KOCHI: The Indian shipping industry, still facing some rough weather, expects to see a real recovery set in only beyond 2011. This, however, does not discount the overall economic recovery being felt across sectors, said S. Hajara, president of the Indian Shipowners’ Association and Chairman and Managing Director of the Shipping Corporation of India, here on Wednesday.
He was speaking to The Hindu on the sidelines of a national seminar on ‘Indian River-Sea Vessels: A Holistic Approach,’ organised by the Kochi branch of the Indian Institute of Marine Engineers.
Mr. Hajara said that economic activities were picking up across the globe and now the question appeared to be whether the recovery would be U-shaped or V-shaped. However, the shipping industry in India is in a predicament with a substantial addition in tonnage — new ship acquisition, in the near future.
This problem will be most acute for container and dry bulk carriers, whereas it will pose less of a challenge for tankers.
During the boom period between 2004 and early 2008, shipping companies had placed huge orders for new vessels.
Although about 20 per cent of the orders may be scrapped or staggered, a lot more vessels are expected to enter the fray in the near future, Mr. Hajara said.
Tankers are expected to better even in this scenario. They have seen better business than dry bulk and container cargo vessels during these difficult times. With the International Maritime Organisation deadline of 2010 for scrapping single-hull vessels, the number of tankers is expected to shrink. Single-hull tankers are considered major threats to coastal environment across the world.
Mr. Hajara said the shipping sector had been the hardest hit by the global economic deceleration. The Baltic Dry Index, an index that reflects the health of the world shipping business, fell to unprecedented levels as container freight rates dropped from $1,400 to $250. The effects of the global economic recession were felt most sharply between May and December last year, he said.
Earlier, speaking at the inauguration of the seminar, Mr. Hajara lamented the fact that Indian coastal shipping had lagged at a tremendous cost to the country.
He said that while big investments went into development of rail and road infrastructure there was not much happening in coastal shipping. Coastal shipping and inland water navigation must draw the attention of the policymakers in the country because water transport holds the future, he added.