Indian ships at the foreign ports due to poor maintenance has become a major concern for the Indian National Shipowner's Association (INSA), National Union of Seafarers of India (NUSI) and the Forward Union of Seafarers of India (FUSI). Few Indian ships were detained at the foreign ports due to structural defects and poor maintenance, which has brought a bad name to the country. Hence the Shipowners' and seafarers' forums have requested the Indian seafarers to ensure that the country's image is not tarnished through further Port State Control (PSC) detentions of the Indian vessels.

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News on Ports

P&O ports posts losses in first half of FY 2002 Britain's Peninsular and Oriental Steam Navigation Co. (P&O) has posted a loss in the first half of the FY 2002. The company officials stated that they would reduce their stake in the joint venture that caused the loss. Despite losses from the container shipping company P&O Nedlloyd, earnings from the core business were better with their revenues from the Asian ports being considerably good. The company expects more growth in their business in the Asian regions during the next few years.

China's Shenzhen Ports achieve record box traffic The ports of Shenzhen in China recorded the highest traffic in the month of August of FY 2002.As the exports from China to the US and Europe began to rise, the container traffic in the Chinese ports began to increase rapidly. There was a significant rise of about 11% in the container traffic at the Shenzhen ports in August 2002, as compared to the traffic in July 2002. There is also a rise of about 51% in the containers handled in first eight months of FY 2002, as compared to same period in FY 2001. Meanwhile, the container throughput at the Hong Kong port also showed improvement in August 2002.

VPT and VCTPL to sign pact The concessional licensing agreement between Visakhapatnam Port Trust (VPT) and Visakha Container Terminal Private Limited VCTPL (formed as a joint venture of United Liner Agencies ULA and Dubai Port Authority DPA) was signed at Visakhapatnam on 10th of September 2002. According to the agreement, the VPT would make available its 450.0 m long berth in the outer harbour to VCTPL on a 30-year lease to develop a new container terminal. The VCTPL would begin installation of its equipment after VPT makes the berth available to them, which is expected to take another three weeks.

Increased food grains export at Kandla The new facilities in the exports and productivity-oriented berthing policy has helped Kandla port to increase its food grain handling significantly. The port has also started providing free storage facilities for export cargoes up to 15 days. With incentives like these the port aims at setting a record in food grain handling by the end of 2002.

JNPT releases list of rates and discounts at its shallow draft berth The Jawaharlal Nehru Port Trust (JNPT) has released a list of details regarding the rates, rebates and discounts for handling of containers and other cargo at the shallow draught berth, Port draft berth and Port craft jetty. The port has offered discounts on berth hiring, rebate on container handling charges and free parking for Port customers. On the other hand a service charge of Rs 10 per mt will be collected for handling bulk cargo. Meanwhile, the port has ruled that all geared vessels would be berthed/handled only at the shallow draft and port craft berths.

Importance of ports highlighted Mr. B. Sridhar, chairman of the port group of the Confederation of Indian Industry (CII), Southern Region has highlighted the significance of ports in India's economic growth. Comparing the Indian economy with that of China, Mr. B Sridhar has said that Indian economy is demand driven while latter is supply driven. He emphasized on the importance of infrastructure in reducing the transit cost of the product. He said that the prices of port-related services should be determined by the market forces and not by the regulators.

WSC warns US of traffic diversion to Canadian ports The Washington-based World Shipping Council (WSC) has cautioned the US that its "24-hour rule" could cause a significant diversion in the US-bound traffic to the Canadian ports. According to the 24-hour rule, all the US bound cargo must be filed 24 hours before the containers are loaded on to the vessels at all foreign ports. This would delay international commerce and significantly increase carrier and shipper costs. To file the cargo 24 hours before loading in a foreign port requires the shippers to provide carriers with cargo documentation about 24-72 hours earlier. Instead, the shippers would prefer to divert their ships to the Canadian ports where the custom regulations follow conventional industry norms.

Vietnam to build a port and a shipyard The Vietnam government has proposed to build a port and shipbuilding facilities in the central Vietnam. The port would be built at Dung Industrial Park. The proposed project is expected to be completed by 2010. The project would cost about US dollars 400.0 million. The port is expected to handle about 12.9 million tonnes of goods by 2005.

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News on Logistics

Assocham calls for developing an integrated logistics network The Associated Chambers of Commerce and Industry has urged the government to set up an integrated logistics network for better integration of the Indian transport network. Assocham suggests corporatisation of the ports for efficient use of port equipment and removal of draft limitation. To resolve the differences between the major and minor ports Assocham has also sought extension of the regulatory powers of the Tariff Authority for Major Ports (TAMP) for minor ports as well.