Forwarders on the hook for millions following Debenhams collapse
Garment factories are demanding millions of dollars from a forwarder, following the collapse of the ...
TSLA: NOT ENOUGHBA: NEW LOW AS TENSION BUILDSGXO: SURGINGR: EASY DOES ITDSV: MOMENTUMGXO: TAKEOVER TALKXOM: DOWNGRADEAMZN: UNHARMEDEXPD: WEAKENEDPG: STEADY YIELDGM: INVESTOR DAY UPDATEBA: IT'S BAD
TSLA: NOT ENOUGHBA: NEW LOW AS TENSION BUILDSGXO: SURGINGR: EASY DOES ITDSV: MOMENTUMGXO: TAKEOVER TALKXOM: DOWNGRADEAMZN: UNHARMEDEXPD: WEAKENEDPG: STEADY YIELDGM: INVESTOR DAY UPDATEBA: IT'S BAD
With its privatisation plan in limbo, Shipping Corporation of India (SCI) is making a renewed pitch to pump up its sagging container profile in the long-haul trades, according to industry sources.
The national carrier – of which the government owns 63.75% – was put on the block in 2019 as part of a larger government divestment programme, but the process has been painfully slow because of regulatory and due diligence hiccups. And there are no definite indications when it will be completed.
The uncertainty seems to have prompted SCI to redraw its business strategies. Sources believe that the carrier is close to striking a vessel-sharing deal with one of the premier networks on the India-US east coast trades, such as ONE’s upcoming standalone WIN service, or the Indamex consortium, led by Hapag-Lloyd and CMA CGM.
“Discussions are at an advanced stage,” an informed source told The Loadstar. “We expect an announcement in a month or so.”
The move comes after SCI received government approval to upgrade its fleet by way of second-hand ship acquisitions, including a containership of some 10,000 teu capacity. With an ownership change on the horizon for some time, the company had been hesitant to acquire new tonnage to replenish its aging fleet of mostly crude and bulk carriers.
Due to begin in May, ONE’s weekly WIN will perform a rotation of Karachi, Hazira, Nhava Sheva, Mundra, Damietta, Algeciras, New York, Savannah, Jacksonville, Charleston, Norfolk, Damietta, Jeddah and Karachi.
Check out this clip about the alliance shake-up
From TPM24 – Mike Wackett and Gavin van Marle speaking to host Mike King
Notably, the public carrier was a junior partner in the original Indamex consortium that took shape in 2000, with CP Ships (acquired by Hapag-Lloyd in 2006) and CMA CGM the lead vessel providers at the time.
According to available information, the only long-haul presence for SCI is through some slot arrangements with MSC on the Himalaya Express (HEX), between West India and Europe.
SCI has reported strong results in recent years, powered in large part by its liner activity, albeit being relegated to a shortsea or feeder vessel operator, as container freight rates moved up, thanks to pent-up demand during Covid and, more recently, the Red Sea crisis.
Ironically, local exporters, upset over soaring costs, have been pressing the government to actively consider establishing a home-grown container line to aid the trade now dominated by foreign carriers.
“A 25% share by the Indian shipping line can save $5bn annually,” said the Federation of Indian Export Organisations recently. “The Indian private sector may be engaged to develop such shipping lines, and this will reduce arm-twisting by foreign shipping lines, particularly of our micro small-to-medium enterprises.”
SCI’s reported interest is another sign that carriers are generally looking to capitalise on expected India trade growth driven by sourcing shifts from diversifying supply chains.
The sale of Air India to Tata in early 2022 was a big boost for New Delhi’s divestment efforts designed to revive public sector units considered uncompetitive or unprofitable and a drain on the taxpayer, stepping up liberalisation of the economy.
You can contact the writer at [email protected].
Comment on this article