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According to the trade acute scarcity of Indian mainline vessels has acted as a dampener on coastal movement

Mr Arul Augustine Joseph, Director, UNICORN Maritimes India Private Limited is part of the Unicorn group a leading steamer agent based in Chennai. The group had recently pioneered a National Award Scheme for the Officers and Engineers of the Merchant Navy.

At a glittering function held in the city last October, the group had honored the doyens of the industry from all over the country. Amidst his busy schedule Mr Arul Augustine Joseph agreed to talk to Sagar Sandesh on major issues concerning the Shipping and Port Industry.

Brief summary of the Interview

The global shipping industry which went through bouts of recession during the last eight years saw the consolidation phase through merger of shipping lines last year. While the advantages of the exercise cannot be immediately assessed it could lead to competitive freight rates and increase in container volumes.

In comparison the bulk cargo industry witnessed less volatility in the shipping market and is expected grow steadily till 2019.

He agrees with the leaders of the industry in southern India that railway infrastructure from central Indian cities to east coast ports should be strengthened like the infrastructure the railways had created between north Indian cities and west coast ports in Gujarat and JNPT.

The recent government decision seeking to remove the restrictions on foreign flag vessels claim to coastal traffic could go a long way in stepping up coastal shipping in the country.

On the competition the Chennai port faced from the private ports situated in the vicinity he said the port suffered a serious set-back when the Madras High court banned the handling of coal cargo. Since then some bulk cargos have also left the port. The sad part is that some shipping lines have shifted their operations to nearby ports.

The delay in completion of the elevated corridor project from Chennai port to Maduravoyal has cost the Chennai port dearly. Now the project is expected to be completed in three years and benefits would definitely accrue to the port thereafter. Chennai port should restart bunkering in the anchorage taking advantage of the calm seas in the area. Cruise shipping is another area which can earn revenue to the port. The port should also seek legal remedy to restore coal handling.

Exclusive interview to Sagar Sandesh

  Sagar Sandesh: What is the shape of the shipping industry after mergers in Global Shipping Companies? Has it recovered from the 8 year old recession? Has the freight rate started going up on the back of increased container volumes? Expected trend of the industry in the coming years?

 Mr. Arul Augustine Joseph: Shipping Companies faced unpleasant market trends and situations in 2015 and 2016 globally. Mergers and alliances are considered to be channels of survival statistics which might also help them gain competitive advantage in business globally. Global Shipping witnessed major mergers in 2017 and advantages of mergers amongst shipping lines and companies are yet to be discovered in 2018.The results are expected to be realized in the coming years only. Mergers and alliances can also sustain competitive rates and increased container volumes in near future.  

Mergers and alliances are considered to be channels of survival statistics: Mr. AAJ

 

 

SS: What has been the trend in the bulk cargo industry?

 

 

AAJ: Bulk cargo industry business is seen less volatile taking into consideration their turn over in the past year, present and future. .Freight rates on cargoes such as coal, iron ore etc did not witness much suffocation. 2018 trend for bulk cargoes forecast is a leaden growth and this trend is expected to prevail till the 2019.

 

While the Ports and Container Terminals in the West Coast Ports especially in Gujarat and JNPT are over worked, the capacity continues to be grossly under-utilized in the ports situated in the East Coast. The imbalance is growing rapidly over the years and what are your views on this development?

 

Answer:

First and foremost aspect of this development in Indian coasts is that that Major Ports especially in some East Coast Ports are pre-eminently located in the heart of their respective cities and were built centuries ago. This can provide strategic advantage and also operational disadvantage taking into consideration present market conditions.

 

With increase in draft and capacities at most of the East Coast Major ports and terminals, we can anticipate increase in the container cargo volumes. However connectivity such as roads and rail is well equipped and efficient at West Coast ports when compared to the ones in the East Coast.

 

Vital projects with regards to road and rail connectivity which were stalled are now being re-considered and work to complete the same is in the progress at East Coast Ports. If such ambitious projects are completed at rapid speed then the imbalance regarding cargoes volumes between both Indian Coasts might be balanced. This is what the trade desires also.

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 Why coastal shipping has not picked up despite several concessions offered by the Ministry?

 

Answer:

 

Govt of India is taking significant measures to boost Coastal Shipping. The current cabotage regulation has made the mode of transportation difficult to flourish. The Cabotage law stipulates that Indian Flag vessels to be given first preference over the coastal cargo. Foreign flag vessels shall be allowed to handle coastal cargo only when Indian Flag vessels are not available.

 

According to the trade acute scarcity of Indian mainline vessels has acted as a dampener on coastal movement. The saving grace is the latest news that Govt of India is considering permitting foreign flag vessels in Indian coastal waters. This will considerably reduce the logistics cost and boost coastal shipping.

 

The proposal also aims to reduce shipping rates and transportation time. Trans-Shipments business from the east coast will witness major boom. Since Indian Shipping Trade utilizes in a big way Colombo, Oman, Singapore and Dubai ports for shipments which eventually added costs and transit time. Statistics reveal that 60 per cent of India’s exports and imports containers are transshipped through these ports. With various steps taken by the Govt of India, we should hope that coastal shipping will soon witness its dawn and promote huge shipping businesses.  

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