The Hindu Business Line : Delay in SCI service to West Asia hits exporters

WITH Shipping Corporation of India (SCI) not having any plans as yet to introduce a container service to West Asia , Indian exporters have been badly hit, as foreign shipping liners are trying to cash in on their monopoly in that region by hiking freight rates.

According to trade sources, some two lakh twenty-foot equivalent units (TEUs) of container cargo are exported from India to West Asia every year. The sources said exporters of tea from India are especially hit hard on this score, ever since Iran lifted the ban on tea imports from June.

"First, shipping lines are not making any containers available for Bander Abbas (in Iran), citing non-availability of containers for the port. Then some shipping liners like Pacific International Ltd are believed to have hiked the freight rates to Bander Abbas port to $3,100 per 40-foot containers. With SCI not providing any service in West Asia , the foreign shipping liners are taking advantage of their monopoly over the region," said a representative of the Federation of Indian Export Organisation (FIEO).

In fact, this has been included in the agenda for the forthcoming meeting of the Standing Committee for Promotion of Exports (SCOPE) scheduled in Mumbai later this month, which is likely to put out a request for SCI to provide container services to West Asia.

SCI, however, is not keen at the moment to introduce such a service. "For one, there are too many operators in this region — some 20-odd operators have services in this region, as a result of which, we feel, is congested. Then, services to West Asia mean a one-way cargo, as there is only a flow of export cargoes since there are no exports of any containerized cargoes from West Asia to India," a senior SCI official told Business Line.

Moreover, SCI's container tonnage is at present spread thin, giving it little room to introduce new services. While it owns three container ships and has another four on charter basis, the company can load on a total of 24 ships, including the ones that belong to different consortia of which it is a part.

"We are now looking at expanding out container tonnage through acquisitions. For, even operating vessels on charter basis is proving to be a costly affair. Today, we are having to charter a, say, 3,000 TEU vessel at 433,000 per day, while last year this time we could get it at $15,000 per day," according to the SCI official.

The company is waiting for the container ship market to soften for making the proposed acquisitions.

"The market for these ships is high these days. For example, we have to shell out at least $60 million for a 3,000 TEU vessel, which is almost 30 per cent of what it was this time last year. We expect the market to soften within a year and only then we will go in for acquisitions," the official said.

More Stories on : Shipping | Exports & Imports

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Air Sahara unveils `Steal fares' on six sectors

Air India board okays plan to sell New Mumbai apartments to staff

US Airways Group files for bankruptcy protection

Delay in SCI service to West Asia hits exporters

Sical sets up subsidiary to handle TNEB contract

RailTel ties up Rs 200-cr loan from IRFC

Rajapalayam-Tenkasi BG line

Plan for coastal highway to link Vallarpadam with Moothakunnam

New chief for GAC India