SCI and CONCOR are likely to float Bharat Container Shipping Line

“The strategy behind the plan to float a new national container shipping line between two state-owned ‘navratna’ companies is that there is no one in India to compete with the likes of Mediterranean Shipping Company SA, CMA CGM SA, Maersk Line and other global carriers,” said a government official briefed on the development. A ’navratna’ tag allows state-owned firms greater financial freedom to make decisions.

The plan also involves roping in more partners such as India Ports Global Ltd (IPGL) and even state-owned ports such as Jawaharlal Nehru Port Authority–India’s second busiest container gateway–into the special purpose vehicle (SPV), the government official said.

While Shipping Corporation will be tasked with chartering ships from the market to run the new line, CONCOR will provide containers and its extensive fleet of container trains and inland terminal network to facilitate evacuation of containers to and from the ports.

The new line will look at aligning with far east container lines to run container shipping services linking India with China, Europe and the United States.

Separately, CONCOR has hired KPMG Advisory Services Pvt Ltd to carry out an in-depth study and prepare a roadmap ahead of entering the global container shipping sector. The consultant will be tasked with shortlisting potential strategic partners (port operators, shipping alliances or shipbuilders) and suppliers (fuel providers, equipment manufacturers) to support the business. It will have to suggest a comprehensive market entry strategy that includes the best approach for CONCOR in a phased manner covering short term, medium-and long-term goals to establish itself in the international shipping sector (partnerships, acquisitions, or independent operations). It will have to design an operational model for CONCOR’s shipping services, covering areas such as fleet acquisition (new vessels, leasing, or buyand-lease options), terminal infrastructure, route planning, and seamless logistics integration with CONCOR’s existing network as well as identify potential risks associated with entering the shipping line business (fluctuating fuel prices, geopolitical risks, port congestion) and develop strategies to mitigate them…The government’s policy managers reckon that CONCOR’s bid to venture into the global container shipping business on its own “may not click fully because of limitations on marketing the service/business and stitching alliances with foreign partners/companies”.

“So, the thinking is that a bigger entity like this with two strong state-owned partners bringing synergies will have a better chance of running the proposed new line smoothly,” the government official said. “Shipping Corporation has been asked to coordinate and finalise a partnership with CONCOR in six months on the new container line,” the official added…Shipping Corporation, India’s only mainline container ship operator, currently owns just three container ships named ‘SCI Delhi’, ‘SCI Mumbai’ and ‘SCI Chennai’ and one hired ship named ‘Alexandria’.

India’s exporters have always lamented the absence of a national container carrier, forcing them to depend mainly on global lines to move their goods.