Thursday, 15 January 2009

Industry snapshots

Shipping industry unhappy at Ministry of Shipping’s year end review. Many industry players were hopeful of bolder government initiatives to tackle the ongoing downturn. It is felt, however, that the MoS has produced no new ideas in the review, which seems to be a simple compilation of measures already announced. These include previously announced plans to promote new shipyards, seafarer protection initiatives, the establishment of an Indian Maritime University, a National Maritime complex and other shipping policies, including the elevation of SCI to ‘Navratna’ status. The maritime industry was expecting much more from the MoS in the present vicious market conditions. Major companies have slowed down their expansion plans as plummeting freight and asset prices continue to plague the market. Ports are reporting lower volumes and shipyards are facing the possibility of increased cancellation of orders. The malaise has now spread to other sections of the industry, and many analysts feel that much more needs to be done to ensure that the Indian shipping industry comes out of this recession without being severely hit. It was just a few months ago that Indian ship owners were on a fleet acquistion spree. The Economic Times reports that Indian tonnage ended close to flat for the year, at around 9 million GT. The paper also quotes an anonymous shipping company executive as saying that “Simply enumerating the initiatives would not help the industry to tide over the present crisis it is engulfed in.”

Dubai Maritime City on track. The 2.2 million sq/m purpose built maritime centre is reported to be on schedule to be completed in 2012. Well over three quarters of the work is complete. When finished, the centre will boast of industrial and academic clusters besides harbour offices and residences. The Maritime City aims to become the Middle Eastern maritime hub, and says that it is talking to global industry participants to ensure broad based shipping service availability in Dubai in the next few years. Director Khaled Meftah is upbeat, saying, “We are pleased to announce that despite the challenges, the progress of Dubai Maritime City is well on track. Real estate developers are starting to mobilise on some plots, which is a significant development, and takes us one step closer to creating a regional maritime hub that will complement Dubai’s expected emergence as one of the world’s most competitive maritime clusters.”

More than 200 container ships without cargo, says US Journal of Commerce Online,
quoting Paris based AXS Alphaliner. These include six ships between 7,500 and 10,000 TEUs
and 19 from 5,000 to 7,500 TEUs. As freight and hire rates tumble and trade shrinks, things could get worse, analysts say. Falling demand in the US is reportedly a large factor. Some major players in the container trade are already looking at vessel sharing arrangements seriously in an attempt to handle the crisis. Within India, too, JNPT and ICD’s, particularly in Delhi, have apparently registered drastically lower volumes.

Meanwhile, Indian exporters are alarmed at the present situation with buyers cancelling orders. “The year 2009 is going to be the worst year in the history,” says Mr. A. Sakthivel, president of the Federation of Indian Export Organisations. Exporters don’t have orders beyond January and if the present trend continues, there will be approximately 10 million job losses.” This alarming figure represents about a fifteenth of the workforce employed by exporters in India. Many of these are casual employees on daily wages. Gulf News reports that the Indian economy is expected to grow at the slowest pace in six years in the present financial year. “The slowdown phase will continue for some months,” it quotes N.R. Bhanumurthy, an economist at the Institute for Economic Growth in New Delhi, as saying.

A half dozen pirates drown as Sirius Star released by pirates. Vela international has confirmed that the Saudi supertanker has been released by Somali pirates. The ship was hijacked in November with 2 million barrels of crude and a crew of 25, all of whom have been reported safe by Vela. The original ransom demand of 25 million dollars was whittled down to 3 million, unconfirmed reports suggest. Meanwhile, AFP and Reuters independently report that up to a half dozen pirates may have drowned fleeing the VLCC when their overloaded boat capsized in rough weather. Pirates' associates told the news agencies that there was a dispute about spilitting the ransom before the incident. Part of the ransom had also reportedly been lost in the capsize.


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