WEEKLY UPDATES RELATED TO SHIPPING NEWS

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1 New status Hamburg Freeport at the 1st. January 2013 After nearly 125 years the status of the Hamburg Freeport area ends at As there will be no transition period while introducing the customs port at , it was decided by the authorities to start with reconciliation phase as of More than 90 % of the port warehouses will follow this advice. Please pay attention in the following procedure regarding your import deliveries: To prevent these extra warehouse rent, please hand over the necessary documents just in time, but latest 10 days before arrival of the vessel in Hamburg. In such case that the docs and information are not available in time(we have to present complete(!) import documents to German customs 5 days before arrival of the vessel in Hamburg), please have comprehension that we will debit this extra costs like warehouse rent, demurrage and multi stop to your account! In every case significant extra costs will increase due to this change. Such as: further customs registration, controlling the deadline, multistop at the customs office and escort to customs office. The amount will be deducted from the warehousing company, but until now the correct amount is not stated. This new regulation is valid for ALL shipments to Hamburg, not only for DAP/DDP(DAT ) Maersk plans to move away from shipping Danish oil and shipping group A P Moller-Maersk will not invest significantly in its shipping business over the next five years and will focus on its oil, drilling rigs and ports, the Financial Times reported. "We will move away from the shipping side of things and go towards the higher profit generators and more stable businesses," Maersk chief executive Nils Andersen told the newspaper.. Maersk Line, the company's container shipping unit, has struggled with profitability due to the global economic slowdown and an oversupply of vessels that could intensify next year. The subsidiary is a barometer of world trade as its fleet carries more than 15 percent of all sea-borne containers. "When we have taken that shift, probably more than 50 percent of our capital will be tied in these three other businesses," the FT quoted Andersen as saying, referring to the oil, drilling rigs and ports divisions. "Maersk Line will then account for percent of capital. We will have four businesses of almost equal size." NSB calls for more powers to Major Port Chairman Exim News Service Mangalore The Chairmen of Major Ports should be given more powers in order to facilitate faster decision-making at a time when competition from the non-major ports was increasing, the National Shipping Board (NSB) has stressed. Speaking at the120th meeting of the Board here recently, Capt. P. V. K. Mohan, Chairman of NSB, emphasised on the need to enhance the financial and executive powers of Major Port Chairmen, for which a committee should be set up.

2 "We felt there is a need to enhance such powers, and towards this, we will suggest that a committee be set up. This committee should go into the powers of the Port Chairmen, review them, and look at the possibilities of ports getting miniratna status. We want to give more powers so that decision-making will be faster. Competition from non-major ports is also increasing. We need to gear up," he said. Capt. Mohan also stressed the need to move to the next level of managing and monitoring ships, for which training of technical officers, pilots and others was necessary. The NSB and the Directorate-General of Shipping would be recommending measures to get more cargo for Indian ships, Capt. Mohan said. Centre & states agree to have fresh look at contentious GST issue The Centre has finally agreed to have a fresh look at the debatable issue of compensation to states for revenue lost on account of Central Sales Tax (CST). The Union Finance Minister, Mr P. Chidambaram, said the decision was taken during his meeting with the Empowered Committee of State Finance Ministers. "Compensation is being paid for about two years and, then, partially for the third year, but then compensation has not been paid subsequently. That issue has to be addressed. We can t duck that issue," Mr Chidambaram said. The latest development may pave the way to Goods and Services Tax (GST) being finally introduced, it is believed. "All states support GST without exception. All of them said we support GST, but we would like to discuss the design of GST," the Minister said. It was agreed to form two sub-committees, one on compensation and the other on the design for the new tax regime, Mr Chidambaram said. The Revenue Secretary, Mr Sumit Bose, would head both panels, he added. CST was slashed to 3 per cent from 4 per cent in , and reduced further to 2 per cent in the following fiscal after the introduction of value-added tax (VAT). States, that collectively received Rs 6,393 crore as compensation for , have not yet reconciled to the fact that payment stands reduced to the extent they raised the state-level VAT. The states have made it clear that they would not go ahead with the rollout of GST if no solution was found on CST. New X ray system for Tuticorin Port DST Chennai Ground breaking ceremony for the construction of 9 Mega Electron Volt Advanced Container X-Ray Inspection System (AXIS Project) was performed at Customs House in Tuticorin to enhance the security of the port and curb smuggling. The first stone for the Project was laid by Mr. D.K. Srinivas, Commissioner of Customs, followed by Mr. S. Natarajan, Deputy Chairman of V.O.C. Port Trust. Mr. N.J. Kumaresh, Additional Commissioner of Customs, explained it was a flagship project of the Directorate of Logistics New Delhi and would be executed by M/s Bharat Electronics Limited, Bangalore. M/s Smiths Detection USA is the supplier of the equipment. The INR 24- crore

3 projects is expected to be operational by March The state-of-the-art scanner system will use a high power X-ray capable of penetrating 5 inch thick steel and is capable of material discrimination useful to detect organic and inorganic substances with natural colour differentiation. * Pratibha Cauvery refloated; being taken to Chennai Port Exim News Service Mumbai/Chennai The MT Pratibha Cauvery, which was grounded on the Chennai coast after getting caught in the recent Cyclone Nilam, was successfully refloated by salvers last week. The vessel is stable with hull integrity intact and no reports of oil spills, informed a Directorate-General of Shipping (DGS) release. The vessel is being manned by the salvers, who are continuously monitoring its condition during the maneuvers under tow by the ETV SCI Ratna in the vicinity of Chennai. Meanwhile, the preliminary investigation into the casualty is in progress and is expected to be completed shortly by the Principal Officer, Mercantile Marine Department, Chennai. * More ports seek relaxation of cabotage rules Some of the country's Major Ports like the Jawaharlal Nehru Port and Visakhapatnam Port have requested the Ministry of Shipping to relax cabotage rules for containerised cargo like it did for the DP World-run Vallarpadam international container transhipment terminal (ICTT) in Cochin Port. It is learnt from very reliable sources that till date the official notifications to this effect, from the concerned Ministry, have not come and the same is expected any moment. DP World wanted cabotage rules to be relaxed to be able to meet the projected container traffic volumes of 7.75 lakh TEUs and hoped it would also help the company meet the revenue targets. The Ministry of Shipping had relaxed cabotage laws for Vallarpadam ICTT earlier this year under which foreign- flagged vessels could pick and drop country's domestic cargo between various ports along the Indian coastline without prior approval. However, the relaxation was given for a period of three years after that the relaxation would be reviewed. The existing cabotage policy does not allow any foreign flag vessel to engage in coastal trade in the country except under licence from the Directorate- General of Shipping. In this context, shipowners want the relaxation in cabotage rules to be extended to other Major Ports too as it would allow foreign flag vessels to operate feeder service. **** Railways revenue from freight traffic zooms The Railways revenue earnings from commoditywise freight traffic zoomed to Rs 47, crore during April-October 2012 compared to Rs 37, crore in the corresponding period of the previous year. The Railways carried million tonnes of commodity-wise freight traffic during April-October 2012 compared to million tonnes in the corresponding period of last year.

4 The Net Tonne Kilo Metres (NTKM) went up to 3,63,834 million during April-October 2012 from 3,57,750 million in April-October **** Paradip Port urges state govt to ease norms on coal imports Exim News Service Bhubaneswar PARADIP Port has urged the state government to ease restrictions imposed on storage and transportation of coal imports. Paradip Port Trust (PPT) has now written to the state government urging it to relax the norm for imported coal and other minerals as the restrictions would hamper business. PPT has stated that it is not able to evacuate the coal imported and thus unable to handle new arrivals. Paradip Port handled 6 million tonnes (mt) of coal in and a total of 22 mt through the fiscal. Coal imports during were recorded at 3 mt. Essar Shipping inducts 2 MiniCape Vessels BSN Network / Mumbai Essar Shipping Limited (ESL) part of the Essar Group has, taken the delivery of MV Kishore and MV Ashok. These latest addition to Essar Shipping s growing fleet, MV Kishore and Ashok, are MiniCape vessels which are 253 metre long, 43 metre wide and a cargo capacity of dwt. On induction of these MiniCapes, A R Ramakrishnan- Managing Director, Essar Shipping Limited said, Essar Shipping has taken delivery of the last two MiniCapes from the total of six ordered with STX shipyard under the expansion program. With the induction of these two vessels, we will now consolidate operations to achieve the planned growth in revenues and scale of operations. With its uniquely designed hull to ensure larger carrying capacity with minimal draft requirements, ESL is confident that these MiniCape vessels will make trade to the Indian coast more economical and cost effective for clients in the Power, Steel and other core sectors. Maheshwari Handling sets salt loading record at Kandla Port DST / Gandhidham A new salt loading record in bulk was set recently at Kandla Port by Maheshwari Handling Agency Private Limited by loading 49,250 tonnes in just 21 hours and 30 minutes. Loading onto the vessel, m.v. Vinalines Brave, berthed at CJ-9, commenced on November 14 at 1800 hours and was completed at 1530 hrs the following day. Ex-350 machines and Kandla Port Trust (KPT) shore harbour mobile cranes were used for the process. * Andhra Pradesh Govt asked to set up Maritime Board DST / Visakhapatnam The Andhra Pradesh Government should emulate Gujarat and set up a Maritime Board in the State to get more funds from the Union Government for implementation of various schemes and shippingrelated activity, said National Shipping Board Chairman P.V.K. Mohan.

5 He said Gujarat had set up the maritime board 25 years ago to develop shipyards, ports and related infrastructure. The State Assembly would have to pass a resolution and send it to the Union Government for the establishment of the board, he said. Mohan expressed the hope that the suggestion would be taken seriously. Country head of JICA Mr. Shinya Ejima, Advisor (Infrastructure) Railway Board Mr. Girish Pillai and Managing Director DFCC Mr. RK Gupta were present at the signing of the loan agreement with Japan last week. * *********** Railways to obtain about INR 20,000 cr Japanese finance for western freight corridor DST / New Delhi In a major leap towards the execution of Dedicated Freight Corridor (DFC), railways have signed a loan agreement of about INR 20,000 crore with Japan for its western corridor. The project appraisal for the two routes comprising Vadodara to Jawharlal Nehru Port (JNPT) and Rewari to Dadri in the Western Dedicated Freight Corridor was signed between Japan International Cooperation Agency (JICA) and Railways, said a senior official of Dedicated Freight Corridor Corporation (DFCC). The Western DFC of 1,499 kilometer (km) will be from JNPT in Mumbai to Tughlakbad and Dadri near Delhi and cater to the container transport requirement between the existing and emerging ports in western India and northern hinterland. The proposed funding is under Special Terms of Economic Participation (STEP) between Japan and India. The value of the proposed loan is JPY 295 billion (about INR 20,000 crore), which is a soft loan with the repayment period of 40 years. With this loan, funding of the entire Western Dedicated Freight Corridor from Delhi to Mumbai is being taken care of and now the focus will be for speedy execution of the project, said the official.