study & analysis of public sector dry bulk market in india

Saturday, April 8, 2023 1

CHARTERING WING (“TRANSCHART”)MINISTRY OF SHIPPING,

GOVT. OF INDIA.

Study and Analysis of Public Sector Dry Bulk Market in India.


OUTLINE OF THE PRESENTATION

Objective of the Report Introduction to Transchart Policy followed by Transchart Ammendments in the Chartering Policy of Transchart Data Analysis of Transchart

o Analysis of Ship-Owners o Analysis of Cargo Size/Quantity o Analysis of Freight

Chartering Methodology of Transchart Findings and Conclusion


OBJECTIVE OF THE REPORT

To undertake an Exhaustive Research and Analytical study on Transchart i.e :

The No. of Ship’s Fixed/Capesize, Panamax, Supramax Ship’s Fixed by Transchart every Month/Year in the past 5 years (Mar ’08 to Feb ‘13) through Transchart.

The Cargo Quantity/ Cargo Sizes (Capesize/Panamax/Supramax) Imported/Chartered by Transchart in the past 5 years (Mar ’08 to Feb ‘13) from AUS/US/New Zealand to ECI.

The Ship-Owners with whom the Fixtures have taken place.


OBJECTIVE OF THE REPORT

The Freight rates in the past 5 years (Mar ’08 to Feb ‘13) on monthly/yearly Bss segregated w.r.t Panamax / Supramax / Capesize market segments.

The No. Of Capesize/Panamax/Supramax Fixtures undertaken by Shipowners in the past 5 years (Mar ’08 to Feb ‘13).

The trend of Freight rate for cargoes chartered (Capesize / Panamax / Supramax cargo size) from AUS / US / New Zealand to ECI by Transchart over a period of past 5 years (Mar ’08 to Feb ‘13) on monthly/yearly Bss.

The Chartering Policy followed by Transchart from the day of its inception and the Ammendmends in the Chartering Policy of Transchart over a period of time.


INTRODUCTION TO TRANSCHART

The Chartering Wing in the Ministry of Shipping is a service organization of Government of India popularly known as “TRANSCHART” in the shipping world.



The Shipping Co-ordination and Chartering organization (presently known as the Chartering Wing) in the Ministry of Shipping was set up in March, 1960 with broadly following functions:-

1. To Act As Clearing House Of Information In Regard To Availability Of Government Cargoes And Shipping Space In Indian/Foreign Ships With A View To Make Most Effective Use Of The Available Indian Tonnage.

2. To advise on the best and the most economical shipping arrangements for shipment of government cargoes and charter foreign flag vessels through the chartering committee when Indian Ships are not available.

3. Generally to co-ordinate and advise on all policy matters relating to shipping including shipping terms to be incorporated in import/export contracts as and when approached by the concerned Deptt./Psus.



With Effect From 1st Feb., 1993, Government Decided To Levy Chartering Service Charge In Respect Of Indian Vessels At The Rate Of 1% On Freight, Deadfreight And Demurrage Earned By The Indian Shipowners In Respect Of Fixtures Concluded Through Chartering Wing (Transchart) For Shipment Of Bulk Cargoes In Full Ship Load On Tramp Basis.

An amount of approx. Rs.132.96 Crores as 1% Chartering Service Charge has already been collected and credited to the consolidated fund of India by the chartering wing till September, 2010.


POLICY FOLLOWED BY TRANSCHART

As per the existing policy of the Government, all import contracts are to be finalized on FOB (free on board) / FAS (free alongside ship) Basis in respect of Government owned and/or controlled cargoes on behalf of Central Government Departments, State Government departments and Public Sector Undertakings (PSU) under them and in case of any departure there from, prior permission is required to be obtained from the Chartering Wing, M/o Shipping on case to case Basis.

Shipping arrangements are centralized in the Chartering Wing, Ministry of Shipping. in so far as Exports on Govt. account are concerned, the Govt. policy of C&F (cost & freight)/ CIF (cost, insurance & freight) exports by govt. departments/PSU’s and centralized shipping arrangements through the Chartering Wing was relaxed in the year 2001 with a view to increase country’s exports. The above Government policy have also been incorporated in the General Financial Rules (GFR) of the Government of India.



The Policy Of Buying On Fob/Fas Is Aimed At Retaining Control Over Shipping Arrangements Within The Country, So As To Enable Us To Maximize Utilization Of Indian Ships At Competitive freight rates and to save considerable foreign exchange by employing Indian vessels and also minimize outgo of foreign exchange by chartering foreign vessels at competitive freight rates. The Indian Vessels Are Given First Right Of Refusal Without Giving Any Price Preference. The Policy Is Ideally Suited Not Only In Normal Situation But Is Very Essential for ensuring arrival of strategically needed cargoes/materials on time to meet urgent requirements of the country and also in case of emergency/war like situations.



Key Benefits of the Policy:

o Internationally competitive Freight cover for users.o Maximum utilization of available Indian tonnage by giving first right of refusal

to Indian lines without any price preference.o Development /Expansion of Indian fleet by providing cargo support.o Timely coverage of requirement as per shipment schedule.o Avoid competition among Government Departments/PSUs for similar cargoes

at a particular point of time.o Safety of Import consignmentso Meet country’s shipping needs during War & Emergency


AMMENDMENTS IN THE CHARTERING POLICY

OF TRANSCHART

CIRCULAR 1 : (29TH SEPT. 1978)

o Government Policy To Maximize Import Contracts On FOB/FAS Terms And Sale Contracts On C&F/CIF Terms So As To Retain The Control Of Shipment In Indian Hands And Assist Indian Shipping To The Maximum Extent possible.

o The foreign exchange saving in Utilizing Indian Shipping may be kept in view while concluding contracts.

• CIRCULAR 2 : (22ND AUG 1985)

o A Monthly Consolidated Statement Indicating Brief Details Of All The Contracts For The Imports And Exports Finalized During Each Month Should Be Furnished To This Ministry By 15th Of The Following month on regular bss.

o The procedure to be followed for arranging shipment of Govt. Owned/controlled cargoes through the Chartering Wing (Transchart).



OF TRANSCHART

CIRCULAR 3 : (05th MAR 1993)

o Levying of “CHARTERING SERVICE CHARGES”

CIRCULAR 4 : (14TH OCT. 1993)

o Levying of “CHARTERING SERVICE CHARGES” from Indian Private Indentors.o Decanalisation.

CIRCULAR 5 : (27th FEB. 1996)

o Review of the Policy Regarding – Till Date



OF TRANSCHART


o Liner Trade Terms and Policy.

CIRCULAR 7 : (15TH NOV. 2001)

o Review of the Policy Regarding – Till Date o The Policy Of Centralized Shipping Arrangements Through Chartering Wing

has been Relaxed In Case Of Exports. Government Departments/PSUs Are Free To Finalize Export Contracts on FOB/FAS basis without seeking prior clearance from Ministry of Shipping (Chartering Wing).



OF TRANSCHART


o Liner Trade Terms and Policy.

CIRCULAR 9 : (06TH MAR. 2014)

• Revised methodology of Chartering vessels for shipment of cargoes on account of Government departments/PSUs.


DATA ANALYSIS OF TRANSCHART

ANALYSIS OF SHIP-OWNERS :

1. Total Fixtures by Transchart from Mar’08 to Feb’13 = 605

Total Panamax Fixtures = 426 Total Supramax Fixtures = 159 Total Capesize Fixtures = 20

2. Total Fixtures by SAIL through Transchart from Mar’08 to Feb’13 = 434




3. Total Fixtures by RINL(VSP) through Transchart from Mar’08 to Feb’13 = 115


4. Total Fixtures by MMTC through Transchart from Mar’08 to Feb’13 = 56

Total Panamax Fixtures = 26 Total Supramax Fixtures = 30



ANALYSIS OF CARGO SIZE/QUANTITY :

5. Total Tonnage imported/chartered by Transchart from Mar’08 to Feb’13 = 42.277 MMT

Total Panamax tonnage imported/chartered = 31.2960 MMT Total Supramax tonnage imported/chartered = 7.9830 MMT Total Capesize tonnage imported/chartered = 2.9980 MMT

o Total tonnage imported/chartered by SAIL = 29.5780 MMTo Total tonnage imported/chartered by RINL(VSP) = 9.5980 MMTo Total tonnage imported/chartered by MMTC = 3.1010 MMT

Total tonnage imported/chartered from AUS.= 34.0320 MMT Total tonnage imported/chartered from U.S. = 5.9230 MMT Total tonnage imported/chartered from N.Z. = 2.3220 MMT



ANALYSIS OF FREIGHT :

6. Freight rates for AUS/ECI Panamax cargo Biz. has fallen from $50.00 PMT to $16.50 PMT within a period of last 5 years from Mar’08 to Feb’13.

7. Freight rates for AUS/ECI Supramax cargo Biz. has fallen from $61.25 PMT to $19.95 PMT within a period of last 5 years from Mar’08 to Feb’13.

8. Freight rates for AUS/ECI Capesize cargo Biz. has increased from $5.00 PMT to $10.25 PMT within a period of last 5 years from Mar’08 to Feb’13.

9. Freight rates for US/ECI Panamax cargo Biz. has fallen from $73.00 PMT to $30.25 PMT within a period of last 5 years from Mar’08 to Feb’13.

10. Freight rates for NZ/ECI Panamax cargo Biz. has fallen from $64.50 PMT to $22.50 PMT within a period of last 5 years from Mar’08 to Feb’13.


CHARTERING METHODOLOGY OF TRANSCHART

The Present Working (functioning) Process Of Transchart:

STEP 1: The New Cargo Enquiry Is Mailed From Transchart To All The Empanelled Brokers Of Transchart In A Short Descriptive Format Followed By Individual Long Description Of The Rescpective New Enquiry.

STEP 2: The Brokers Reply With A Firm Offer Or (Vessel Name / Vessel Owner Details / Freight Rate / Demurrage Rate) To Transchart In Order To Fix The Cargo.

STEP 3: Transchart Will Counter Back With Lower Freight And Demurrage levels, if they do not get their target freight rate and demurrage levels.

STEP 4: Acceptance of the Freight and Demurrage rate, owners fixed through Broker.


CHARTERING METHODOLOGY OF TRANSCHART

Revised Chartering Methodology of Transchart: 06 March 2014 for Bulk Cargoes


FINDINGS AND CONCLUSIONS

1. Total Fixtures by Transchart from Mar’08 to Feb’13 = 605


2. Total Fixtures by SAIL through Transchart from Mar’08 to Feb’13 = 434




3. Total Fixtures by RINL(VSP) through Transchart from Mar’08 to Feb’13 = 115


4. Total Fixtures by MMTC through Transchart from Mar’08 to Feb’13 = 56

Total Panamax Fixtures = 26 Total Supramax Fixtures = 30



5. Total Tonnage imported/chartered by Transchart from Mar’08 to Feb’13 = 42.277 MMT

Total Panamax tonnage imported/chartered = 31.2960 MMT Total Supramax tonnage imported/chartered = 7.9830 MMT Total Capesize tonnage imported/chartered = 2.9980 MMT

o Total tonnage imported/chartered by SAIL = 29.5780 MMTo Total tonnage imported/chartered by RINL(VSP) = 9.5980 MMTo Total tonnage imported/chartered by MMTC = 3.1010 MMT

Total tonnage imported/chartered from AUS.= 34.0320 MMT Total tonnage imported/chartered from U.S. = 5.9230 MMT Total tonnage imported/chartered from N.Z. = 2.3220 MMT



6. Freight rates for AUS/ECI Panamax cargo Biz. has fallen from $50.00 PMT to $16.50 PMT within a period of last 5 years from Mar’08 to Feb’13.

7. Freight rates for AUS/ECI Supramax cargo Biz. has fallen from $61.25 PMT to $19.95 PMT within a period of last 5 years from Mar’08 to Feb’13.

8. Freight rates for AUS/ECI Capesize cargo Biz. has increased from $5.00 PMT to $10.25 PMT within a period of last 5 years from Mar’08 to Feb’13.

9. Freight rates for US/ECI Panamax cargo Biz. has fallen from $73.00 PMT to $30.25 PMT within a period of last 5 years from Mar’08 to Feb’13.

10. Freight rates for NZ/ECI Panamax cargo Biz. has fallen from $64.50 PMT to $22.50 PMT within a period of last 5 years from Mar’08 to Feb’13.

study & analysis of public sector dry bulk market in india

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