Home > Shipping > Shipping Industry in India: Updates

Shipping Industry in India: Updates

Performance of the sector in September 2010:

  • Cargo traffic at major ports recorded a YoY growth of 4.5% in September 2010. This growth was achieved in spite of a higher rainfall in the current year.
  • Eleven out of 13 major ports posted growth in cargo traffic in September 2010
  • Petroleum-oil-lubricants (POL) drove cargo movement growth on the Ennore and Kolkata ports.
Cargo traffic at major Indian ports (million tonnes)
  Sep   2009 Sep 2010 % chg. Apr-Sep 2009 Apr-Sep 2010 % chg
Kandla 7.1 7.0 -1.9 39.3 40.3 2.5
Vishakhapatnam 5.3 5.5 5.3 33 32.5 -1.5
Chennai 5.0 5.1 0.9 30.5 31.9 4.6
J.N.P.T. 4.7 5.4 14.5 29.7 30.9 4.3
Mumbai 4.5 4.8 7.9 26.5 27.4 3.3
Paradip 3.9 3.9 1.1 26.7 26.5 -1
Mormugao 1.7 1.8 10.9 16.7 17.8 6.8
Haldia 3.0 3.1 3.3 17.2 16.6 -3.7
New Mangalore 2.5 2.1 -15.7 17.7 15.2 -14.4
Tuticorin 1.9 2.0 0.7 11.7 12.2 4.1
Cochin 1.1 1.4 22.6 7.5 9 19.2
Kolkata 1.0 1.2 26.7 6 6.4 6.5
Ennore 0.8 1.0 26.9 5.4 4.7 -13.4
Total 42.5 44.4 4.5 268 271.3 1.2

Expansion plans of shipping companies

Large shipping majors such as Shipping Corporation of India (SCI), GE Shipping and Varun Shipping are in talks for ship acquisitions, both in India and overseas, as they seek to upgrade their fleet to newer models and phase out old ones.

  • SCI, India‘s largest shipping firm, has set aside about $4.3 billion to buy 57 new vessels. It has also asked for expressions of interest from Indian shipyards for a 10-15% stake, to help it diversify into shipbuilding.
  • Great Eastern Shipping plans to spend $572 million to acquire eight vessels.

While companies have huge expansion plans, it must be noted that lower freight rates are likely to adversely affect profit margins. This is because the Baltic freight index (benchmark index), which tracks rates to ship dry bulk, has fallen more than 12% in 2010 from 3,005 points in December to 2,639 points in September. Although the rates are higher than the corresponding year-ago levels, supply side pressures exist.

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