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India: Govt fumbles on easing key shipping rule
The government's decision to ease a so-called cabotage rule for ports that tranship at least half of their container volumes handled in a year to create hubs within India and cut dependence on neighbouring hub ports is flawed, say ports and shipping lines.

Only India-registered ships are allowed to ply on local routes for carrying cargo, according to India's cabotage law.

A transhipment container is one that arrives in a port, for instance Chennai, on a ship, and is unloaded and then re-loaded onto another ship and taken out of Chennai to its destination either in India or abroad. Many such services together constitute transhipment.

Container shipping lines typically look at a period of at least five years before working out transhipment route networks. Cabotage relaxation should match this long-term planning of lines, say industry experts.

Global container carriers have been lobbying with the government for relaxing the cabotage law arguing that lack of adequate Indian ships was hindering the growth of transhipment ports that require large volumes to attract mainline container ships with bigger capacities to call.

"In the absence of cabotage relaxation, foreign container lines will not do trial runs for a year to convert a port into a transhipment hub. Lines will not come without a long-term perspective; nobody will even think of doing it," said the chief executive officer of a container terminal located in southern India.

"Transhipment involves many services. The shipping ministry decision indicates that it was taken without any application of mind and written by someone who has no idea about shipping," he said, asking not to be named because of company policy on speaking to the media.

Transhipment ports that are eligible for cabotage relaxation will enable foreign container lines to carry export-import (Exim) laden and empty containers between that port and other Indian ports, according to a 7 March circular issued by the ministry.

For evaluating the volumes handled by a transhipment port for granting cabotage relaxation, only Exim containers (overseas loaded and unloaded), container transhipment of Exim and empty containers handled by all the terminals of that port will be included, the ministry wrote.

New or existing container ports handling transhipment traffic can apply for cabotage relaxation to the directorate general of shipping (DGS) which shall grant relaxation for a period of one year for existing ports and two years for a new port (including a gestation period of one year).

An existing container handling port should tranship 50% or more of the containers handled during the first year while a new port will have to achieve this level in the second year. Otherwise, the relaxation will be revoked.

The container handling port whose relaxation is revoked shall not be considered for cabotage relaxation for the next three years, according to the circular.

"The government has put the cart before the horse," said a Chennai-based executive of a European container shipping company.

"No Indian port is currently handling 50% of their business as transhipment. The whole idea to get the cabotage relaxed is to convert one or two ideally located ports to handle transhipment. If ports already tranship 50% of their container volumes, then what is the need to relax cabotage," he asked. "It looks weird and impractical," he added.

"The first thing that hits me straight in the face is that for cabotage relaxation it is up to the port to apply. Suppose a port does not wish to apply for cabotage relaxation, there will be no transhipment from that port," said the India head at one of the top three global container shipping firms based in Europe.

"If my line wants to do 200,000 containers in transhipment from Mundra port in a year, Mundra port cannot go to the DGS for cabotage relaxation until Mundra port is sure that it can do at least 1.36 million containers in a year," he said.

"Why? Because Mundra port is already handling 2.72 million containers (in 2014-15). It means that if Mundra is doing 2.72 million containers and if it goes to the DGS seeking cabotage relaxation, it will have to ensure that 1.36 million containers (half of 2.72 million containers) will be transhipment containers. Those transhipment containers can come from anywhere," he explained.

Similarly, India's only designated international container transhipment terminal (ICTT) at Vallarpadam in Cochin port handled 365,000 containers in the year ended March 2015. Of this, the transhipment containers were only 17,000 containers or less than 5% of the total volumes.

The government eased cabotage restrictions for the Vallarpadam facility for a three-year period in September 2012. The relaxation ended in September 2015, but was not extended.

To get cabotage relaxation, ICTT will have to handle 182,000 containers (half of 365,000 containers) as transhipment containers.

"For many years, DP World Ltd (the operator of Vallarpadam) will have to twiddle their thumbs. The government's dream of creating a transhipment hub in Cochin has been thrown out of the window with this circular," the India head of the European container line mentioned earlier said.

Vallarpadam declined to comment.

"If I have an option in Jebel Ali, Singapore, Fujeirah, Salalah, Colombo, why the hell should I break my head fiddling around in India? This circular is an eyewash. It has become a laughing stock in the shipping industry because it is so worded that the Indian shipping companies will continue to have a protection from something they don’t need. You need protection when there is a tiger; but if there is no tiger what protection do you want," he asked.

The government has relaxed the cabotage rule, but the way it has been relaxed with conditions, nobody can avail of it, said a director-level official at one of India's biggest shipping companies based in Mumbai.

For instance, Jawaharlal Nehru Port Trust, India's biggest container gateway, handled 4. 4 million containers in 2014-15, out of which less than 10,000 were transhipment containers.

A transhipment port is dependent on other ports for aggregation of volumes. Jawaharlal Nehru Port does not need cargo from other ports because it has its own hinterland (cargo-generating area).

Besides, Jawaharlal Nehru Port earns more money from direct loading of export-import containers than it would probably from transhipment containers, which typically generate lower revenue. Re-orienting its strategy to become a transhipment port will only lead to loss of revenue for Jawaharlal Nehru Port. So, it would be least interested in a transhipment tag and cabotage relaxation.

Jawaharlal Nehru Port declined to comment

"This circular doesn't solve anybody's problem. I don’t think anybody will benefit out of it. The conditions attached are quite stiff," said the chief executive officer of a private port located in Gujarat.

The shipping ministry said that the decision was taken to promote transhipment hubs in India.

"If ports can develop a model to get mainline ship operators on board to carry out transhipment continuously, they can avail cabotage relaxation automatically. There will be no time limit on relaxation and ports will not be stuck with government policy changes and uncertainties," said a spokesman for the shipping ministry.
Source: Livemint

Posted On:16-Mar-2016



Credits: www.hellenicshippingnews.com

The Sustainable Shipping Initiative signs declaration to tackle global wildlife trafficking
The Sustainable Shipping Initiative ("SSI") - a pioneering coalition of companies from across the global shipping industry - has today signed a Declaration to tackle global wildlife trafficking routes. The Declaration was unveiled by The Duke of Cambridge, President of United for Wildlife, and is the culmination of 12 months of work to develop a plan, led by the transport sector, to crack down on illegal wildlife trafficking routes.

The signing of the Declaration is in line with one of the key pillars of the SSI's Vision for a more sustainable shipping industry, which states that shipping must earn a reputation for being a trusted and responsible partner in the communities that it touches around the world.

The United for Wildlife Transport Taskforce Buckingham Palace Declaration is a landmark agreement, committing to take real steps to shut down the routes exploited by traffickers of the illegal wildlife trade, moving their products from killing field to market place.

The declaration outlines 11 commitments, which have been collaboratively developed over the last 12 months by members of the United for Wildlife Transport Taskforce. The commitments aim to help support the private sector in fighting the illegal wildlife trade, and include:
Increasing passenger, customer, client, and staff awareness about the nature, scale, and consequences of illegal wildlife trade
Promoting the Declaration and its Commitments across the entire transport sector and encourage all in the sector to sign up to the Declaration
Improving the training of staff within the transport sector to enable them to detect, identify and report suspected illegal wildlife trade, and acknowledge staff who champion this cause
Notifying relevant law enforcement authorities of cargoes suspected of containing illegal wildlife and their products and, where able, refuse to accept or ship such cargoes
Over 40 organisations from the transport industries have signed the Declaration, including a number of leading shipping organisations such as Maersk Group, China COSCO Shipping, Dubai Ports World and the UK Chamber of Shipping. Although a number of trade routes are used for the smuggling of wildlife products, shipping is a significant transporter.

Alastair Fischbacher, CEO, the Sustainable Shipping Initiative commented:

"The Declaration is a welcome and necessary step in the fight against illegal wildlife trafficking. The SSI wholeheartedly supports its aims, and it is an example of how shipping can take ownership and responsibility for improving wider areas of sustainability, working together and helping other transportation and conservation industries, along with local communities, to make a substantial difference on important global issues, such as the fight against illegal wildlife trafficking."
Source: Sustainable Shipping Initiative

Posted On:16-Mar-2016



Credits: www.hellenicshippingnews.com
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