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i-maritime news letter

Shipping Ministry plans new chartering system for Govt cargo - 2012-01-09

The Shipping Ministry has proposed a new methodology for making shipping arrangements for the Government cargo.

The new system is intended to bring in more transparency, reduce time and eliminate the scope for negotiations, said a Government official. This would also help Indian companies to get cargo from public sector undertakings and government departments at competitive rates, he said.

The proposed methodology reserves certain size of cargo for the public sector, Shipping Corporation of India. Container cargo up to 25 TEUs will be given to SCI only.

This would be very insignificant in terms of volume and is unlikely to make much difference to SCI's volumes, said shipping analysts.

Similarly, in the case of project cargo, SCI will have the ‘first right of refusal'.

Source: Hindu Business Line


Defence cargo will continue be to be reserved for SCI.

The revised methodology will be circulated to alls stakeholders. Based on feedback, it will be implemented with modifications if necessary. Transchart, the chartering wing of the Ministry, makes shipping arrangements for the Government cargo.

This is the first time a transparent chartering methodology is being proposed. One of the objectives of Transchart is to ensure cargo support to Indian flag vessels.

Eventually, Transchart's idea is to migrate to ‘e-chartering' of ships for the Government cargo, completely eliminating negotiations. Currently, hardly any agency worldwide follows e-chartering.

Indian shipping companies have been seeking cargo support from the Government. Currently, Indian flag vessels carry less than nine per cent of Indian cargo.

There is also a move to reserve 33 per cent of export cargo to the Indian lines.

Currently, Indian flag vessels carry less that nine per cent of Indian cargo.

In container cargo, the share of Indian ships is only 3.4 per cent.SCI is the only company offering intentional container service.

Even in oil and petroleum products, in which national bottoms enjoyed morethan 50 per cent share a decade ago, the share has come down to 15 per cent.