Thursday, 3 January 2013

Congestion at JN Port to be eased

The congestion outside Jawaharlal Nehru Port area is a temporary phenomenon due to illegal parking of those tractor trailers without proper documentation for export cargo at the road side.

In view of the heavy congestion of tractor-trailers with containers on approach roads to JN Port terminals blocking the arterial routes, as reported in the recent past, Mr. L. Radhakrishanan, Chairman, JNPT, held a meeting at the Mumbai Office with various stakeholders including terminals, CSLA, MANSA and BCHHA and senior port officials to arrive at a solution.

During the course of discussions, the parking of trucks carrying un-documented export containers on approach roads to JN Port Terminals (mainly to APM Terminals) was found to be one of the main causes of congestion.

It was decided to segregate trucks carrying containers without proper documents and move them to a parking area in order to clear the approach roads for trucks with correct documents for shipment to reach the terminals on time. This will also expedite the movement of CFS stuffed export containers and empty trailers bound for different terminals for picking up either empties or loaded boxes on the return trip without hindrance.

 While regretting the inconvenience caused, the Chairman of JNPT expressed optimism that the above action will decongest the approach roads not only to the port terminals but also to the nearby places like Panvel, Uran and Vashi which were impacted recently.








Tuesday, 1 January 2013

Undocumented export containers cause congestion, JNPT

Congestion on an approach road to any port certainly has adverse consequences. Jawaharlal Nehru Port Trust has attended to the issue and come out with an effective solution. The Port, rightly, convened a meeting of all the stakeholders to discuss the problem and arrive at a solution. Faced with stiff competition from the private players, it has to be alert to the problems that are likely to affect its total performance. Mr. L. Radhakrishnan, Chairman, took the chair and in the meeting it was decided to separate those trucks which have  proper documents from those which do not, so that the approach road will be available to those trucks with proper documents enabling them to reach the terminal in time for shipment. In a statement, the port said: “The parking of trucks carrying un-documented export containers on approach roads to JNPT terminals (mainly to APM terminals) was found to be one of the main causes of congestion”.

APM Terminals Mumbai is the joint venture of APM Terminals and Container Corporation of India and it has been appointed, under an agreement for a 30 year period concession, to build and operate a container terminal at JNPT.

While APM Terminals is a recognized international world leader in container terminal operations and management with headquarters in The Hague, Netherlands, the Container Corporation of India Limited is a public sector undertaking under the Indian Ministry of Railways.

A stitch in time saves nine.




RBI relief for exporters

The Reserve Bank has extended the period of realisation and repatriation for exporters of goods and software from 6 months to 12 months to help them deal with the global economic slowdown.

“The issue has since been reviewed and it has been decided, in consultation with the Government of India, to extend the above relaxation with effect from Oct. 1, 2012 till March 31, 2013,” RBI said in a notification.

This has been done in the wake of global economic slowdown leading to payment delay by the buyers abroad. It further said the provisions in regard to period of realisation and repatriation to India of the full export value of goods or software exported by a unit situated in a Special Economic Zone (SEZ) as well as exports made to warehouses established outside India remain unchanged.

Meantime, Federation of Indian Export Organisations (FIEO) President  Rafeeque Ahmed has welcomed the RBI decision to continue with extension in the repatriation of export proceeds in view of continuing liquidity problems. He said that FIEO has already represented for extension of the said facility which was introduced in 2008 as ground realities are more or less the same.

FIEO Chief said extension in the repatriation period will provide relief to the exporters and will reduce the transaction time since they would no longer be required to approach authorized dealer for extension in repatriation period if it is within 12 months from the date of exports. Such a move can also be used by the exporters as a part of marketing strategy for promoting exports by offering longer period of credit, Mr. Ahmed added.

India’s exports fell for the sixth consecutive month in October by 1.63 per cent year-on-year, with trade deficit widening to a record $21 billion. For the first seven months (April-October) of the 2012-13 fiscal, exports have shrunk by 6.18 per cent to $166.92 billion.




Sea ice melts, facilitating faster freight transit

In a twist to the debate over global warming, melting Arctic sea ice is making it easier to transport the fossil fuels that produce the planet-warming gases, which appear to be causing it to thaw in the first place.

As a result, a record number of tankers have gained access to an emerging shipping route, creating a potential industrial boon in the remote Arctic. According to Sacbee sources, the increasingly ice-free route runs from Europe to Asian markets through the Bering Strait, which divides Alaska and Russia. It can be 40 per cent shorter than the southern alternative of shipping through the Suez Canal.

Russian President Vladimir Putin has vowed to turn it into one of the world’s “key trade routes of international significance in scale,” as Russia moves to export Arctic oil and gas to China and other hungry economies in the Far East.

The Russian leader predicted in 2011 that the route could rival the Suez Canal eventually.

Arctic sea ice melted to a record low in September, according to the National Snow and Ice Data Center, when ice covered just 24 per cent of the Arctic Ocean, compared with at least twice that amount three decades ago.

Norway’s Oil Minister Ola Borten Moe said if the melting trend continued, he foresaw a time when a range of cargo broader than the current petroleum products, iron ore and coal would be transported through the Arctic waters along the route.

“That will not only be important for energy production, but also for all kinds of transportation of goods,” he said recently at the Brookings Institution, a research center in Washington. “This could change the dynamics between Europe and Asia.”

Just four vessels completed the northern sea route from Europe to Asia in 2010. But the traffic has jumped 10 fold since at least 46 vessels sailed the route this season, according to the International Centre for Trade and Sustainable.

A milestone came early this month, when the Russian energy giant, Gazprom, announced that it had completed the world’s first liquefied natural-gas cargo delivery across the Arctic through the northern sea route.

Sea ice melt also is helping to open up a Northwest Passage route along the Canadian and Alaskan Arctic coasts.

But that has bigger challenges than the northern sea route that transits the European Arctic. The northern sea route has less ice and superior depth, the Alaska Legislature noted in a 2012 report.

The northern sea route, however, raises issues for Alaska because of increased ship traffic in the Bering Strait, where vessels turn south from Russia toward Asia. An increasing number of cruise ships and other vessels also ply the Alaskan Arctic waters. The US Coast Guard said that at one point in August, 95 ships were operating in the Arctic waters off Alaska. Nearly half were research vessels.

Alaska, like Europe, has hopes for economic benefits from the melting ice, including easier access for Arctic oil and tourism, as well as the potential for expanded fisheries. The State also hopes to develop a shipping hub that services vessels travelling in the northern waters.

But there are dangers, and not just for polar bears, which are listed as a threatened species because of the projected habitat loss from melting sea ice.

“With increased shipping and marine traffic comes risk of vessel groundings, spills, collisions, pollutants, noise disturbances and invasive species,” said the 2012 report from the Alaska Legislature’s Northern Waters Task Force.

“This risk is particularly high due to lack of detailed navigational charts, reliable weather forecasting, vessel traffic separation protocols and search and rescue infrastructure.”

While the ice melt has been profound, the main force behind development of the northern sea route is global energy economics, said Lawson Brigham, a polar shipping expert and University of Alaska Fairbanks Professor.

“What’s driving this traffic is natural resource development in Russia and northern Norway,” said Brigham, a former icebreaker captain. “Those cargoes are carried across the top of Eurasia to China and other countries in East Asia. But the primary client is China.”

The shale gas revolution in the United States is also playing a key role in the development of Arctic shipping from Europe to Asia. European natural gas-export projects, such as Norway’s Snow White facility in Hammerfest, originally were built for the American market.

“But by the time we were able to finish the factory, there was no American market,” said Borten Moe, the Norwegian Oil Minister.

The United States no longer needs imported natural gas because of its domestic shale bonanza. But Asian demand is high, and the northern sea route is a quicker way to the Far East.

The Arctic shortcut between Europe and Asia saves fuel costs and is free of the piracy that plagues shipping elsewhere.

But Arctic navigation has challenges and costs, not least of which are expensive ice-breaking escorts for at least part of the passage.

“There were 46 vessels that went through the northern sea route and 18,000 vessels that go through the Suez Canal, so we’ve got a way to go,” Brigham added.

“But the potential is absolutely there, because natural resources are crucial to Russia’s economy, and here is a way to use this route to move the resources to world markets.”




Wrong or under-declaration of cargo causes concern

Shippers need education and need to invest in proper packing, loading facilities and materials


Five of the world’s major container shipping lines got together in 2010 to form the Cargo Incident Notification System (CINS) and funded a procedure whereby information regarding the type of incident, i.e. any dangerous or potentially dangerous occurrence, could be recorded and shared thus increasing the safety of the supply chain.

It is said in a Media release that initially the scheme was aimed at hazardous goods but in due course it has been expanded to cover any miscellaneous box, which posed risk to the health and well-being of any participant in the supply chain or otherwise. The original members Maersk, MSC, CMA-CGM, Hapag Lloyd and Evergreen solicited advice from industry experts such as the TT Club and International Group of P & I Clubs with a view to revising the practices both of the container carriers and those responsible for loading them.

Before the meteoric rise of box traffic all stowage was in the holds of vessels with much of the more dangerous and bulky cargo loaded on deck, always by professional dock workers and stevedores. Now a myriad of products are stowed into containers, sometimes hundreds of miles from a loading port and often by ill-trained staff meaning the dangers due to heavy loads and insufficient packing and become apparent only when something untoward occurs, often with tragic consequences.

These days, collection and collation of information is fraught with peril in many countries and by the very nature of international shipping the risk of prosecution by anti-trust authorities for assimilating and publishing such data could potentially be disastrous for those concerned. This work, however, has the potential to save lives and so the CINS Organisation, with a database hosted by the UK headquartered Container Owners’ Association (COA), is committed to comply with the US Sherman Act, Article 101 and 102 of EU treaty plus any other similar competition and data protection legislation and therefore a veil of secrecy is cast over any information gleaned and recorded whilst specific shipper details are excluded as a matter of course.

The information gathered provides an early warning of worrying trends, whether relating to cargoes that display dangerous characteristics, but have not yet been recognised as such in the IMDG Code, or continuing or emerging unsafe practices in the unit load industry. At the heart of this initiative is a quest for quality – both in terms of pure service delivery, ensuring the arrival of cargo in sound condition on time, and also improving the way in which all the parties in the supply chain carry out their obligations and communicate.

The incident data captured since the launch is now lending weight to – and to some extent challenging assumptions from – the anecdotal evidence from previous years. The records include the nature of the cargo concerned and its packaging, together with details of the routing and then information on the type of incident and the root cause. The TT Club, as a key insurer for the transport industry, and advisory members of the CINS committee, undertook analysis of data on behalf of CINS.

CINS has now released figures showing the results they have obtained and some of these are somewhat surprising. These figures illustrate an overall division of where cargo involved in incidents actually emanated from and the CINS members admit they believed, somewhat justifiably, that freight loading in Europe and North America would not have been involved in anything like the 31% of incidents it accounted for believing that packing controls in these regions would be considered as more ‘mature’.

In fact it would seem that practice makes perfect with the huge volumes of goods emanating from the whole of Asia only accounting for 36% of recorded incidents (including China’s 16% contribution). As might be expected, two thirds of occurrences involved dangerous goods with leakage accounting for over half the reports and of all the incidents reported by number 8% involved fire or explosion.

So what has this very useful garnering of information concluded after its first two years of operation? With poor packing accounting for 40% of the incidents (80% of these were for hazardous goods) and incorrect packing another 10%, it is clear that shippers need education and need to invest in proper packing, loading facilities and materials. Doubtless, despite the anonymity so carefully guarded by the CINS members they have taken steps to make those responsible aware of their liabilities in no uncertain terms. The threat of the withdrawal of insurance cover could spell the end of exports for any manufacturer or producer.

One of the most unnerving figures released is what is known in the trade as the ‘Iceberg’ risk factor, the vital pieces of information not revealed to the container carrier. One immediately thinks of the weights being under-declared but in fact in not one of the cases this was a factor. The chilling statistics is that 21% of incidents by potential cause it was mis-declaration of the goods by shippers or agents, and most often this involved dangerous goods – remember these are only the ones which resulted in incidents, surely pointing toward a deep-seated problem with potentially disastrous consequences.

As investigators continue to sift for evidence on board MSC Flaminia, the fears of the liner industry that the nature of cargo carried is largely unknown are here shown to be reasonable. The findings like this display the potential for the CINS Organisation to have cogent dialogue with enforcement agencies, competent authorities and the IMO in order to lead to and support relevant changes in legislation or other safe practice recommendations.

According to the Media statement, the Chairmanship of CINS will now pass from founding member Dirk Vande Velde of MSC in a planned two-year rotation and the new man will be Reinhard Schwede of Hapag-Lloyd. Unfortunately there looks to be a bright future for CINS whose services will be for the foreseeable future and whilst certain bulk freight groups and RoRo ferry companies have previously expressed interest in membership the current set up has enough on its plate if it is to clean up an industry which, if not controlled with suitable vigilance and rendering penalties for offending shippers, has the potential to cause untold harm to innocent individuals and the environment.

With the new influx of carriers, CINS members now account for over 52% of the global container slot capacity and the organisation is now open to membership by any ship owners worldwide. 




Iranian-built container ship launched

Iran has unveiled its newest domestically-made container ship, named Iran-Shahrekord. The ship has 2,200 TEU capacity and has received all the necessary certificates from international institutes.
The National Iranian Tanker Company Managing Director announced in December 2011 that 21 new tankers will be added to the national fleet by the end of 2013, raising the country’s crude transportation capacity to 180 million tons per year.
“Currently, Iran has 49 oil tankers operating in the national fleet,” NITC Director Mohammad Souri said.
The Islamic Republic of Iran Shipping Lines Managing Director Mohammad-Hossein Dajmar has said that according to the United Nations Conference on Trade and Development (UNCTAD), Iran holds a 1.17 per cent share of the total shipping capacity in the world, placing the country in 19th position.
Iran’s shipping line has currently 165 ships with a capacity of over 1,000 GT and 13 million tons.





More incentives for exporters

The Central Government has announced a number of measures to boost exports consequent on dwindling exports and the rising trade account deficit. This is the second round of incentives in less than six months.

The sops include extension of 2 per cent interest subsidy for another year till March 2014, and additional incentives on incremental exports.

“We are finding it difficult to meet export targets and want to stop and reverse the fall in exports. Year 2012 has been particularly difficult and the Government will continue to monitor the situation. We will make every possible effort to improve exports. It is a matter of priority and concern,” Commerce and Industry Minister Anand Sharma told reporters. The Government had set an export target of $360 billion for 2012-13.

During April-November this year, exports contracted 5.95 per cent to $189.2 billion due to the slowdown in major markets such as the US and Euro Zone. Imports stood at $318.7 billion compared with $324 billion in the last financial year. The trade deficit for the period stood at $129.5 billion compared with $122.6 billion in the same period a year ago.

Mr. Sharma said the Government would extend the period of interest subvention on certain specific sectors including handicrafts, carpets, handlooms, sports goods and toys, among others.

“All these sectors are directly linked to job-creation. Also, our efforts for market diversification to Africa, ASEAN and South Amercia have paid dividends,” he said, adding that trade stands at $65 billion.

Additionally, the engineering sector, which has been a laggard in exports since the global downturn, has been extended sops. “To retain this competitive edge and to boost engineering exports, certain specific sub-sectors of the engineering sector would be extended the benefit of 2 per cent interest subvention. They will receive this benefit from the last quarter of the current financial year, ie. from Jan. 1, 2013 till March 31, 2014,” Mr. Sharma stated.

The incentives came in the backdrop of the Annual Supplement to the Foreign Trade Policy announced on June 5.

A pilot scheme of 2 per cent interest subvention for project exports through Exim Bank for countries of the SAARC region, Africa and Myanmar has also been announced. The Minister said the objective of the scheme is to boost India’s exports in these countries by providing long-term concessional credit through Exim Bank.  He said five new countries New Zealand, Cayman Islands, Latvia, Lithuania and Bulgaria had been added under the Focus Market Scheme, while Eritrea was added under the Special Focus Market Scheme.