There are a few reasons that could be attributed to the steeply falling fortune of the shipping fraternity and one among them is the declining demand. According to Sunil Mukherjee, owner of Payal Logistics, a small-sized logistics service firm in Kolkata, “The overall industry scenario since last year has been grim and it is being increasingly reflected in the trade scene of nations.”
Mr Mukherjee echoed a largely prevalent sentiment among the shipping community. Factors like inflation, hike in key interest rates by RBI and a hugely volatile and uncertain global market left vulnerable by the European economic turmoil and US sovereign debt crisis has been the undoing of the shipping fraternity in India.
According to experts in the shipping sector, demand is not exactly rising in proportion with rise in supply of new vessels ordered in 2008, when the market was still dynamic. According to a senior official at Shipping Corporation of India (SCI), ships that were ordered during the 2008 recession are coming up for delivery on order books now, leaving shipping firms with no exit clause. With practically no demand at hand, this kind of move is enough to dent the shipping sector enormously.
Mr Mukherjee also pointed out that order books with smaller shipping agencies have shrivelled up drastically in the past few months. Although the large shipping companies are not impacted to such an extent, they are nevertheless bearing the brunt of the dwindling fate of the shipping sector.
Struggle to continue
The fall in demand of bulk material like iron ore, crude oil and coal have hurt the shipping sector and has acted as a major setback. According to the SCI official, bulk vessels constitute nearly 40% of the total fleet size at SCI. The mining ban on iron ore in Karnataka due to export and environment-related concerns has also hit the export scene in the country. Talking about the ban in the state, P K Mukherjee, managing director at Vedanta group firm Sesa Goa said that even if the ban is lifted, all mines would not be allowed to commence operations at one go. Sesa Goa is counted among India’s largest producer and exporter of iron ore in the private sector.
Most industry experts predict the shipping industry’s situation will remain thus and a clear picture will emerge not before 2014. Therefore, no respite seems to be at hand for Indian shippers any time soon. However, with the mutual trade scene improving in Asia and Africa, economies in these continents have some ray of hope in case of a global meltdown. Straddled amidst a chaotic freight scene, India shippers now cling onto the hope that issues will be resolved soon.
Priyanka Roy Chowdhury |
There seems to be no respite for the shipping community across the world. In the past year, although for a short while, things seemed like going right for the shipping sector. However, the turn of the New Year has not brought any new tidings and Indian shipping firms are struggling to keep operations afloat. 
