SCI-Chennai
Photo: SCI

Shipping Corporation of India (SCI), India’s only long-haul liner operator, is attempting to regain lost ground as the country’s export potential brightens amid the trade diversification in Asia.

The 63%-state-owned carrier wants to acquire up to six second-hand containerships, from mid-size to ultra-large, to beef-up operations that have been severely constrained due to tonnage problems and government divestment strategies.

The move comes after the national carrier added one 9,000-teu ship to the India-Europe trade, a market in which it had been in partnership with MSC for some time.

SCI’s acquisition requirements include 12,000-18,000 teu vessels no older than 15 years – which gives rise to market speculation that the carrier was weighing options to join the India-US east coast trade via a VSA deal with one of the shipping networks, ONE’s standalone WIN service ablikely bet.

WIN sailings have been wobbly, however, due to a shortage of capacity necessary for a weekly rotation.

Indeed, tonnage availability has been a major industry concern thanks to the Red Sea-linked diversions from the Suez Canal. However, a return to canal transits following the recent Israel-Hamas ceasefire could free-up considerable tonnage for charter or purchase.

Of late, Indian trade policymakers have been under tremendous pressure from exporters to overcome various supply chain challenges, as foreign mainline carriers have a near monopoly in the market. Trade bodies contend that Indian exporters are always on the receiving end of high freight charges and vessel space unpredictability, as supply-demand equations alter.

The Federation of Indian Export Organisations (FIEO) noted recently that if the flag-carrier liner could gain a bigger share of the India trades, it would “reduce arm-twisting by foreign shipping lines, particularly of our micro-small-to-medium enterprises”.

Its refocus on the container shipping market, albeit on a limited scale, seems to have yielded some profit gains for SCI, according to the latest earnings report, which shows the carrier ended H1 of fiscal 2024-25 with a 145% increase in net profit. And income from liner operations soared to some $60m, from $34m in the previous H1 period.

However, much of SCI’s liner goals could depend on its ability to recreate consortium partnerships with the major carriers, as standalone operations are typically a difficult task.  And its box trade push comes as ocean rates continue to move south, with expectations of a sharper collapse with Red Sea shipping resumption.

SCI was offered for sale in 2019, as part of New Delhi’s broader divestment programme intended to raise additional resources and monetise underperforming public assets.  But the process has been painfully slow because of regulatory and due diligence hiccups, with no concrete timeline to when SCI would be fully privatised.

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