The Hindu Business Line : Non-availability of vessels — SCI may withdraw from Indamex service

THE Shipping Corporation of India (SCI) is likely to withdraw from the Indamex (India-East Coast of the US) service from June due to non-availability of vessels.

The 3,500-TEU capacity vessel, "Mercure", acquired on charter by the shipping line some time ago, currently in operation on the Colombo-JNPT-New York-Norfolk-Charleston-Colombo route and to be freed from charter sometime in the middle of June, will not be available for renewal of the charter contract.

In the present market, SCI has so far been unable to locate another vessel of larger capacity to replace "Mercure". The kind of vessels it is looking for is not readily available. The vessels that are available are not up to the mark. Those who have the right kinds of vessels are asking for the moon by way of charter hire.

Meanwhile, the other partners in the service have decided on upgradation by deploying higher capacity, 4,000-TEUs plus, vessels on the route.

SCI's partners in the US service are APL, Contship and CMA-CGM. APL was not there when the service was launched in 2000. It joined the consortium much later.

Till a couple of years ago, SCI did not make money by running the services to the US ports. On several occasions in the past, the issue of withdrawing from the service, therefore, was discussed at the board level but never favoured.

However, the situation in regard to the service to the UK/Continent (ISES, or Indian Subcontinent European Service) is not as bad. SCI has 1.7 vessels operating on the route (one vessel fully acquired on charter by it and another vessel in which it has 70 per cent share, the balance 30 per cent being held by Zim, the Israeli line), the other partners such as YML, Evergreen, K Line and Malaysian International Shipping Corporation each offering one vessel of 2,600-TEU capacity. SCI has succeeded in renewing the contracts for carrying on with the vessels.

Last year, all the members of the ISES consortium had to announce blank-offs due to non-availability of the vessels. Wiser from last year's experience, the consortium members have initiated steps to prevent the recurrence of the same this year.

While the members of the ISES consortium have no doubts about the need for operating higher capacity vessels on the route, initially 3,000-TEUs plus capacity to be upgraded gradually to 4,000-TEUS plus, they are finding it too difficult to locate the right vessels at the right price.

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