SHIPPING

In preparation for becoming shipping Hub of Asia:

Certificate course on Shipping Law and Practice

The Institute for the Development of Commercial Law and Practice (ICLP) in collaboration with the Ceylon Chamber of Commerce (CCC) launched the ICLP-CCC Certificate Course on Shipping Law and Practice.

Founder Director ICLP Kanag-Isvaran P C addressing the gathering from the head table. The others are CCC Secretary-General and CEO Harin Malwatte (ICLP Director), Justice P.A. Ratnayake- Chairman of the Members of the Faculty, ICLP Course Director and Secretary General S. S. Wijeratne and ICLP Director Dr. Harsha Cabral P.C.

The inauguration of the first course was held on the January 23, at the ICLP premises and the organizers hope to make this a regular course in the future with the experience from the first and keeping with the demands of the sector.

Sri Lanka is on its way to becoming a shipping hub for South Asia. The Sri Lankan shipping industry has the capacity to expand and grow into a major international hub, facilitating global trade and transportation.

The implementation of mega infrastructure projects such as harbours in Trincomalee, Oluwil, Hambantota and the Colombo port expansion will definitely make Sri Lanka, Asia’s new shipping hub.

With this rapid growth comes the need of enhancing the knowledge on shipping law and practice, which is hardly given any importance in any training program.

Building interest and knowledge on the legal and practical aspects in the shipping industry is of vital importance to enhance the capacity and skills of the interested personnel in the Shipping Industry.

The course structure and the syllabus are designed to provide the candidates detailed knowledge of the shipping industry with special reference to the legal and practical aspects.

The main topics include Maritime Law, Carriage of Goods by Sea, Admiralty Law, Port Operations, Marine Insurance and Custom Formalities.

For the convenience of those employed the 3-4 Months course will be conducted on Sundays from 9.00 am to 1.15pm at the ICLP Auditorium at No. 61, Carmel Road, Colombo 3.

The members of the faculty have been drawn up from leading personalities in the field shipping law and practice include Justice P. A. Ratnayake, Judge of the Supreme Court, K. Kanag-Isvaran PC, Dr Harsha Cabral PC, Dr. Parakrama Dissanayake Director Aitken Spence Shipping, Vijith De Costa-Ship Broker, Parakrama Dharmawardena - Professional Banker, Dr Malika Gunasekere - Attorney at Law, Sarath Gunawardena - Attorney at Law, Chulante Jayasooriya - Chartered Transportant, Chandaka Jayasundara - Attorney at Law, Upul Jayatissa - SLPA, Capt. Parakrama De Lannerolle-Master Mariner, S M Niyas-Freight Forwarder and Anoma Ranasinghe.

At the inauguration ICLP Secretary General S S Wijeratne, and the Course Director in his welcome address raised the importance of the need of such a program in the present situation of the country.

He said that it’s time that the professionals get such training to cater to the growing demands in the Shipping Industry with the implementation of new harbours around the island.

Justice P A Ratnayake and other members of the panel highlighted the importance of the knowledge of Law relating to shipping Industry which most professionals lack in the present system.

He further mentioned that the developments in this area specially in admiralty litigation such as ship arrest could create lot of commercial activities which would benefit the hotel industry and so on.

Harin Malwatte speaking of the ICLP-CCC collaboration for the course said CCC was able to involve the shipping related Associations affiliated to the Chamber to ensure that the practical aspects are also included within the course curriculum to bring in a balance between law and practice.

The Chamber of Commerce will utilize the extensive network of members and trade associations to further strengthen the cooperation between the CCC and the ICLP.

K. K. Kanag- Isvaran P.C. insisted that the program should not be confined to lawyers but to professionals from areas such as logistics, freight forwarding and customs.

Further he mentioned that when compared to few decades back, at present we have little admiralty cases in courts. However with the upcoming developments in the shipping industry there is a high possibility of an increase of admiralty litigation.

He also welcomed the new Commercial High Court which has been specially brought into hear admiralty and arbitration cases.

The panel appreciated the diversity of presence of the participants registered so far for the program that included lawyers, freight forwarders, legal officers, bankers, and a journalist.

Gehan Kuruppu addressing on behalf of the Sri Lanka Shippers Council said they welcomed the program as it caters to the needs of the industry.

He also mentioned that there are issues in the industry due to the lack of legal knowledge in this area, where he personally had to obtain the views of experts to resolve matters.

The number of participants will be limited for effectiveness and interested students who wish to equip themselves with a good knowledge of shipping law and practice in the sector that has tremendous future for professionals could contact the ICLP on 2346163/4 or by email ICLP@ eureka.lk

Fitch gives negative outlook to shipping industry

Lower freight rates dent revenues, operating profits:

New Delhi: Rating agency Fitch has said that the Indian shipping industry faces a negative outlook during 2011 on account of lower freight rates and global slump in the sector.

“Fitch Ratings maintains a negative outlook on the Indian shipping industry in 2011, as freight rates will remain depressed because of the demand-supply imbalance caused by a net increase in capacity exceeding demand,” it said in a statement.

The company said that lower freight rates have affected the revenue generation across the shipping companies, in line with the global trend and said major players will be under pressure in 2011.

“Fitch expects revenues and operating profits of the shipping companies (GE Shipping, Varun, Essar, SCIL, Pratibha) to be constrained in 2011, given continued lower freight rates,” it said.

During 2011, lower freight rates are expected across all segments like dry bulkers, tankers and containers, and few Indian shipping companies are expected to undertake aggressive capex plans.

“It is unlikely that macroeconomic factors will be able to bring about a reversal in the outlook from negative to stable given the high industry overcapacity expected in the near future,” Fitch said.

It added that companies with a greater proportion of their ships on long-term charters cannot expect to be completely protected against the prevailing low charter rates, as most contracts have a tenor of one year and the contract rates will be reset at t he prevailing low rates upon renegotiation.

“As at end-2010, the global order book position for new builds as a percentage of existing capacity was around 46 percent for dry bulk segment, around 28 percent for tankers and around 26 percent for container carriers,” Fitch said.

These additional capacities are expected to come on stream during 2011-2013, which is likely to result in over-capacity and further low freight rates.

“Shipping being a worldwide industry, Indian shipping companies have been impacted by global trends.

Revenues and EBIDTA margins of the companies have been negatively affected by lower rates in 2009 and 2010,” it said.

The ratings agency said the debt levels of Indian shipping companies are not likely to come down and those with constrained cash flows are likely to face some refinancing pressure.

PTI

South Korean shipper seeks court receivership

Korea Line, South Korea’s fourth-largest shipping company, said Tuesday it had filed to go into receivership after racking up two years of losses due to the global economic downturn.

The company, established in 1968, said it had been hit by low freight rates caused by falling trade and a worldwide oversupply of vessels.

With assets estimated at 2.7 trillion won ($2.4 billion), Korea Line provides bulk carrier services to steelmaker POSCO, Korea Electric Power and the state-run Korea Gas Corp.

Korea Line’s decision followed failed negotiations with the owners of borrowed vessels on fees.

Local rivals such as Hanjin, Hyundai Merchant Marine and STX Pan Ocean posted operating profits last year, but Korea Line continued to suffer losses.

The Baltic Dry Index, a measure of rates for vessels used to ship iron ore, coal and other commodities, currently hovers below the 1,400-point level, the lowest since February 2009.

Korea Line’s shares fell one percent to 25,200 won earlier in the day before trading was halted.

South Korean stocks closed 0.22 percent higher, with early gains trimmed by Korea Line’s court receivership.

The firm’s troubles will not seriously affect the country’s overall shipping industry, Yonhap news agency said.

The agency quoted an industry source as saying: “Korea Line’s court receivership will provide an opportunity for the local industry to clear uncertainty.”

AFP

Virginia Port Authority chief gets contract extension

Jerry Bridges, executive director of the Virginia Port Authority, will be sticking around for a while.

After four years on the job, he won a six-year contract extension and a 16 percent salary increase from the authority’s Board of Commissioners on Tuesday.

“Four years ago, we said we aspired to be the No. 1 port on the East Coast and we deserve the No. 1 executive director, and we still believe that that’s the case,” John Milliken, chairman of the authority’s board, said.

“We think we are well on course to achieve that goal, largely through Jerry Bridges’ leadership.” Bridges’ base pay will increase to $350,000 from $301,600. He’ll be eligible for another $175,000 in incentive pay, if certain benchmarks are met, up from $90,480.

The contract is subject to the governor’s approval.

Milliken credited Bridges with steering the authority through “the most difficult economic times in my lifetime “ as well as successfully negotiating a 20-year lease of APM Terminals in Portsmouth.

hamptonroads.com

UN study proposes Somalia pirate court

Somali pirates are expanding their attacks and costing the world more than $7 billion a year, according to a UN study released Monday that calls for stepped up security and a pirate court.

The report by former French minister Jack Lang suggests establishing a court under Somali jurisdiction but based in a foreign country in order to address the phenomenon, which has grown in recent years.

It said the international naval force in the Indian Ocean should patrol closer to the pirates’ coastal hideouts and that economic incentives should be offered to Somali youth to dissuade them from joining the buccaneers. Somali pirates have captured nearly 2,000 people and been paid ransoms of up to $9.5 million for seized tankers since 2008. As of December 31, 612 people and 26 ships were still being held, according to UN figures.

“The battle is being won by the pirates,” Lang told reporters.

“They are going further out into the Indian Ocean and with more high-tech equipment to help them.”

The pirates are even taking counterfeit bank note detectors out to sea to check ransoms, the report said. Lang’s report, to be debated by the UN Security Council on Tuesday, said pirate raids are now costing at least $7 billion a year, a sum that includes the military force, lost merchandise, ransom fees and higher insurance. “If the international community does not act with extreme urgency, the pirate economy off the coast of Somalia will continue to prosper until it reaches the point of no return,” the report said.

Dozens of warships from the European Union, the United States, Russia, China, Saudi Arabia, Japan, South Korea and other countries patrol the Indian Ocean shipping lanes off Somalia. Even Iran takes part.

AFP