Free Essay

Shipping Industry

In:

Submitted By dhruvsaksena
Words 610
Pages 3
Indian shipping industry growth and constraints
The Indian shipping industry accounts for 95% of the Indian trade by volume and approx. 70% of Indias trade by value. This industry mainly relies on Indian exports and imports and has been severely impacted by the recession of 2008-09 as felt by the Indian industries. The main components of industry include Dry cargo which is required for the import of iron ore , coal etc ( accounting for 66% of indias shipping trade). and the wet cargo which includes crude oil etc (34.7%).The Indian shipping industry with its fleet of 1029 ships as on 2012 is the 15th largest in the world and has grown at a CAGR of 3.3% since 1970’s, but however there are plenty of new opportunities for growth as well as severe constraints facing the industry.
With the liberalization of the Indian economy and during the period of economic boom, there has been an ever increasing demand for LNG to be imported in the country in order to sustain Indias fertilizer and power plants. This is followed by a need to integrate and develop multimodal logistics in order to ensure that the cargo once unloaded is delivered to the desired location in a speedy manner. This is being taken up by India by planning 16 multimodal logistic parks along Delhi to Mumbai highways and also with the Modi government’s vision of connecting all the rivers in India in order to boost up intra country trade. Another opportunity for growth for the Indian shipping industry which is primarily owned by the government with a few minor private players is through the development of bilateral trade agreements with different nations to enhance our usage of ships even during economic slumps.
Despite the growth opportunities the Indian shipping industry has seen its lows in 2010 when the Baltic dry index came down crashing in December 2010 after its peak in December 2007.The shipping industry is very easily impacted by the demand and supply principle and during economic crisis of 2008 when the world manufacturing output came at an all time low the deepest impact was felt by the shipping industry when prices for cargo, cape size vessels came down crashing. The development of Indias pipeline networks in the recent past is another factor posing a serious challenge to Indias wet cargo of shipping industry. Some of the constraints hindering the growth of the Indian shipping industry include the onerous tax regime imposed by the Indian government and this leads to companies in India owning a ship and registering it under a different flag. Similarly the wide regulatory framework in India provides a strict barrier for the entry of new players and also increasing the cost of compliance, this has led to a decrease in share of Indian shipping industry in the world. The growing proportion of old and outdated ships still being used by the industry highlight that there is a need of a better financing model and this is highlighted by the fact that till date India has no LNG carrier of its own despite the estimates that LNG trade will be worth 30 billion $ by 2020.Some steps have been initiated by the shipping corporation of India by tying up with OSAKA corporation but however there is still lack of financing models like KS or KG to account for a cost of 200 million $ to develop an LNG carrier. The Indian shipping industry no doubt has immense potential for growth but only if properly nourished and enriched with the support of government through better financing options , taxation regimes and by loosening up on the regulatory compliances.

Similar Documents

Free Essay

Shipping Industry

...SHIPPING TRENDS Capt. S. Pullat BA, MCIT, MCIArb, FICS AUMNI Shipping Consultants In the midst of technological developments, its application and futuristics, the Customers seem to be relegated to the back seat. Beware, if one does not treat them like a King or at least a la Prince, they could be King makers, and any case has a decisive role to play in all our endeavours for success. For, if we are driven by technology alone –as predominantly this forum is- we must ensure that it is affordable, safe, has redundancy and environmentally and user friendly as well. Technology per se does not solve problems, it enables problem solving and must be proactive too so that obsolescence can be planned and replacement provided for. Perhaps there is a lot to learn from the Computer industry, software sector in particular, as to how upgradation or newgradation is to be effected frequently. A cyclical and capital-intensive industry such as shipping has been slow to change and innovate, so much so it is driven by regulators and not industry itself. Such hindsight methodology has considerable time lag before ushering in corrective measures and in the interim the industry’s image and perception has suffered in the eyes of users and the public at large. Handful are the cases where ships are built to higher specifications than the bare minimum that Class calls for. A major operator recently citing experience criticised the need to shell out huge sums to overcome the cost saving nexus...

Words: 1659 - Pages: 7

Premium Essay

Classification of Dangerous Goods in the Shipping Industry

...the stowage of dangerous goods as well as the impacts it has. As well as how the International conventions, International Policies and Protocol for transporting dangerous goods are taking into consideration. Throughout this assignment, the main conventions will be examined and focused on such as MARPOL and SOLAS as well as policies established that deals with the transportation al Dangerous cargo that was established and enforced by the IMO (International Maritime Organization). There is also a list of dangerous goods and their classification that are mentioned by the UN (United Nation). Also giving the different classification of dangerous goods as well as what they are sub-divided into Classification of Dangerous Goods in the Shipping Industry The use of containers to aid in the transportation of dangerous goods has had a significant impact on the supply in many ways. A container can be defined as a portable or stationary hold, usually spaced in a rectangular form, which is used to store and container any item, good or commodity. While exploring different ways in which containers being used for DG’s impact, we will have to explore the different classification under which DG’s are placed as stated by the International Maritime Organization (IMO). Table 1: Classification of Dangerous Goods (IMO) | Class 1: | Explosives | Class 2: | Gases | Class 3: | Flammable liquids | Class 4: | Flammable solids | Class 5: | Oxidizing substances and organic peroxides...

Words: 2787 - Pages: 12

Free Essay

Current Trends in the Shipping Industry

...Current Trends in the Shipping Industry 1. Introduction 2. Practical Application 3. Conclusion 4. References 1. Introduction “On the high seas, majority of shipping companies are nowadays replacing the full speed ahead with slow and steady speed to maximize profit”. With the intention of cutting costs of fuel, ocean shipping companies are instructing their Captains at sea to throttle back the engines and this phenomenon is what is being called as “Slow Steaming”. In most of the cases, the vessels are taking as many as 15 days to make an Atlantic crossing that used to take just 10 days. 2. Practical Application According to Asaf Ashar, the head of the National Ports and Waterways Institute in Washington “Companies are more focused on reducing costs, not speed of delivery, and the trend will continue even after the global economy comes back." Nearly all of the world's shipping lines are using slow steaming at least part of the time, he said. I sail onboard crude oil carriers, managed by Wallem Shipmanagement and Stena Bulk, and this practice of throttling back on engine to save fuel was used in all voyages we made in 2011. One of the companies which has recently reported huge savings with this practice is the Copenhagen-based A.P. Moeller-Maersk, the world's biggest ocean cargo line. Maersk, which has a fleet bigger than the U.S. Navy, swung to a 639 million dolar profit in the first three months of the year 2010, the most recent quarter reported...

Words: 570 - Pages: 3

Premium Essay

Current Trends in Maritime Shipping Today and the Latest Issues Faced by Shipping Industry

...Current trends in maritime shipping today and the latest Issues faced by shipping industry Contents Page Introduction 2 Trends • Containerization 2-3 • Green Logistics 3-4 • Intermodalism 4-6 • Freight rate 6-7 • Tanker (ship) 7-9 Issues • Piracy 10-11 • Pollution 12-13 • Bunker fuel price increase 13-14 • Shortage of container 15-16 ...

Words: 4810 - Pages: 20

Premium Essay

The Shipping Industry Accounting Team Case Study

...THE SHIPPING INDUSTRY ACCOUNTING TEAM Summary: Sarah (the name given by us) has been working in McKay, Sanderson, and Smith Associates a mid-sized accounting team located in Boston that is specialized in commercial accounting and audits for past five years. Her specialty is accounting practices for shipping companies, ranging from small to certain big fleets along east coast. About two months ago her company merged with another two other accounting firms which has offices in Miami, Seattle, Baton Rouge, and Los Angeles. They avoided centralizing their business around one office in Los Angeles. Instead they formed a new firm called Goldberg, Choo, and McKay Associates in order to leverage the synergies of their collective knowledge. This merges affected Sarah when she was told that she would be working with the other three members from the other two firms to become the firm’s new shipping industry accounting team, by her boss. The other members were Elias in Miami, Susan in Seattle, Brad in Los Angeles. She had earlier met Elias at a meeting in New York but not the other two. This shipping team activity involved e-mailing each other about new contracts and prospective clients. They were asked to submit the joint monthly statement reports and issues. Sarah submitted her own monthly reports which summarized the activities of her own clients. This coordination of monthly reports took much more time since different accounting documentation procedures across the three firms were...

Words: 1693 - Pages: 7

Premium Essay

Meli Marine Case Study Ans 1) Factors for Attractiveness of the Shipping Industry - as Global Trade Is Always on a Rise, and It Is Primarily Dependent on Trans-Ocean Shipping; Thus There Will Always Be a High Need for

...Meli Marine Case Study Ans 1) Factors for attractiveness of the shipping industry - As global trade is always on a rise, and it is primarily dependent on trans-ocean shipping; thus there will always be a high need for the industry. - Relatively easy to enter the industry; which is a threat to existing companies. - Most companies offer similar services at competitive prices; therefore a client is at an advantage and can negotiate more suitable rates as he has many options to choose from. - Rival companies fight for a greater market share and companies have started to resort to undercutting of prices, giving low prices and overall industry cooperation has reduced. - Changing price of oil plays a huge impact as it constitutes a huge part of fixed costs. - Buyers (eg- Walmart and Target) can dictate terms and prices as they constitute the bulk of trans ocean freight services. And companies, to avoid losing the business to rivals, negotiate the prices. - Concentration of manufacturing in Asia means ships leave from Asia at full capacity, and charge high prices; on the other hand, they depart from USA/Europe half empty and charge a fraction of the cost. Ans 2) How does Meli marine compete -New CEO trimmed down size of its fleet, negotiated long term contracts with charters; sold old, inefficient ships. - Deal with a limited set of customers and focus on a limited good instead of shipping each and everything they can get their hands on. - They diversified from being...

Words: 332 - Pages: 2

Free Essay

Shipping Industry

...1. 글로벌 생산력의 공간적 변화 (1)  2/24 Global Shift in GDP (1700~1950) 1700-1820-1870-1913-1950 1. 글로벌 생산력의 공간적 변화 (2)  3/24 주요 국가의 World GDP 기여도 변화 (1AD ~ 2008) 80% 70% 60% United Kingdom Italy Germany France United States Japan India China 50% 40% 30% 20% 10% 0% 1 1000 1500 1600 1700 1820 1870 1900 1913 1940 1970 2008 1. 글로벌 생산력의 공간적 변화 (3)  4/24 국가별 GDP의 상대적 차이 (자료 : World Bank, 2009) 1. 글로벌 생산력의 공간적 변화 (4)  5/24 World Merchandise Trade Surpluses and Deficits  Global Trade Triad 2. Global 무역 경로의 발달 (1) 6/24  Roman Road Network (AD 200) Atlantic Ocean Black Sea  The Silk Road and Arab Sea Route (8th to 14th century) Mediterranean Ocean 500 km 2. Global 무역 경로의 발달 (2)  7/24 지리상의 발견, 대항해 시대(15~16c) 2. Global 무역 경로의 발달 (3)  8/24 World Trade Routes (1912) 2. Global 무역 경로의 발달 (4) 9/24 2. Global 무역 경로의 발달 (5) 동북아지역 컨테이너 해운 네트워크의 변화 1996 2006 10/24 3. 기술 발달/혁신이 국제물류에 미치는 영향 (1)  11/24 콘트라티에프 파동과 기술혁신 주기 Pace of innovation Water power Textiles Iron Steam Rail Steel Electricity Chemicals Internal-combustion engine Petrochemicals Electronics Aviation Digital networks Software New Media 1st Wave 1845 2nd Wave 1900 3rd Wave 1950 4th Wave 1990 5th Wave 1785 60 years 55 years 50 years 40 years 30 years 3. 기술 발달/혁신이 국제물류에 미치는 영향 (2)  12/24 건설/토목기술 발달에 따른 공간압축 효과 (수에즈, 파나마 운하) NORTH AMERICA...

Words: 423 - Pages: 2

Free Essay

Shipping Industry

...company in Portugal controlling a few plants to the top 10 rigid plastic container manufacturers in the world. Logoplaste has had tremendous growth over the past 15 years and mainly due to its extensive expansion strategies, it’s been able to maintain a CAGR (Compounded Annual Growth Rate) of 15.4%. In view of its articulate growth plans by 2010 they owned 60 plants in as many as 5 continents. Logoplaste had sales of about €300 million largely due to its large multinational clientele such as Coca-Cola, Heinz, Proctor & Gamble (P&G), Unilever etc. With the increase in acceptance of plastic throughout the world as a more safer and a durable alternative to metal, steel etc. the rigid plastic container industry was poised to grow at 5-6% annually while the overall container and packaging industry grew at just over 2%. Keeping these facts in mind it is vital that if Logoplaste wants to see continued growth and success and also wants to show similar growth rates in future it must also come up with viable strategies for growth. Starting with Logoplaste’s method of business, which advocated and practiced the “hole-in-the-wall” concept (on-site service focused towards decreasing transportation costs and increased customizability for clients) to perfection with customer centric, decentralized and “Just In Time” services to the clients. The company is known for its well-documented and drafted clauses that give prime importance to customers whilst always maintaining a win-win situation for both...

Words: 377 - Pages: 2

Free Essay

Assessment of the Changes in Indian Industry Environment and Their Impact in Respect of the Following Sectors: a) Telecom B) Automobile C) Shipping

...MDI, Gurgaon Strategy Management - II Assessment of the changes in Indian industry environment and their impact in respect of the following sectors: a) Telecom b) Automobile c) Shipping ARPIT JAIN: 12P189 Indian Industries The Indian economy has survived the global downturn very well. It has posted one of the highest rates of economic growth in the world despite other major industrial giants lagging behind. At the end of 2009, the Indian economy was growing at 7% a year. The strongest growth was coming from the manufacturing and construction sector and the weakest section was agriculture. The drawback of such a rapid economic expansion is a rise in inflation. The economy of India is the eleventh largest economy in the world by nominal GDP. Post independence the country went into a fast paced economic growth which was further fuelled by the free market principles started in the 1990’s which welcomed foreign investments. It has been predicted by leading Economists around the world that by 2020, India will be among the leading economies of the world. Four key industrial economic sectors are identified in India. The primary sector, largely extract raw material and they are mining and farming industries. In the secondary sector, refining, construction, and manufacturing are included. The tertiary sector deals with services and distribution of manufactured goods. India's service industry accounts for 57.2% of the country's GDP while the industrial and agricultural sector...

Words: 2851 - Pages: 12

Free Essay

Chinese Shipping Industry Evaluation and Cosco Swot Analysis 2012

...INDUSTRY EVALUATION Industry Overview – what is it? The present development of the Chinese shipbuilding industry follows a similar pattern to what had happened earlier in Japan and Korea. Japan used its shipbuilding industry in the 1950s and 1960s to rebuild its industrial capability, while Korea saw shipbuilding as a strategic core for its economic development in the 1970s. China is now also taking that development path by taking full advantage of the demand shift towards centres of low cost production, and making full use of its low cost advantage and large domestic demand to build a solid industrial foundation. This appraisal of industry will draw on the key comparables between Korea and China, the two key players in the Shipbuilding Industry. The development of the Chinese shipbuilding industry is often compared to the development of the industry in South Korea, but the conditions for the process of development differed considerably. While, the South Korean shipbuilding industry was aimed from the outset at producing vessels for export, in contrast the economic strategy in China has initially been to develop shipyard capacity to sustain domestic economic development. In other words, the substantial construction of shipbuilding capacity in China has primarily been aimed at enabling China to be self-sufficient in sea transport. Above all, from the Chinese perspective, the supply of raw materials for domestic manufacturing, meeting the food needs of its populations...

Words: 3081 - Pages: 13

Free Essay

Shipbroking

...negotiating the main terms of the fixture or sale, finalising the details of the contract and following the deal through to its conclusion. Everyone can start their own shipbroking business. This is the beauty of shipbroking. Shipbroker don’t need any formal qualifications nor do they need industry accreditation. Also there are low barriers to entry. This is so important. Moreover shipbrokers usually earn 1.25 percent of the total freight bill. So if 50.000 mt of steels from the black sea to China gets fixed at usd 35 per tonne. The total freight bill is usd 1.75 million. 1.25 percent of 1.75 million is usd 21,875 dollars in comission to the broker. Economy in shipping industry Strong global economic growth and favorable geographical distribution have more than doubled the tonnage demand growthnrate from the 1990s to this decade: from 3 percent to 6.5 percent. Our estimate for 2007 is as high as 9 percent. The principal shipping and shipbroking centres are London, New York and Singapore. Tokyo has a longstanding tradition in shipping/shipbroking, which is now more focussed on Japanese domestic trade. Other places continue to develop in international shipping services, such as: Hong Kong, Shanghai, Delhi and Mumbai; Copenhagen, Geneva, Genoa, Hamburg, Oslo, Paris and Piraeus in Europe; and in North America, Connecticut, Houston and Montreal are important shipbroking centres Why...

Words: 365 - Pages: 2

Free Essay

Management Across Cultures

...has more than forty shipping lines which make about 3100 ship calls every year. The port provides shipping services to major ports all over the world. The port is made up of 34 berths at five different docks, two major piers and river wharves. The ports purpose built international container terminals handle a variety of cargoes including motor vehicles, consumer goods, various materials and agricultural goods. The port on average handles over $1.8billion worth of cargo. The ports logistics network extends across south eastern Australia. The port offers access to the State’s major road and rail networks for further logistics requirements. The Dynon Port Rail Link provides 24 hour rail access for containers arriving or need to be transported to the port. The port provides access to South Australia, Western Australia, regional NSW and all across the east coast of mainland Australia. The port provides 24 hour commercial shipping control, quarantine and customs services, provision and maintenance of navigational aids for commercial shipping and strategic planning for the future of commercial shipping needs. The port also provides a crucial service for the transfer of containers between the sea and land. The Port of Melbourne manages port activities in order to facilitate the effective landside movement of cargo for owners and operators of Container Company’s. The Port of Melbourne provides a variety of container logistics services including: * Shipping * Pilotage *...

Words: 422 - Pages: 2

Premium Essay

Airborne Express

...were spending almost $17 billion to ship items. Shipment volumes had increased 15-20% every year over the last ten years too. The three main shipping companies at this time were Federal Express, UPS, and Airborne Express. Airborne Express was the third largest shipping company during this time. Compared to UPS and Federal Express, Airbone needed to focus on the importance of service and speedy delivery to grow. Because the express shipping industry began to attract more business, UPS and Federal Express began a pricing war, resulting in Airborne’s ability to gain margins. Airborne Express was able to produce profits during this time by using its own sources of competitive advantage: 1. Continue to service companies who needed to ship large volumes of urgent item materials. 2. Less automation and more employees for sorting, allowing the company to hire more part time employees instead of full time. 3. Shipping was mainly in metropolitan areas, which allowed them to concentrate on afternoon deliveries or second day deliveries. 4. Allowed other companies to release new technology for the field and then would order the devices for Airborne, rather than paying for R&D up front. 5. Reduced operating costs by: owning its own airport to ship the items for customers, as well as utilizing older aircraft for shipping, no retail centers to maintain, and had outsourced to private couriers to deliver packages. Because of their competitive advantage areas, Airborne...

Words: 456 - Pages: 2

Premium Essay

Export-Import Procedure and Documenttaoin

...A PROJECT REPORT ON Export-Import Process & Documentation towards B2B FOR Hindustan Cargo Ltd. MASTER OF MANAGEMENT STUDIES (MMS) UNIVERSITY OF MUMBAI SUBMITTED TO MAHATMA EDUCATION SOCIETY’S PILLAIS INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH NEW PANVEL UNDER THE GUIDANCE OF Chndrakumar P. Mutha SUBMITTED BY Aditya Ajit Jadhav (2012-2014) Roll No. 139 ACKNOWLEDGEMENT Life of human beings is full of interactions. No one is self-sufficient by himself whenever anyone is doing some serious and important work a lot of help from the people concerned is needed 84 one less specially obliged towards them. I cannot forget acknowledging them in few words as without the guidance & co-ordination of them in my project report would not have been possible. A large number of individual contributed to this project. I am thankful to all of them for their help and encouragement. My writing in this project report has also been influenced by a number of website and standard textbooks. As far as possible, they have been fully acknowledged at the appropriate place .1 express my gratitude to all of them. I would like to extend my heartfelt thanks to Mr. Chandrakumar Mutha, Accounts Head of Hindustan Cargo Ltd. Navi Mumbai Branch for giving me an opportunity to work on this project. I must also thank the management of Hindustan Cargo Ltd. to provide excellent opportunity and environment to be able to pull my project through. Cooperation of the staff is also...

Words: 8994 - Pages: 36

Premium Essay

Ups Strengths

...increasing the number of customers. Each of these strengths makes them stand out from their competitors and allows them to satisfy their customer’s needs. UPS offers all kinds of services like air, ground, domestic, commercial, international, and residential. They are mainly known for ground shipping because that is their most used service. Ground shipping is used in all 50 states plus Puerto Rico and is the most cost-effective service they have. International services allow you to choose from the best available flights (UPS Express Critical), 1-3 business days (UPS Worldwide Express/Plus, Saver), or 2-5 business days (UPS Worldwide Expedited). Air freight shipping allows you to meet your shipping deadlines with decent air rates. They also have a supply chain service (freight forwarding, customs brokerage, and returns management) which helps improve the efficiency of the supply chain management process. Their freight forwarding service is the largest U.S domestic air freight carrier. UPS is mainly a ground-shipping company and being the second largest air carrier is a bonus for them. They offer a guaranteed and a non-guaranteed global air freight service that allows you to choose shipping times ranging from next day delivery to five day delivery. Also, they provide you with an online service that helps figure out what your air freight rate might be and create your shipments. This service also allows you to track your freight movements as it is being shipped or access a full view...

Words: 678 - Pages: 3