India’s sole long-haul liner
operator, Shipping Corporation of India (SCI), is working to make up lost
ground as the nation’s export prospects improve in the face of Asia’s trade
diversification. In
order to strengthen operations that have been severely limited by tonnage
issues and government divestment initiatives, the 63% state-owned carrier hopes
to purchase up to six used containerships, ranging in size from mid-size to
ultra-large. The action was taken after
the national carrier, which had previously collaborated with MSC in this
market, introduced one 9,000-teu ship to the India-Europe traffic. The
market speculated that SCI was considering possibilities to enter the India-US
east coast trade via a VSA agreement with one of the shipping networks, more
likely ONE’s independent WIN service. SCI’s acquisition requirements include
12,000–18,000 teu vessels that are no more than 15 years old.
However,
a lack of capacity required for a weekly rotation has made WIN sailings shaky.
Indeed, because of the Red Sea-related diversions from the Suez Canal, the
availability of tonnage has been a significant industry concern. However, with
the recent peace between Israel and Hamas, canal transits may resume, which
might free up a significant amount of tonnage for charter or purchase.
Due of foreign mainline
carriers’ near-monopoly in the industry, exporters have recently put a great
deal of pressure on Indian trade regulators to address a number of supply chain
issues.
According to trade associations, when supply-demand dynamics change, Indian
exporters are consistently subjected to exorbitant freight costs and
unpredictable vessel space. The
Federation of Indian Export Organisations (FIEO) noted recently that if the
flag-carrier liner could gain a bigger share of the India trades, it would
reduce arm-twisting by foreign shipping lines, particularly of our
micro-small-to-medium enterprises.
It
refocuses on the container shipping market, albeit on a limited scale, seems to
have yielded some profit gains for SCI, according to the latest earnings
report, which shows the carrier ended H1 of fiscal 2024-25 with a 145% increase
in net profit. And income from liner operations soared to some $60m, from $34m
in the previous H1 period. However, much
of SCI’s liner goals could depend on its ability to recreate consortium
partnerships with the major carriers, as standalone operations are typically a
difficult task. And its box trade push comes as ocean rates continue
to move south, with expectations of a sharper collapse with Red Sea shipping
resumption.
SCI
was offered for sale in 2019, as part of New Delhi’s broader divestment
programme intended to raise additional resources and monetise underperforming
public assets. But the process has
been painfully slow because of regulatory and due diligence hiccups, with no
concrete timeline to when SCI would be fully privatised.