SHIPPING

Lanka gains momentum in shipping sector

Sanjeevi Jayasuriya

Port sector development will benefit the country despite strong competition in the region.

Sri Lanka was able to gain momentum whenever the country was ready with capacity and improved facilities. The regional competition has driven the country’s shipping industry to consolidate its position, Strategic Enterprise Management Agency (SEMA) Senior Consultant Rohan Masakorala told Daily News Business.

Colombo port sees accelerated development

“Sri Lanka always has the advantage of building capacity and infrastructure facilities. There had been cargo volume growth at the Colombo port bringing in more business to the country,” he said.

“There was limited development in infrastructure development. This resulted in loss in the competitive edge. However, now with the accelerated port development projects in place the country is in a better position to capitalize”, he said.

The shipping industry stakeholders welcome the moves to develop regional ports and the current developments in different sectors of the shipping industry will have a positive impact on the overall supply chain and logistics development.

The shipping industry is forging ahead with better growth prospects. However, there are short-term obstructions and challenges that the industry should be mindful and take measures to overcome. The country could attract new business from regional countries with proper marketing policies, pricing and improved service levels to match international standards. Colombo could be a mega transshipment hub.

The Hambantota port could attract business in the medium term as it has the space available at the harbour vicinity to handle bulk, industrial, manufacturing and distribution services.

“Although there has been concern on some draft issues which is natural for a mega port project, Sri Lankan engineers are capable of handling any situation and making the port to reach operational level by the end of this year,” he said.“It is the quality of service that brings in business at the end of the day and the country should to be ready to match global shipping industry needs,” Masakorala said.

European container shipping lines raided

European antitrust officials raided several of the world’s largest container shipping companies over possible collusion, the European Commission said in a statement on Tuesday.

Although the statement did not name the companies, several of the shipping lines, including A.P. Moeller-Maersk of Denmark, CMA CGM of France and Hapag-Lloyd of Germany, acknowledged that they were part of the inquiry.

Regulators said they had “reason to believe” that the companies might have breached the European Union’s cartel or monopoly abuse rules. The raid did not mean that the companies were guilty of anticompetitive behavior, the commission said.

The container industry returned to profit last year as shipping volumes and freight rates increased.

Maersk will “fully cooperate with the commission’s employees to investigate the matter thoroughly,” Christian Kledal, the head of Maersk’s legal group, said in an e-mailed statement. The company’s “practices are in compliance with E.U. competition legislation,” he said.

Bloomberg

Stratos to deploy FleetBroadband

Stratos Global, the leading global provider of advanced mobile and fixed-site remote communications solutions, today announced it has been selected by The Shipping Corporation of India Ltd. (SCI) to deploy the Inmarsat FleetBroadband satellite communications service as part of an integrated maritime communications solution that will help the operator increase productivity and control costs.

Stratos was selected by SCI through Stratos Channel Partner Station Satcom (Mumbai; www.stationsatcom.com).

Based in Mumbai, SCI is India’s largest shipping company, with an expansive fleet that operates globally and includes tankers, bulk carriers, liners and supply vessels.

In addition to deployment of FleetBroadband on the entire fleet of 156 ships owned and managed by SCI, the Stratos solution includes: upgrades to AmosConnect 8, Stratos’ sophisticated new maritime communications software; upgrades to crew communications via Stratos’ new AmosConnect CommCenter application; and deployment of Blue Ocean Wireless (BOW) GSM service.

Indo-Lanka ferry service begins in June

Ramani Kangaraarachchi

The proposed ferry service between Sri Lanka and India will be launched next month.

The Sri Lankan and Indian Governments have signed the MoU already.

Sri Lanka Institute of National Tour Guide Lecturers Chairman Joe Livera told Daily News Business that this will enable economy class travellers to shuttle between the two countries with less hassle.

He said the first ferry is scheduled to arrive in Sri Lanka mid next month and thereafter the vessel will touch Colombo three times a week.

The old passenger ferry of the Colombo harbour has been fully refurbished to cater to the anticipated influx of passengers with all the infrastructure facilities. They will be allowed to carry 100 kgs.

Livera said it will be an advantage for economy class travellers coming to South India hoping to visit Sri Lanka and those who are engaged in small-scale business.

The journey takes eight hours by sea and transport will be provided from the jetty. On-line visa services has been arranged.

The cost will be around Rs 8,000.

Livera said most of the tourist arrivals are from India during the recent past and this will boost the movement of tourist travel between the two countries.

Fears grow that US unready for larger Panama canal

The United States could get a major trade boost from the soon-to-be-finished expansion of the Panama Canal, but experts worry poor infrastructure means Uncle Sam will miss the boat.

From 2014 some of the largest ships in the world will again fit through the 80 kilometer (50-mile) Panama Canal. Vessels carrying around 14,000 containers rather than today’s 5,000 will be able to cross the isthmus.

Traffic is expected to double through the inter-oceanic waterway, which already handles around five percent of world trade.

Late boost

For people linked via the canal — most notably consumers in the eastern United States and factory owners in China — that could spell cheaper goods and lower costs.

It could also provide President Barack Obama with a late boost in his effort to double US exports by 2015 and help create jobs.

In Florida alone, the authorities believe upgrading the Port of Miami to handle these larger ships could help create 30,000 jobs.

But during a visit to Washington this week the canal’s administrator Alberto Aleman Zubieta expressed concern that the United States is not ready.

“There is a lot of infrastructure that basically needs to be upgraded,” he said, pointing to problems with dock length, port depth and rail and road links.

Like much of America’s infrastructure, US ports are creaking from years of underinvestment, and many even struggle to handle today’s largest “panamax” ship sizes.

“We don’t have the channel depths that are required to take the post-panamax vessels,” Dave Sanford of the American Association of Port Authorities admitted flatly.

The list of ports that do, he said, “is really short. It’s only one port: Norfolk (Virginia).”

While Baltimore, New York and Miami may also be ready by 2014, they handle a fraction of US trade and are not on the Gulf Coast, which serves consumers and exporters in the vast center of the country.

New projects

Perched on the meandering Mississippi, the Port of New Orleans is one of many facilities that has struggled to match infrastructure to its opportunities.

It is investing $650 million on new canal-linked projects, mostly on container terminals, but CEO Gary LaGrange said the port is still not at fighting weight.

“We’ll be ready, but not as ready as we could be, or should be,” he told AFP.

Blame for the unpreparedness is being spread far and wide: George Washington, the Army Corp of Engineers and Congress are all in the firing line. Since Washington’s time the US army has played at role ensuring waterways are navigable.

Even today the Army Corps of Engineers — with one eye on its own limited budget and resources — must approve and execute many upgrades.

Congress, which is currently focused on cutting US debt, then has to approve funding. That results in significant delays, according to many in the industry.

LaGrange said New Orleans already holds much-sought-after permission to dredge its channel to 50 feet (15 meters) — enough to handle post-panamax ships.

But bureaucracy means the project is on the back burner.

“Right now it is everything we can do to get the Corp of Engineers to maintain it at its current 47 foot depth,” he said.

Similarly the Port of Beaumont, in Texas is waiting for approval of a $1.2 billion project to deepen its channel.

But even if the project is approved this year, it is likely to take 15 years to complete.

“Our system is broken, it’s just broken. It needs to be fixed,” said John Roby, head of the port’s customer services.

Deeper ports

In the meantime shippers are looking to deeper ports beyond the United States; to Freeport in the Bahamas and Kingston in Jamaica.

“Unless we can get more channel capacity they are going to be the primary beneficiaries of an expanded canal,” said Sanford of the American Association of Port Authorities.

Ultimately that may cost US consumers.

“If you can’t take advantage of the economies of scale that the larger vessels offer, said Paul Bingham and economist with Wilbur Smith Associates, “the bottom line is it’s going to cost you more.”

New Orleans, AFP

EU probes Maersk in shipping cartel investigation

Brussels,

European Commission inspectors on Tuesday raided the premises of container liner shipping firms in several EU states as part of a probe into a possible shipping cartel.

As Copenhagen-based Danish shipping giant and oil group A.P. Moeller-Maersk announced a raid at its premises, the European Union executive confirmed inspections “in several member states”.

“The Commission confirms unannounced inspections in the container liner shipping sector” on Tuesday, it said in a statement.

“The Commission officials were accompanied by their counterparts from the relevant national competition authorities,” said the statement which provided no further information on the countries or firms. “The Commission has reason to believe that the companies concerned may have violated the anti-trust rules that prohibit cartels and restrictive business practices and/or abuse of a dominant market position,” it added.

In Copenhagen, Christian Kledal, head of the legal division of A.P. Moeller-Maersk, a world leader in container transport, said in a statement: “We can confirm that, today the European Commission carried out an unannounced inspection in our offices.”

“However, the fact that the Commission carries out such inspections does not mean that the company has engaged in anti-competitive behaviour nor does it prejudge the outcome of the investigation itself,” it stressed.

AFP