Category Archives: Shipping

Believing the Budget 2019-20 as an ongoing task reiterating the commitments that the NDA Government has set in its vision document, S Ramakrishna, Chairman, FFFAI, says, “It is commendable the new Finance Minister presented a pragmatic Budget aiming to reach the US$ 5 trillion economy in the next few years, with required emphasis and focus on infrastructure, multimodal connectivity and logistics operation. Significantly, the government has decided to create and promote inland waterways and allied infrastructure to reduce logistics cost and boost greener environment.” It is heartening to note that after recently launched multimodal terminal at Varanasi, more similar terminals will be completed at Sahibganj and Haldia and a navigational lock will be created at Farakka by 2019-20 FY. We will be expecting more such terminals in North East India as well, like strengthening the existing terminal in Pandu (Guwahati) and new one in Jogighopa which is very strategic region from foreign trade’s perspective utilizing effective multimodal connectivity with special thrush on waterways. It would be very crucial to expedite international cargo movement to Bangladesh and beyond. Also, it is commendable the Finance Minister emphasized on resolving all litigations on fast track basis to facilitate trade and commerce. Commenting on the focus given by government to MSMEs, Ramakrishna, says, “Since predominantly we are from MSME sector, this funding would be a great boost for us.”

“India is set to become a $3 trillion economy this year and it is well within its capacity to reach the $5 trillion economy by 2024,” says Nirmala Sitharaman, Finance Minister, Government of India, while presenting the annual Budget. The Budget says that the government will examine steps to hike FDI cap in aviation. Government envisions using river for cargo transportation which will also decongest roads and railways. “The movement of cargo on Ganga is estimated to rise four times in four years,” informs Sitharaman. GST processes will also get simplified further. The government has given massive push for physical infrastructure too. 125,000 km of road to be upgraded over next five years at a cost of Rs 802.5 billion. To ensure the creation of National Highways Grid of desirable capacity, comprehensive restructuring of National Highways Programme will be done. Railway infrastructure would need an investment of Rs 50 lakh crore between 2018 and 2030; PPP to be used to unleash faster development and delivery of passenger freight services, says Finance Minister. “Will simplify procedures, reduce red tape, make best use of tech,” says Sitharaman, in adding, “Building social infrastructure, digital India, Pollution-free India and Make in India are government vision.”

“India’s containerised exports with the world witnessed a stable growth of six per cent in the first quarter of 2019 propelled by robust performances in refrigerated cargo, engineering and pharmaceutical sectors, while imports declined slightly in the same quarter registering a market growth of -2.2 per cent in Q1,” states the Maersk India Trade Report Q1 2019. The import demand was buoyed by pharmaceuticals, metal, appliances and kitchenware, paper, chemicals and fruit & nuts, mainly from northern Europe, South Asia, China, and Russia. Exports were driven largely by the East and West of India, which contributed double digits to the growth, with commodities like plastic, rubber, textile, vehicles, and vegetables as the key drivers. Steve Felder, Managing Director, Maersk South Asia, said, “Considering the tensions in the global trade environment, we are off to a positive start to 2019 on exports, and the market is expected to strengthen. Indian exporters today are expanding their geographical range and product diversification, with a visible shift towards higher value-added manufacturing and technology-driven items. Exports have remained strong even as the rupee appreciated against the dollar, which shows a strong demand for Indian exports.”

Mansukh L Mandaviya has been appointed as Minister of State, Ministry of Shipping and Minister of State, Ministry of Chemicals & Fertilisers. The former Minister of State in charge of road transport and highways, shipping, and chemicals and fertilisers, has been a familiar sight in the last five years. Mandaviya is a Rajya Sabha member from Gujarat. He has also been member of various parliamentary committees such as that of the petroleum and natural gas, chemicals and fertilisers, Select Committee of Rajya Sabha on the Real Estate (Regulation and Development) Bill 2013, and National Welfare Board for Seafarers.

Nitin Gadkari, in the new cabinet appointments, will continue to handle Ministry of Road Transport & Highways, while also handling the Ministry of Micro, Small & Medium Enterprises (MSMEs). The minister has been credited for smooth construction and operation of bridges, flyovers and expressways in the previous cabinet. He is also known to have played a significant role in the implementation of the Pradhan Mantri Gram Sadak Yojana. Gadkari earned his spurs as PWD minister in Maharashtra, by delivering the Mumbai-Pune expressway and 55 flyovers in Mumbai.

The three nations will sign a Memorandum of Understanding in the coming months for the east container terminal, located at the newly expanded southern part of the Port of Colombo, to deepen it and develop a facility to allow large container ships to enter. The nine-year-old Hambantota port in southern Sri Lanka, with almost no container traffic and trampled fences that elephants traverse with ease, has become a prime example of what can go wrong for countries involved in China’s Belt and Road Initiative. Sri Lanka has been one of the countries drawn to the Belt and Road, an ambitious plan announced in 2013 by President Xi Jinping to build an estimated $1 trillion of infrastructure to support increased trade and economic ties, and further China’s interests around the globe. One project in the country includes Port City Colombo, being built by China Communications Construction. The plan envisions a financial district — pitched as a new hub between Singapore and Dubai — with a marina, a hospital, shopping malls, and 21,000 apartments and homes.

Adani Ports and Special Economic Zone (APSEZ) will set up its first container terminal outside India in Myanmar, at an estimated cost of $290 million (over Rs 2,000 crore). The company has signed an agreement to develop and operate a container terminal at Yangon Port in Myanmar. The terminal will have a capacity to handle 0.80 million TEUs (20-foot equivalent unit) of containers. The estimated cost for implementing phase-I of 0.5 million TEUs is between $220-230 million, and the phase-II expansion to 0.8 million TEUs is expected to cost between $55-60 million. The investment is in line with APSEZ’s strategy to have a footprint in Southeast Asia and expand the container terminal network. Construction for phase-I of the project will commence next month and will be completed by June 2021. The terminal will be integrated with APSEZ ports/terminals along the east and south coast of India, unlocking synergies by offering multiple entry and exit points for shipping lines.

With a focus on unblocking bottlenecks and capitalising on opportunities, PHD Chamber of Commerce organised the ‘National Maritime Conclave-2019’ in New Delhi. The conclave was graced by the presence of N Sivasailam, Special Secretary (Logistics), Department of Commerce, Ministry of Commerce & Industry, Government of India, Dilip Kumar Gupta, Managing Director, Sagarmala Development Company and V Kalyana Rama, Chairman & Managing Director, CONCOR along with the industry professionals. Being a moderator of the session themed ‘Port modernisation & multi-modal transportation system’, Pawanexh Kohli, CEO, NCCD, Ministry of Agriculture & Farmer Welfare, Government of India, said, “As an industry, we must all try to make logistics more productive. Increasing port capacity to cater to the growing traffic will automatically bring down the cost of operations and per unit cost of goods handled. The mindset, however, needs to be changed in terms of being productive for the same cost. For instance, we can increase our capacity utilisation which should be done with greater operational efficiency.” He added that the industry must speak to the government about turnarounds to help them become more productive.

Jawaharlal Nehru Port Trust (JNPT) has undertaken dredging of its navigational channel from 14 metres to 15 metres, allowing for larger vessels of up to 12,500 TEUs to berth at the port. Apart from increasing the depth of the channel, the dredging project also includes increasing the width from 370 m to 450 m, and increasing the channel length by two kilometres, taking it to 35.5 km. This strategic development has been made keeping in mind the global market trend of deploying larger vessels to carry more consignments at a time. Sanjay Sethi, Chairman, JNPT, says, “Our focus is reducing the transaction cost and time for the EXIM trade; dredging of the navigational channel is one of the most important initiatives towards it. Trade will benefit through optimal utilisation of capacity, saving on vessel waiting time, faster turnaround of larger vessels, and incremental regional economic development and spin-off economic benefits.”

By delivering it’s first-ever shipment of butter from Bulandshahr, Uttar Pradesh (part of the Delhi National Capital Region) to Turkey, Maersk has opened a niche cargo category encouraging the shipping of an array of commodities within the reefer segment. Butter exporter VRS Foods exported an initial six containers of their brand, Paras Dairy Butter, through Maersk’s First Mile Delivery reefer service which helps businesses with intermodal, customs clearance, and documentation needs to enable seamless trade. This. Commenting on this end to end delivery story, Steve Felder, Managing Director, Maersk South Asia, states, “We believe that India’s trade growth lies in our hinterlands. Most of the small and medium enterprises and traders who engage in trade with this segment often face connectivity and infrastructural challenges limiting their scope for growth. Limited cold-chain infrastructure is one of the prominent factors that lead to the loss of produce. Through our endeavour with Paras Dairy and VRS Foods, our assurance was to provide them with an efficient logistics partner, and in doing so, we can now look to win the confidence of other exporters, given that we can successfully handle end-to-end logistics of refrigerated cargo for all proof of delivery.”