I N D U S T R Y    N E W S

First of two 1,740-TEU vessels delivered to Samudera

Samudera Shipping Line received the 1,740-TEU Sinar Sumba from Guangzhou before its maiden deployment from Hong Kong in its new Korea-China-Malaysia service (KMS) this month. The US$83 million Sinar Sumba was put into service with another vessel and will help the shipping group to attain its long term strategy of providing flexibility in fleet deployment and stability in overall vessel operating costs, said a company statement. The delivery of the second of the two 1,740-TEU ships is expected towards the end of the year, said a Samudera statement.

Maritime India - Mumbai

Govt not to extend export sops as rupee falls

A host of sops given last year to Indian exporters to help tide over the sharp appreciation of the rupee will not be extended by the Centre beyond Sept 30, when the sops are set to expire. This is on account of the rupee depreciating about 10 per cent against the US dollar since April this year. The rupee is expected to continue to weaken from its current level of nearly Rs 43.

The sops that will be rolled back include interest rate subvention on pre- and post-export credit as well as the 1-3 per cent increase in duty drawback and DEPB rates, which were announced in various phases last year. The enhanced duty drawback and DEPB rates will be rolled back to the values which they were in before the sops were announced.

However, service tax exemption to export-related services will continue.

"The sops are likely to be rolled back. The decision is likely to be formally announced later this month," said Commerce Secretary Gopal K Pillai. Exporters will, therefore, get a two-month cushion, allowing them to adjust their long-term export contracts accordingly.

Predictably, the export community is upset. FIEO president GK Gupta said: "The depreciation in the rupee has not benefitted exporters as they had covered their exposures in the forward market. The rupee has depreciated more than it was expected. Removal of sops will hit us."

While the finance ministry will be responsible for the roll back of the hiked draw back rates and interest subvention in pre- and post-export credit, the commerce ministry will issue a order on ending the enhanced DEPB rates. Pillai unveiled a single-account drawback disbursement system for exporters. The new system will do away with the practice of having bank accounts in each sea and inland port to avail drawback claims.

Maritime India - New Delhi

Suez Canal Authority, Savannah area ports promote closer ties

The Georgia Ports Authority (GPA) and the Suez Canal Authority have signed an agreement to jointly promote the all-water shipping route between Asia, the Indian subcontinent and the North American east coast and the Port of Savannah via the Suez Canal. "The Suez Canal has become a crucial canal for world trade and, in recent years, has experienced rapid growth," said GPA's chairman of the board of directors Steve Green. "In all of our key Suez trade lanes, whether Southeast Asia, the Indian Subcontinent, or the Middle East, our growth is outpacing most other east coast ports."

The MOU agreement gives both parties the opportunity to foster a strong working relationship and exchange information and expertise in the areas of marketing, operations and information technology. "This strategic alliance will allow GPA and the Suez Canal Authority to improve services for our customers and generate new economic opportunities for Georgia and the south-eastern United States," said GPA's executive director Doug Marchand in a statement.

Last year, 67 per cent of GPA's total increase in trade, or an additional 296,989 TEU, was via the Suez Canal. "In the last 18 months, we have doubled the number of our Suez services, even in the midst of a US economic downturn," said Mr Marchand. "Our Suez trade will only continue to accelerate in the years ahead and this partnership will lay the ground work for even stronger growth."

Maritime India

IATA chief sees big losses, bleak future on fuel, eco, security woes

The International Air Transport Association (IATA) chief took a bleak view of the industry suggesting that it would suffer a US$2.3 billion loss this year because of escalating fuel prices and fears-driven environmental and security concerns. Speaking at its annual general meeting in Istanbul, IATA chief executive Giovanni Bisignani reversed his earlier upbeat forecast for the industry that suggested $4.5 billion profit by subtracting $6.8 billion from that cheerful estimate.This is based, he said, on figures using a $106 a barrel price against the earlier reckoning of $86 a barrel. If oil hit $135 a barrel until the end of the year, losses would surpass $6 billion, he added."For every dollar that the price of fuel increases, our costs go up by $1.6 billion," said Mr Bisignani.IATA said the industry would spend $176 billion on fuel in 2008, accounting for 34 pc of its operating costs. "In the last six years, airlines improved fuel efficiency by 19 pc and reduced non-fuel unit costs by 18 pc. There is no fat left," he said."Security is an uncoordinated mess," he said. "Since 2001 airlines and their customers have paid over $30 billion for security measures. For this we get more frustration than value. Infrastructure cannot cope; governments are not cooperating. "There was similar bureaucratic chaos on the environmental front.

Short-sighted governments are pushing us back. With oil at US$130 per barrel we have the biggest incentive of any industry to improve environmental performance. Governments fail to understand this, they remain fixated on punitive economic measures." We face a bill of EUR6.4 billion for a misguided and unilateral proposal that will inspire international legal battles but do very little for the environment. These are reckless decisions when the industry is in crisis and oil prices have changed the game completely," Mr Bisignani added.

Maritime India - New Delhi

EL AL posts quarterly loss of $50 m despite record revenues

EL AL Israel Airlines Ltd has posted a net loss for the first quarter of 2008 of US$49.9 million, compared to a net loss of $15.3 million in the same quarter last year.On the other hand, company revenues reached a record total of $471.5 million, compared to $388.6 million in the comparative quarter last year, an increase of 21 pc.The higher revenues stem largely from the 22 pc increase in passenger revenues, the 12 pc year on year growth in cargo revenues, and a rise of 42 pc in revenues from other sources such as duty free sales, aircraft leasing and from maintenance services provided to other entities. Gross profits in this quarter totalled $54.9 million, an increase of 12 pc year on year; the operating loss amounted to $47.4 million; and the company's cash balance at the end of the quarter was $269.7 million, compared to $260.2 million at the end of last year, up 4 pc. Losses in the quarter include registered financing expenses of $9.1 million as a result of the transfer to international accounting standards (IFRS). The Israeli national carrier also registered a provision of $20 million based upon the possibility of reaching an agreement with the US Department of Justice concerning its international air cargo price-fixing probe.

Haim Romano, EL AL's president and CEO, said: "In spite of the international crisis, the increases in fuel costs and the erosion of the exchange rates, all of which affected the results, the company recorded record revenues for the first quarter," he said."The main influence on the gross loss during the quarter stems from the 69 pc increase in fuel prices." Mr Haim Romano added: "The aviation market in Israel has been exposed to increasing competition over the past two years. Foreign carriers have increased capacity by 35 pc. Nevertheless, our market share grew to 42.5 pc. We also managed to preserve a high load factor of about 80.7 pc on our aircraft. We are confident that we will continue to face the challenges successfully over the coming year".

Maritime India

World Airways to operate three freighters for Lufthansa Cargo

Lufthansa Cargo and World Airways have extended their existing contract for 15 months beginning July 1 for three World Airways MD-11 freighters to operate between Europe and the United States on behalf of Lufthansa Cargo.World Airways has been operating continuously for Lufthansa Cargo since 2006. "World Airways has performed very reliably for Lufthansa Cargo between New York, Chicago, Los Angeles and Europe, and we are pleased that they have demonstrated their confidence in us by renewing our current contract," said Jeff Sanborn, chief marketing officer of World Airways.Lufthansa Cargo operates 19 MD-11 freighters and utilises three additional MD-11 freighters from World Airways, a joint statement said. In 2007 Lufthansa Cargo transported 1.81 million tonnes of freight and mail shipments and flew 8.45 billion revenue tonne kilometres (FTKT) in 2007. Most of the cargo business is handled via Frankfurt Airport, Europe's largest freight hub.

Maritime India

India, China to have common stakes in future

Ties between India and China have witnessed dramatic changes recently and the two Asian giants have many stakes in common in future, including development and environmental concerns, India's ambassador to Beijing Nirupama Rao has said.

Both countries shared many common stakes in the future, such as developing their economies and grappling with environmental issues, Rao said at a reception hosted for a 100-member strong visiting Indian Youth Delegation in Beijing.

The changes in ties have been reflected among others things, in the surging trade volume between the two countries and stake holders going beyond government-to-government level to cover scholars, cultural personalities, media persons and youth, she added.

The delegation comprises 'distinguished young persons' under diverse categories, including Chinese language and studies, National Service Scheme, academics, panchay-ati raj, media, culture and sports.

The group, third under Indo-China Youth Exchange Programme since 2005, is led by Secretary, Department of Youth Affairs, S K Arora, who said people-to-people contact was at the core of a 'sustainable and lasting friendship' and youth exchanges would have a 'ripple effect'.

He said that possibility of exchange of young entrepreneurs and civil society volunteers between the two sides was also being explored.

Maritime India - New Delhi

Godrej Agrovet forms joint venture with Tyson Foods

Poultry feed major Godrej Agrovet has forged a 49: 51 joint venture with the US-based Tyson Foods in which the latter would hold a majority stake. A new joint venture company Godrej Tyson Foods has been formed for poultry processing and marketing.

It is expected to combine Tyson's processing and product development expertise with Godrej's strengths in foodservice marketing and supply chain management. In addition to Godrej Agrovet's existing brands such as Real Good Chicken and Yummiez, the joint venture company would launch new international chicken products/brands and at the same time develop innovative poultry solutions for the foodservice industry and modern retailers. While the Rs 1,200-crore Godrej Agrovet is a market leader in animal feeds, it also has other businesses such as agri-products and oil palm. The $26.9-billion Tyson Foods is one of the world's largest meat processor and food production companies.

Godrej Tyson Foods would focus on serving the growing demand for quality poultry in India with processed and value-added chicken products. "Today's convenience-seeking consumer is looking for great-tasting, safe, and healthy poultry products that don't compromise quality. The joint venture will deliver new processed and value-added products to satisfy these needs," added Mr Yadav, CEO of Godrej Agrovet.

Commenting on the newly formed joint venture, Mr Rick Greubel, President (International), Tyson Foods Ltd, said: "The $3-billion (Rs 12,000 crore) Indian poultry market represents a tremendous opportunity with processed and value-added chicken currently comprising only 6 pc of the market." The Indian poultry market has grown faster (10 pc CAGR) than other developing and developed markets but per capita consumption at 1.8 kg/capita/year is comparatively lower and presents a tremendous opportunity for future growth.

Maritime India - Mumbai

India slips to 71st position in global trade index

The World Economic Forum's Global Enabling Trade Report 2008 released recently has placed India in 71st position in the global enabling trade index, largely due to the tariff barriers adopted by the country. The country continues to adopt restrictive market access with tariff barriers "representing a more serious impediment than non-tariff barriers", the reports has observed. With regard to market access, the country has been placed at 105th position among 118 countries surveyed in the report. Hong Kong and Singapore have been ranked at the top as these economies are considered most open to international trade and investment as part of their economic development strategy.

The index covers four areas, namely, market access, border administration, transport and communications infrastructure and the business environment. Sweden and Norway followed, and to complete the top 10, came Canada, Denmark, Finland, Germany, Switzerland and New Zealand. The US has been ranked 14th, helped by a top-notch transport system, but brought down by cumbersome Customs procedures and the UK has been placed two notches below the US, largely because of its high costs. China comes 48th because imports are subject to severe tariff and non-tariff barriers despite the country's accession to WTO.

Maritime India - Mumbai

US cuts trade benefits for India, Brazil

India Brazil and 23 other developing country products will no longer receive US duty-free treatment, the US Trade Representative's office said. The decision was the result of an annual review of the Generalized System of Preferences, a program created in 1974 that allows 132 developing countries to export nearly 5,000 products to the United States without paying tariffs. The United States imported $30.8 billion worth of goods under the GSP program in 2007.

As a result of the latest review, 25 products that accounted for about $1.4 billion of the 2007 imports will no longer receive duty-free treatment, USTR said. Partly because of frustration with India and Brazil's role in the Doha round of world trade talks, Congress passed tougher criteria for the GSP program in December 2006. Lawmakers such as Sen.

Charles Grassley, an Iowa Republican, said they were annoyed India and Brazil received duty-free treatment under the program but were refusing in the Doha round to open their own markets to more imported goods.

Maritime India - Washington

Lack of infra facilities increases detention time at ports

The average pre-berthing detention time at major ports in the country has gone up by nearly 34 pc in 2007-08 over the previous year due to lack of sufficient infrastructure facilities at these ports.

The average pre-berthing detention time at major ports during 2007-08 stood at 11.26 hours, compared with 8.43 hours in 2006-07. As a result, domestic exporters and importers are feeling the pinch as they have to fork out higher freight charges. Earlier, demurrage charges as a percentage of total freight charges was 3 to 4 pc, while currently it is 5 to 7 pc of the total freight charges. Shipping companies have to pay demurrage charges for docking their ships for a longer-than-stipulated time by the port due to congestion. Experts say that the immediate spurt in the pre-berthing detention was on account of other factors such as bad weather, breakdown of material handling equipment and labour issues that had further compounded the problem.

Sailesh Rao, partner, Ernst & Young, said: "Ports at the east coast of India have to face rough weather. During the last monsoon they were hit by cyclones, which had delayed the arrival and departure of vessels. This resulted in higher pre-berthing detention hours at ports.

Further, frequent labour issues at ports like JNPT Cochin Port have also contributed to high detention hours." For instance, the pre-berthing detention at the Paradip port on the east coast has increased by a whopping 2,445 pc from 1.41 hours in 2006-07 to 35.88 hours in 2007-08. Similarly, the detention hours at Haldia Dock at the Kolkata Port Trust rose by 37.42 pc from 25.68 hours to 32.29 hours.

JNP, which frequently gets affected by labour strikes, has also witnessed an increase of 74 pc in its pre-berthing detention hours during 2007-08 over the previous year. Experts also argue that the upgrade of infrastructure facilities at major ports is not able to keep pace with the increase in the cargo traffic, which is showing 15-20 pc growth per annum.

Aravind Mahajan, executive director, KPMG, said: "Long process for the clearance of major expansion and modernisation of port infrastructure projects are putting pressure on the existing facilities that is leading to port congestion. Actually the projects which are."

Interestingly, two of the 12 major ports in the country had managed to reduce their pre-berthing detention hours considerably. Kandla Port, which handled the highest amount of traffic of 64.89 million tonnes during 2007-08, has witnessed its pre-berthing detention hours reduce by 32 pc from 38.64 hours to 26.16 hours during the same year.

Similarly, the pre-berthing detention at Tuticorin has also come down by 46.66 pc to 3.84 hours.

Maritime India - New Delhi

New Mangalore port box traffic zooms 103 pc in first quarter

The New Mangalore Port Trust (NMPT) witnessed a growth of 103 pc in container traffic during the first quarter of the current financial year. The port handled 7,559 TEUs of containers during the first three months of the current fiscal against 3,713 TEUs in the corresponding period of the previous fiscal. In a press release Mr P. Tamilvanan, Chairman, NMPT, attributed the growth in container traffic to factors such as infrastructure addition, efficient handling by the port workers, and better planning by the port officers and staff.

Two container handling reach stackers have been added at the port, and the capacity of stack yard has been increased. The increase in arrival of mainline vessels from East and West African countries to Mangalore Port with raw cashew containers is a boon to the trade here, he said.

Expressing happiness over the marketing efforts taken by the port in highlighting the facilities available at NMP, Mr Tamilvanan thanked the supportive role played by the Kanara Chamber of Commerce and Industries and the Federation of Karnataka Chambers of Commerce and Industries in this regard.

Maritime India - Mangalore

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