Port and Shipping Management

Introduction to Indian Shipping Industry

The Indian shipping industry plays an important role in the Indian economy with almost 90% of the country’s international trade conducted by the sea.

India has the among the developing countries and is ranked 15th in the world with a shipping tonnage of around 11,5 million gross tonnage in 2011.

Today, India has around 1172 ships with 862 coastal and 350 overseas ships. Indian coastal shipping is highly fragmented.

The top 9 companies account for nearly 70% of the total fleet by Dead Weight Tons and in terms of number of ships, the top 9 companies only have a 20% share of the fleet. Many companies own just 1 or 2 ships.

The Indian shipping industry consists of around 31 major shipping companies with Shipping Corporation of India (SCI), the largest public sector enterprise being the largest in the country.

Introduction to Indian Port Industry

India’s long coastline of over 7,500 km is home to the country’s 13 major ports1 and around 200 non-major ports located along the western and eastern corridors. While the number of non-major ports is large, only about one-third of them undertake regular commercial operations; these ports are located mainly in Gujarat, Andhra Pradesh, Goa, and Maharashtra. Since the last decade, the Indian port sector has been witnessing certain structural changes, with state monopoly (viz. the major ports) gradually giving way to greater private sector participation in port investment activity.

The change is being driven by several factors, including the large investments required to scale up port capacity, besides the need to improve service levels and efficiency. Private participation in ports is also being facilitated by an open policy regime (which, inter alia, allows 100% FDI investment in port projects and provides taxation benefits to players investing in port infrastructure) and the prospects of robust returns on investment, given the favorable long-term outlook for the sector.

The trend is expected to gain traction with the major ports increasingly moving to a landlord/asset ownership model, allowing the private sector a dominant role in capacity additions and port services and operations. Further, considering the criticality of the port sector to overall economic growth and to bring about an orderly development of the sector, some regulatory and policy initiatives have also been taken of late, the most notable being the National Maritime Agenda 2010-20 and the Draft Port Regulatory Authority Bill, 2011

Companies in Port and Shipping Market

Given below are the list of best Shipping Companies in India. There are a sufficient number of Shipping companies in India. There are a number of opportunities in the shipping companies. There are a number of initiatives and projects intended in the present time have been able to fully consolidate the Shipping industry. Most of the Shipping Companies have pioneered in being vanguard institutions that provide the best and most sophisticated vessel and shipping rudiments. Most of these companies are also engaged in providing services like sea paths which is an important. This is an important and at the same vitals sector of the Indian economy and also an emerging sector because of the natural geographical disposition of the coasts.

Names of a few leading organizations of the sector:

Abg Shipyard Ltd, Bharati Shipyard Ltd, Chowgule Steamships Ltd,Dredging Corporation India, Essar Shipping, Global Offshore Services, Great Eastern Shipping Company, Great Offshore Ltd, Pipavav Shipyard Limited, Shipping Corporation of India

Initiative by Government

The Government of India has undertaken the expansion and modernization of ports on a priority basis as part of its initiatives in the up gradation of India’s infrastructure achieving the targeted growth rate. The government has initiated numerous plans, which includes; Formulation of a National Maritime Development Policy to facilitate private investment, improve service quality and promote competitiveness, and US$ 11.33 billion has been allocated for the same.

An investment of more than US$ 9.07 billion will be made by 2015 for 111 Shipping Sector Projects.

In 2008-09, the Ministry of Shipping is going to launch 10 major expansion projects at an estimated investment of US$ 1.06 billion, 60% of which is allocated for the Chennai mega container terminal.

Permission for 100 per cent foreign direct investment (FDI) for port development projects under the automatic route.

100 per cent income tax exemption is provided for a period of 10 years for port developmental projects.

Opened up of all the areas of port operation for private sector participation.

Initiative by Government contd….

Increase in the rail connectivity of ports with the domestic market. The experience of operating berths through PPPs at some of the major ports in

India has been quite successful. It has, therefore, been decided to expand the programme and allocate new berths to be constructed through PPPs. A model concession agreement is being formulated for this purpose.

The Government has also decided to empower and enable the 12 major ports to attain world-class standards. To this end, each port is preparing a perspective plan for 20 years and an action plan for seven years.

A high level committee has finalized the plan for improving rail-road connectivity of major ports. The plan is to be implemented within a period of three years. Further, changes in customs procedures are being carried out with a view to reducing the dwell time and transaction costs. The government has also delegated powers to the respective Port Trusts for facilitating speedier decision-making and implementation. At the same time, several measures to simplify and streamline procedure related to security and customs are been initiated.

The National Maritime Development Programme is expected to bring a total investment of over Rs.50,000 crore in the port infrastructure. Such improvement in the scale and quality of Indian port infrastructure will significantly improve India’s competitive advantage in an increasingly globalized world.

SWOT Analysis of the Indian shipping Industry Strengths

Strengths India has access to two major shipping routes • More than 7500 km coastline including the island territories • Wide spread ports and workable merchant fleet • Fleet expansion by major domestic shipping companies • Sustained rise in the volume of exports with revival growth in the manufacturing sector • Large number of Indian sea farers • More than 1 billion citizens to drive the import demand

Weaknesses • Due to underinvestment in the India’s maritime sector has affected the development of ports in the country • Inefficient judiciary system slow development of new port infrastructure • High levels of bureaucracy preventing the government funding from developing the new port projects in

the country • Tax structure not allowing the Indian manufacturers to be competitive <Think this is an argument Indian

exporters are using in lobbying rather than being a fact>

Opportunities • Indian shipping companies having acquisitions with foreign shipping companies • More than US$4bn is expected to be invested in India's port sector. • New major container terminals being developed at the port of Chennai and Mumbai • Cargo volumes are expected to grow with an average of 16.5% year on year in the coming 5-10 years. Threats • Major developments taking place in Sri Lanka's port sector may reduce demand for transshipment services

at Southern Indian ports. • A government tax on iron ore exports may lead to a fall in bulk shipments at major export terminals. • India's ports have suffered from congestion during 2011, potentially slowing the country's growth

trajectory.

Areas

1. Public/Private Ports2. Transportation companies3. Freight Forwarders4. Government Agencies 5. Shipping and Liner companies6. IT companies7. Management Consultancies8.Custom houses9. ICD’s/ CFS

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