The Great Eastern Shipping Company Ltd, India’s biggest private ocean carrier, will “evaluate” entering the container shipping sector, a senior company executive, reports ET Now.
Great Eastern Shipping Company
According to an expert, this could be a diversification strategy aimed at mitigating the impending risks associated with oil trade and demand as the world pivots towards green energy, cutting the quantum of crude and petroleum products shipped by sea.
Rahul is the son of Ravi Sheth, a director of the Great Eastern Shipping Company and Managing Director of Greatship (India) Ltd, its oilfield services unit. Ravi Sheth is the brother of Bharat Sheth, Deputy Chairman and Managing Director of Mumbai-listed Great Eastern Shipping Company.
While a potential entry into container shipping may take some time, the Great Eastern Shipping’s intent could be just what the Indian exporters have wanted for a long. Weighed down by the steep freight hikes since the pandemic which continues with the Red Sea crisis except for a brief period of normalcy, exporters have been lobbying the government for a national container carrier to reduce their dependency on global box lines.
State-run Shipping Corporation of India Ltd is the only Indian carrier in the mainline container shipping trade with just two ships.
The Great Eastern Shipping Company has been focussing on four sectors – crude oil, petroleum products, LPG, and dry bulk – with a 43-strong fleet.
Though, the container shipping market currently is quite attractive in terms of the freight rates it may not be the right time to get into it because of high asset prices, says Garg.
The container trade is now being dominated by 3-4 big alliances comprising Mediterranean Shipping Company, CMA-CGM, Maersk, Hapag Lloyd, COSCO, Evergreen, Wan Hai, and Ocean Network Express (ONE), among others. Local cargo owners and exporters have been lobbying the government to float a container shipping company to protect them from spikes in freight rates, shortage of containers, and lack of space to move the cargo due to frequent disruptions in the supply chain.
Having Indian container ships, though, doesn’t necessarily mean that they will carry only Indian cargo, and with fewer vessels, they cannot serve the entire trade.
Fleet owners looking to enter the sector can consider deploying box ships for coastal movement on the back of the government’s push to promote coastal shipping.
The Great Eastern Shipping, according to Garg, could look at operating in intra-regional trades like the intra-Asia trade, which is also picking up, and become a niche player.
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Source: ET Now
