State-run Shipping Corporation of India Ltd (SCI) has called bids to buy two second hand container ships (one firm and one optional) of up to 20 years old, with a capacity to carry 12,000-18,000 twenty-foot equivalent units (TEUs).
This is the fourth attempt by Shipping Corporation in two years to buy second-hand container ships, a vessel category which is at the centre of the government’s tirade against the huge annual freight paid to foreign shipping lines by India and the need to build Indian tonnage in this segment to check the huge foreign exchange outflow.
India pays a whopping ₹6 lakh crore or $75 billion every year to foreign shipping companies as freight, which is almost equivalent to the size of India’s defence budget. This is because hardly 5 per cent of India’s EXIM cargo is carried on Indian ships, while the remaining 95 per cent is shipped on foreign ships, according to government estimates.
As much as 99 per cent of India’s export-import container trade by volume is carried by foreign shipping lines such as MSC, CMA CGM, Maersk, Hapag Lloyd, Evergreen, Wan Hai, Yang Ming, among others.
This has led the government to consider launching Bharat Container Shipping Line – India’s first attempt at entering the global container shipping business – through a partnership between Shipping Corporation of India and Container Corporation of India Ltd (CONCOR), both so-called ‘navratna’ state-owned firms.
Previous attempts by the national carrier to buy second-hand container ships did not yield results, as fleet owners desisted from offering their ships in a booming freight market, while those who offered quoted high prices.
Shipping Corporation, India’s only mainline container ship operator, currently owns three container ships named ‘SCI Delhi’, ‘SCI Mumbai’ and ‘SCI Chennai’.
In September 2024, Shipping Corporation hired a 9,000 TEU capacity ship (SCI Delhi) for three years and deployed it on the weekly IPAK service it runs in partnership with the Mediterranean Shipping Company S A, the world’s biggest container shipping line by capacity, on the India-Europe sector.
The national carrier recently acquired two second-hand Very Large Gas Carriers (VLGCs) for some $127 million, its first ship purchase in eight years.
The Mumbai-listed fleet owner has also sought offers from local shipyards to build two firm and two optional platform supply vessels, one of which would be designed for running on alternate fuels.
(source: ET Infra)
