Despite the uncertainties surrounding its privatization plans, Shipping Corporation of India (SCI) is shifting its focus to bolstering its container operations in long-haul trades. With the government owning a majority stake of 63.75%, SCI’s privatization process initiated in 2019 has encountered regulatory and due diligence hurdles, causing delays with no clear timeline for completion, says an article published on loadstar website.
Summary
- Despite delays in its privatization plans, Shipping Corporation of India (SCI) is focusing on strengthening its container operations in long-haul trades.
- SCI is reportedly close to finalizing a vessel-sharing agreement (VSA) with a prominent network operating on the India-US east coast trades, potentially with ONE’s upcoming standalone WIN service or the Indamex consortium led by Hapag-Lloyd and CMA CGM.
- The company recently received government approval to enhance its fleet by acquiring second-hand ships, including a containership with a capacity of around 10,000 TEU.
- The WIN service, set to start in May, will cover ports including Karachi, Hazira, Nhava Sheva, Mundra, Damietta, Algeciras, New York, Savannah, Jacksonville, Charleston, Norfolk, Damietta, Jeddah, and Karachi.
Renewed Business Strategy
In response to the prolonged privatization process, SCI is reportedly close to finalizing a vessel-sharing agreement (VSA) with a prominent network operating on the India-US east coast trades. Potential partners include ONE’s upcoming standalone WIN service or the Indamex consortium led by Hapag-Lloyd and CMA CGM. Discussions are said to be at an advanced stage, with an announcement expected within a month.
Fleet Upgrades And Second-Hand Acquisitions
SCI recently received government approval to enhance its fleet by acquiring second-hand ships, including a containership with a capacity of around 10,000 TEU. With an impending change in ownership, SCI had been cautious about investing in new tonnage to modernize its predominantly crude and bulk carrier fleet.
Service Details And Historical Context
ONE’s weekly WIN service, scheduled to commence in May, will cover ports including Karachi, Hazira, Nhava Sheva, Mundra, Damietta, Algeciras, New York, Savannah, Jacksonville, Charleston, Norfolk, Damietta, Jeddah, and Karachi. Notably, SCI was previously a minor participant in the original Indamex consortium formed in 2000.
SCI’s Liner Activity And Industry Dynamics
SCI has witnessed robust performance in recent years, primarily driven by its liner activity, although it has been primarily operating feeder vessels. The container freight rates surged due to pent-up demand during the Covid pandemic and more recently, the Red Sea crisis.
Local Industry Perspectives
Indian exporters have voiced concerns over escalating costs and have urged the government to consider establishing a domestic container line to support local trade. The Federation of Indian Export Organisations suggests that a 25% share by an Indian shipping line could save $5 billion annually and reduce dependency on foreign carriers.
Trade Growth Prospects And Economic Liberalization
SCI’s interest in expanding its container operations reflects broader industry trends aiming to capitalize on anticipated growth in India’s trade driven by supply chain diversification. The recent sale of Air India to Tata Group in 2022 signals the Indian government’s commitment to reviving public sector units and advancing economic liberalization efforts.
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Source: loadstar
