WEEKLY UPDATES RELATED TO SHIPPING NEWS TO

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1 Rlys formulates new policy for connectivity to coal & iron ore mines The Railways has formulated a new policy, "Policy for participative Models in Rail Connectivity and Capacity Augmentation Projects", as part of its endeavour to provide rail connectivity to coal and iron ore mines, the Minister of State for Railways, Mr Adhir Ranjan Chowdhury, said in written reply to a question in the Lok Sabha recently. The models under the project comprise Non-Government Railway Models, Joint Venture Model, Railway Projects on Build-Operate-Transfer awarded through Competitive Bidding, and Capacity Augmentation-Annuity Model, he revealed. State governments, local bodies, beneficial industries, ports, large import and export companies, cooperative societies and other body corporates, infrastructure and logistics providers, etc. could participate based on the model that suits their business interests, the Minister said. Mr Chowdhury also told the Lower House that under the 12th Plan, the Railways has strongly emphasised on capacity augmentation works like new lines, doubling, gauge conversion, dedicated freight corridors (DFCs), etc., that would result in greater flexibility of operations to serve coal and iron mines, industrial hubs, etc. and facilitate lifting increased loads and running more freight trains. JN Port handles 4.26 m TEUs in Jawaharlal Nehru Port Trust (JNPT) registered a throughput of 4.26 million TEUs for , marginally lower than the 4.32 million TEUs achieved in Among the individual terminals, APM Terminals Mumbai (GTI), however, handled a stupendous million TEUs, crossing the significant 2-million TEU mark. JNPCT and DP World Nhava Sheva (NSICT) handled million TEUs and million TEUs, respectively, according to sources. Mumbai Port handles all-time high mt in growth of 3.3 per cent over the previous year s million tonnes. All major commodities, except for iron and steel, have shown improvement. The increased throughput of almost 2 million tonnes is especially noteworthy against the general sluggishness witnessed in ex-im trade worldwide, stressed a release. In fact, all the Major Ports together recorded a negative growth of 2.6 per cent in The constant interaction with Port users and finetuning of policies have led to this growth in traffic. Incentives extended in the form of additional free days, concessional storage charges, etc. have contributed to the confidence of the trade in Mumbai Port. The Port has retained its character as the major port handling a wide range of commodities, including break-bulk, project cargo, POL, coal, chemicals, automobiles, cement, fertilisers, foodgrains, etc. Besides, it continues to be the No.1 cruise port of India with 40 international cruise calls during the season, the release highlighted. Paradip Port throughput rises 4.24 pc in Paradip Port's throughput rose by 4.24 per cent to million tonnes (mt) in , the second-highest in 51 years. In the previous year, it had handled mt. The Port managed to achieve the distinction despite a 9.11 per cent fall in exports of iron ore and decline in raw material imports. Import of coking coal too dropped by per cent, sources said. According to Paradip Port Trust (PPT), the jump in traffic handling was possible due to the steep rise in coal exports, which shot up by per cent to mt. Similarly, petroleum, oil and lubricants (POL) traffic rose by 9.11 per cent to mt and containerised traffic grew by 57 per cent to 1.71 lakh tonnes. The average pre-berthing waiting time of vessels also improved significantly, sources added. Mumbai Port has achieved an all-time high cargo throughput of million tonnes in , clocking a

2 Antwerp port able to develop further The recent approval of the land use plan delimiting the Port of Antwerp is good news for investments by various companies. As a consequence, the Port of Antwerp offers a secure future for decades to come. It seems that the delimitation of the port area will soon be finally established, as the decision by the Flemish government is now being studied by the Council of State. Once the decision has been approved, various investment projects can go ahead. These include: * The Schijns and Waasland logistics parks (further phases) * Expansion of the Main Hub and Freight Village for rail transport * A holding dock for barges * Two truck parking spaces at the Tijsmans tunnel and Goor dike * Private investments by Total, Vopak/AET, ITC Rubis and KatoenNatie * Construction of part of the wind farm on the left bank As well as "inward expansion" (i.e. rezoning of areas within the port), the plan also provides space for new developments in the 1,000-hectare Saeftingen Development Area. This decision provides legal certainty both for existing companies and for future investors, who can now see what is possible on the port sites on the left and right banks of the Scheldt between now and In this way, the Port of Antwerp will be able to maintain its position as one of the leading maritime logistics and industrial complexes in Europe. The Ten-Year Plan successfully demonstrated how important it is to have a long-term vision and clearly defined framework for port development. This positive choice of the Port of Antwerp as the engine of the Flemish economy also has consequences for local residents and farmers who will have to leave their home or land. The Port of Antwerp is very much aware of this, and subscribes to the support plan that was drawn up to help those concerned. By creating jobs (no fewer than 60,000 in the port area) and added value (a direct amount of 10 billion euros as much as Flanders spends on education), the port also generates a very significant "social return", a release stressed. CaroTrans expands Shanghai to US LCL service network with direct Atlanta service & a second weekly service to New York CaroTrans, a leading global NVOCC and ocean freight consolidator, has announced the addition of two Shanghai to US LCL services to its comprehensive Asia-US service network. The first sailing from Shanghai to Atlanta was scheduled for April 7. The expanded New York service commences with a May 5 departure from Shanghai. CaroTrans Asia-US network features professional CaroTrans sales and support teams at origin and destination. The weekly Shanghai-Atlanta service offers expedited IPI (inland point intermodal) services to locations throughout the US Southeast and a 21-day transit, the shortest in the market. Cargo will be available within 24 hours at Atlanta Forward Air CFS. CaroTrans second weekly Shanghai to New York service provides added flexibility, fast transits and broad coverage of the Northeast with express IPI services offered throughout the region. These direct services reduce cargo handling, providing greater cargo integrity. Visakhapatnam Port breaks long-standing iron ore CLO loading record Visakhapatnam Port recently established an all-time record in loading iron ore CLO in bulk in a day. As per an official release, 36,975 tonnes of the commodity, on account of JSW Ispat Steel Ltd, was loaded onto the vessel m.v. POS AVENTURIN on April 4 at West Quay-4, surpassing the previous best of 33,116 tonnes achieved in January Kamakshi Shipping was the stevedore and Sree Binni Shipping the steamer agent for the vessel, the release said. KoPT urged to take key measures to improve Port operations THE Association of Shipping Interests in Calcutta (ASIC) has urged the Kolkata Port Trust (KoPT) to examine the scope of commissioning private dredging majors to

3 improve navigability on the Hooghly River. Currently, the public sector Dredging Corporation of India handles dredging operations on the Hooghly. "The deteriorating condition of the Hooghly river calls for definite plans to improve the river draught on a sustained basis," the Association said in a memorandum to Mr R. P. S. Kahlon, Chairman of KoPT. Other measures highlighted to improve the functioning of the Port include speedy clearance and award of contracts for various projects, reviewing the land policy to encourage private participation, and avoiding collecting additional charges from shipowners and shipping lines beyond the scope of Scale of Rates prescribed by the Tariff Authority for Major Ports (TAMP). Further, the memorandum lays emphasis on the need for additional facilities at the Diamond Harbour anchorage to boost midstream operations, revival of rail links at Netaji Subhas Dock (NSD) right up to 3NSD, proper maintenance of tugs, and better coordination with the Customs Department. ASIC has also suggested that berths 2 and 8 of Haldia Dock cater to geared vessels only, in order to avoid preberthing detention. Other suggestions include carrying out periodic dredging at the dock's lockgate mouth to facilitate large-size vessels with larger average parcel sizes. Shipping Ministry awarded 14 PPP port projects The Union Shipping Ministry has awarded 14 public-private partnership (PPP) port projects, which will bring in an additional capacity of 80 million tonnes per annum (mtpa) at an investment of Rs 5,600 crore, as FY13 draws to a close Overall, 26 port projects have been awarded, bringing in a capacity augmentation of 114 mtpa. In addition, the Government has awarded a Rs 785-crore project for development of a ship repair facility at Cochin Port. The Government could award only three projects in FY12, which included the Rs 8,000-crore fourth container terminal at Jawaharlal Nehru Port. The project will be up for a re-bid in the next financial year. For FY14, the Shipping Ministry plans to add a capacity of 250 million tonne through public and private investment. Most of the projects awarded this year have spilled over from last year. Even so, the Ministry is patting itself on the back for the number of projects awarded this year, the meagre capacity enhancement notwithstanding. We have constantly been monitoring the award of projects and expediting the clearances for projects. This year, the Prime Minister has kept a close watch on the status of infrastructure projects of the country, said a senior Shipping Ministry official. The increase in capacity has been accompanied by a fall in traffic at the 12 major ports. During April-February 2013, total cargo handled at major ports came down by 2.5 per cent to 498 million tonnes. The target given by Finance Minister P Chidambaram to the shipping ministry for FY13 involved a total investment of Rs 35,000 crore and a capacity addition of 244 million tonnes. The Shipping Ministry has managed to achieve 18 per cent of the targeted investment. While the industry had called the target given by the PM unrealistic, the Government felt that by setting a high target it could achieve much more than it could by eyeing a realistic number. Low tariff forces private bidders to keep off Kochi port project The Kochi Port s bid to get private investors to develop a bulk cargo terminal has failed as the regulator-determined tariff is said to be uneconomical. The port had proposed to develop the terminal exclusively to handle coal and fertiliser at the existing berths at Ernakulam wharf, which were under utilised following the shifting of container terminal operations to Vallarpadam. Though five firms had responded initially, none of them finally put in their bids as the rates fixed by TAMP for coal handling was said to be too low. Officials associated with the project said that the rates fixed by TAMP at Kochi are at Rs a tonne while in Vizag, the rate was Rs The rate at Mormugao Port is Rs 183 and the rates in the two terminals of Tuticorin were at Rs per tonne and Rs , respectively.

4 The rates fixed for Kochi are too low and it would be difficult to attract potential bidders for the project, the officials said. The port management now proposes to increase the draft at these berths to 14.5 metres so that the port can attract larger vessels, which would make the port more economical for users. The development of a deep berth to handle coal and fertiliser with proper rail connectivity will help units not only in Kerala but also in western Tamil Nadu. The port is already doing dredging at Vallarpadam to create a draft of 14.5 metres. This work can be extended to Ernakulam Wharf and additional investment would be only about Rs 25 crore. Once it is developed, Kochi will certainly emerge as the only major port with deep drafted berths to handle coal, said the officials. SCI to enter dredging business Shipping Corporation of India (SCI), the largest shipping company in the country, plans to enter the lucrative dredging sector. Shipping Secretary P.K. Sinha said on Friday that the government-controlled company will either buy or hire dredgers to start the new venture. Dredging is the process of excavating or removing soil or rock from below water using dredgers. The objective is to create deeper waterways to improve navigation of ships. Dredging has tremendous business potential as almost all ports in the country need to undertake annual maintenance dredging to keep up their water depth. Besides, several new port projects including two Major Ports are being planned which require capital dredging. SCI will be the second public sector undertaking in the dredging business. Dredging Corporation of India, the largest player, is majority owned by the Union Government. Sinha said the capacity of the Dredging Corporation and those of the private players is not enough to meet the growing demand for dredging. SCI could tie-up with one or two Major Ports for maintenance dredging. This will not only help the company have assured business but also help it raise funds for acquiring dredgers, Sinha explained later. Dredging Corporation is also trying to tie-up with ports to raise funds for buying additional dredgers. Referring to the developments in the ports and shipping sectors, Sinha said the Government is considering an incentive scheme to boost coastal shipping. Indian shipping companies to stay afloat and regain strength in today challenging times : INSA The Indian National Shipowners Association (INSA) would like to bring to your notice that the current disturbing trend of holding Directors of shipping companies liable for criminal prosecution for incidents onboard ships. Generally, the concept of vicarious liability, wherein the Master or Principal is held liable for acts or omissions of the servants or agents, does not apply to criminal law. Therefore, in the event of an offence occurring on board a vessel, the director of a company cannot be held responsible as there was no actual commissioning of the wrongful act on his part. With respect to non-executive directors, criminal culpability will depend on the role of the said director in the acts of the company. When a particular sector of the economy is in deep turmoil, it needs urgent and specific inputs and support related to finance, business opportunities etc. Such expertise is often availed from/in the form of non-executive or independent directors. The negative trend of criminal culpability being a threat will keep specialized talent away from the shipping industry. In this scenario, INSA is seriously disturbed at the current misdirected and regressive trend of holding directors/nonexecutive directors of shipping companies liable for actions taken by ship personnel in certain unique circumstances.

5 Visakhapatnam Port heading to develop into landlord port The Visakhapatnam port will turn into a landlord port in a few years once the process for investment in new berths and strengthening of existing berths by Build, Own, and Transfer (BOT) operators is completed. The Public Private Partnership (PPP) mode of investment is being sought in tune with the Government of India's policy to corporatise all major ports in phases. Once all the berths under the PPP route become operational, it will be the job of the Visakhapatnam port management to collect royalty as agreed upon at the time of signing the concession agreement with the BOT operators. VPT Chairman Ajeya Kallam recently said that investment on nine PPP projects, some have been awarded and the rest are in various stages of finalisation, was Rs.2,124 crore. This apart, Rs.800 crore would be invested in infrastructure such as dredging at inner/outer harbour and logistical support, he said. The Maritime Agenda evolved by the Ministry of Shipping envisages an investment of Rs.14,000 crore in the next 10 years of which Rs.8,000 crore will be through the PPP mode. As part of a plan to decongest traffic at the main port, the VPT is pursuing vigorously the proposal to develop a satellite port on its own land at Bheemunipatnam. Detailed feasibility report is also being prepared by the Indian Maritime University to go ahead with the work under the PPP route after getting clearances from the Centre. Railways falls short of freight target during Indian Railways have carried 1, million tonnes (mt) of revenue earning freight traffic during , which is 15 mt less than the budget estimates. The freight carried, however, shows an increase of mt over the freight traffic of mt carried during the corresponding period last year, an increase of 4%, said the railway ministry on Wednesday. During March, the revenue earning freight traffic carried by Indian Railways was mt. Railways carried mt during the same period last year, showing an increase of 4.64%. Far East India Express now calls Port Pipavav Beginning April 2013, the Far East India Express Service (FIX) has started calling APM Terminals Pipavav. The FIX service is a consortium operated by Hanjin Shipping, STX Pan Ocean and KMTC. A total of six vessels of 4300 TEU s are deployed on this service.on April 5, 2013, STX Pan Ocean s vessel M.V. STX Patraikos made its maiden call at the Port of Pipavav. The port rotation for the FIX Service is: Kwangyang Busan Shanghai Ningbo Kaohsiung Singapore Nhava Sheva Pipavav Karachi Port Klang Singapore - Kwangyang. UN to Launch Campaign Against Illegal Trade The United Nations tourism and crime agencies have plans to launch a joint public awareness campaign this spring with the aim to reduce demand for illegal goods and services that fund transnational organized crime, the Filipino BusinessWorld reports. The World Tourism Organization and the United Nations Office on Drugs and Crime will seek support from the global tourism sector through the participation of hotel chains, travel agencies and airlines to spread the message that the demand for some products can have devastating effects on the lives of innocent people, on wildlife or on cultural property, the U.N. bodies explained in a written statement.

6 Tourists, now reaching more than 1 billion each year, must be aware of the types of illicit goods and services to sever financial arteries that fuel these forms of illicit trade, said Yury Fedotov, UNODC executive director. US Trade Deficit Contracted in February The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, reported exports in February reached $186.0 billion and imports totaled $228.9 billion, resulting in a goods and services deficit of $43.0 billion, down from $44.5 billion in January. February exports were $1.6 billion more than January exports of $184.4 billion, and imports were $0.1 billion more than January imports of $228.9 billion. U.S. containerized imports and exports. But even slow growth is better than what the Asia-Europe trade may be facing. And, with an armada of new, big ships scheduled to enter service this year, ocean carriers will be challenged to sustain the level of rates they achieved in 2012, when they managed supply and demand through a combination of slow-steaming, idling of vessels and consolidation. Shipping in other trades looks more optimistic. The nearsourcing trend that has shifted more manufacturing to Mexico and South America, combined with strong automobile production and new trade agreements, is bolstering the U.S.-Latin America market. And in the Far East, the intra-asia trade again is likely to post the most rapid growth of any trade, driven by the manufacturing prowess of China and Southeast Asia and a growing, consumer-minded middle class. In February, the goods deficit fell $1.5 billion from January to $60.2 billion, while the services surplus was basically flat from January at $17.3 billion. Although exports of goods rose $1.3 billion month-to-month to $132.2 billion, imports of goods dropped $0.1 billion to $192.4 billion. Exports of services increased $0.2 billion to $53.8 billion, and imports of services improved $0.2 billion to $36.5 billion. US Senate to Study Impact of Panama Canal Expansion U.S. Senate Committee on Commerce, Science and Transportation will hold a hearing on April 10 at 2:30 p.m. EDT titled Expanding the Panama Canal: What Does It Mean for American Freight and Infrastructure? The goods and services deficit decreased $1.6 billion from February 2012 to February Exports were up $5.8 billion year-over-year, or 3.2 percent, and imports were up $4.2 billion, or 1.9 percent Annual Review & Outlook - Maritime With much of Europe mired in recession, the U.S. economy chugging along slowly and Asia growing at its slowest rate in years, it's looking like another year of slow growth for The hearing will explore how the Panama Canal expansion will change the movement of freight into and throughout the U.S. and explore the public and private infrastructure investment needed to meet these changing freight patterns. Now that the Panama Canal is being expanded to allow larger vessels, the U.S. needs to develop a comprehensive transportation infrastructure strategy for the next century, said Sen. Jay Rockefeller, D-W.Va., chairman of the

7 committee, in a written statement. We cannot be caught flat-footed when ships twice the size of current vessels begin to cross from the Pacific to Atlantic oceans and want to do business with our ports. The hearing will be Webcast live via the Senate Commerce Committee. *****************************