Study & analysis of public sector dry bulk market in india

1. 1Thursday, May 29, 2014
CHARTERING WING (“TRANSCHART”)
MINISTRY OF SHIPPING,
GOVT. OF INDIA.
Study and Analysis of Public Sector Dry Bulk Market in India.

2. OUTLINE OF THE PRESENTATION
 Objective of the Report
 Introduction to Transchart
 Policy followed by Transchart
 Ammendments in the Chartering Policy of Transchart
 Data Analysis of Transchart
o Analysis of Ship-Owners
o Analysis of Cargo Size/Quantity
o Analysis of Freight
 Chartering Methodology of Transchart
 Findings and Conclusion
Thursday, May 29, 2014 2

3. OBJECTIVE OF THE REPORT
3Thursday, May 29, 2014
To undertake an Exhaustive Research and Analytical study on
Transchart i.e :
 The No. of Ship’s Fixed/Capesize, Panamax, Supramax Ship’s Fixed by
Transchart every Month/Year in the past 5 years (Mar ’08 to Feb ‘13)
through Transchart.
 The Cargo Quantity/ Cargo Sizes (Capesize/Panamax/Supramax)
Imported/Chartered by Transchart in the past 5 years (Mar ’08 to Feb
‘13) from AUS/US/New Zealand to ECI.
 The Ship-Owners with whom the Fixtures have taken place.

4. OBJECTIVE OF THE REPORT
4Thursday, May 29, 2014
 The Freight rates in the past 5 years (Mar ’08 to Feb ‘13) on
monthly/yearly Bss segregated w.r.t Panamax / Supramax / Capesize
market segments.
 The No. Of Capesize/Panamax/Supramax Fixtures undertaken by
Shipowners in the past 5 years (Mar ’08 to Feb ‘13).
 The trend of Freight rate for cargoes chartered (Capesize / Panamax /
Supramax cargo size) from AUS / US / New Zealand to ECI by Transchart
over a period of past 5 years (Mar ’08 to Feb ‘13) on monthly/yearly Bss.
 The Chartering Policy followed by Transchart from the day of its inception
and the Ammendmends in the Chartering Policy of Transchart over a
period of time.

5. INTRODUCTION TO TRANSCHART
5Thursday, May 29, 2014
 The Chartering Wing in the Ministry of Shipping is a service
organization of Government of India popularly known as
“TRANSCHART” in the shipping world.

6. INTRODUCTION TO TRANSCHART
6Thursday, May 29, 2014
 The Shipping Co-ordination and Chartering organization
(presently known as the Chartering Wing) in the Ministry of
Shipping was set up in March, 1960 with broadly following
functions:-
1. To Act As Clearing House Of Information In Regard To Availability Of
Government Cargoes And Shipping Space In Indian/Foreign Ships With A
View To Make Most Effective Use Of The Available Indian Tonnage.
2. To advise on the best and the most economical shipping arrangements for
shipment of government cargoes and charter foreign flag vessels through
the chartering committee when Indian Ships are not available.
3. Generally to co-ordinate and advise on all policy matters relating to shipping
including shipping terms to be incorporated in import/export contracts as
and when approached by the concerned Deptt./Psus.

7. INTRODUCTION TO TRANSCHART
7Thursday, May 29, 2014
 With Effect From 1st Feb., 1993, Government Decided To
Levy Chartering Service Charge In Respect Of Indian Vessels
At The Rate Of 1% On Freight, Deadfreight And Demurrage
Earned By The Indian Shipowners In Respect Of Fixtures
Concluded Through Chartering Wing (Transchart) For
Shipment Of Bulk Cargoes In Full Ship Load On Tramp Basis.
 An amount of approx. Rs.132.96 Crores as 1% Chartering
Service Charge has already been collected and credited to the
consolidated fund of India by the chartering wing till
September, 2010.

8. POLICY FOLLOWED BY TRANSCHART
8Thursday, May 29, 2014
 As per the existing policy of the Government, all import contracts are to be
finalized on FOB (free on board) / FAS (free alongside ship) Basis in respect of
Government owned and/or controlled cargoes on behalf of Central Government
Departments, State Government departments and Public Sector Undertakings
(PSU) under them and in case of any departure there from, prior permission is
required to be obtained from the Chartering Wing, M/o Shipping on case to case
Basis.
 Shipping arrangements are centralized in the Chartering Wing, Ministry of
Shipping. in so far as Exports on Govt. account are concerned, the Govt. policy of
C&F (cost & freight)/ CIF (cost, insurance & freight) exports by govt.
departments/PSU’s and centralized shipping arrangements through the
Chartering Wing was relaxed in the year 2001 with a view to increase country’s
exports. The above Government policy have also been incorporated in the General
Financial Rules (GFR) of the Government of India.

9. POLICY FOLLOWED BY TRANSCHART
9Thursday, May 29, 2014
 The Policy Of Buying On Fob/Fas Is Aimed At Retaining Control
Over Shipping Arrangements Within The Country, So As To Enable
Us To Maximize Utilization Of Indian Ships At Competitive freight
rates and to save considerable foreign exchange by employing
Indian vessels and also minimize outgo of foreign exchange by
chartering foreign vessels at competitive freight rates. The Indian
Vessels Are Given First Right Of Refusal Without Giving Any Price
Preference. The Policy Is Ideally Suited Not Only In Normal
Situation But Is Very Essential for ensuring arrival of strategically
needed cargoes/materials on time to meet urgent requirements of
the country and also in case of emergency/war like situations.

10. POLICY FOLLOWED BY TRANSCHART
10Thursday, May 29, 2014
 Key Benefits of the Policy:
o Internationally competitive Freight cover for users.
o Maximum utilization of available Indian tonnage by giving first right of refusal
to Indian lines without any price preference.
o Development /Expansion of Indian fleet by providing cargo support.
o Timely coverage of requirement as per shipment schedule.
o Avoid competition among Government Departments/PSUs for similar cargoes
at a particular point of time.
o Safety of Import consignments
o Meet country’s shipping needs during War & Emergency

11. AMMENDMENTS IN THE
CHARTERING POLICY
OF TRANSCHART
11Thursday, May 29, 2014
 CIRCULAR 1 : (29TH SEPT. 1978)
o Government Policy To Maximize Import Contracts On FOB/FAS Terms And Sale
Contracts On C&F/CIF Terms So As To Retain The Control Of Shipment In
Indian Hands And Assist Indian Shipping To The Maximum Extent possible.
o The foreign exchange saving in Utilizing Indian Shipping may be kept in view
while concluding contracts.
• CIRCULAR 2 : (22ND AUG 1985)
o A Monthly Consolidated Statement Indicating Brief Details Of All The Contracts
For The Imports And Exports Finalized During Each Month Should Be
Furnished To This Ministry By 15th Of The Following month on regular bss.
o The procedure to be followed for arranging shipment of Govt.
Owned/controlled cargoes through the Chartering Wing (Transchart).

12. AMMENDMENTS IN THE
CHARTERING POLICY
OF TRANSCHART
12Thursday, May 29, 2014
 CIRCULAR 3 : (05th MAR 1993)
o Levying of “CHARTERING SERVICE CHARGES”
 CIRCULAR 4 : (14TH OCT. 1993)
o Levying of “CHARTERING SERVICE CHARGES” from Indian Private Indentors.
o Decanalisation.
 CIRCULAR 5 : (27th FEB. 1996)
o Review of the Policy Regarding – Till Date

13. AMMENDMENTS IN THE
CHARTERING POLICY
OF TRANSCHART
13Thursday, May 29, 2014
 CIRCULAR 6 : (11th FEB. 1998)
o Liner Trade Terms and Policy.
 CIRCULAR 7 : (15TH NOV. 2001)
o Review of the Policy Regarding – Till Date
o The Policy Of Centralized Shipping Arrangements Through Chartering Wing
has been Relaxed In Case Of Exports. Government Departments/PSUs Are Free
To Finalize Export Contracts on FOB/FAS basis without seeking prior clearance
from Ministry of Shipping (Chartering Wing).

14. AMMENDMENTS IN THE
CHARTERING POLICY
OF TRANSCHART
14Thursday, May 29, 2014
 CIRCULAR 8 : (24th FEB. 2004)
o Liner Trade Terms and Policy.
 CIRCULAR 9 : (06TH MAR. 2014)
• Revised methodology of Chartering vessels for shipment of cargoes on account of
Government departments/PSUs.

15. DATA ANALYSIS OF TRANSCHART
15Thursday, May 29, 2014
 ANALYSIS OF SHIP-OWNERS :
1. Total Fixtures by Transchart from Mar’08 to Feb’13 = 605
 Total Panamax Fixtures = 426
 Total Supramax Fixtures = 159
 Total Capesize Fixtures = 20
2. Total Fixtures by SAIL through Transchart from Mar’08 to Feb’13 = 434
 Total Panamax Fixtures = 320
 Total Supramax Fixtures = 113
 Total Capesize Fixtures = 01

16. DATA ANALYSIS OF TRANSCHART
16Thursday, May 29, 2014
3. Total Fixtures by RINL(VSP) through Transchart from Mar’08 to Feb’13 = 115
 Total Panamax Fixtures = 80
 Total Supramax Fixtures = 16
 Total Capesize Fixtures = 19
4. Total Fixtures by MMTC through Transchart from Mar’08 to Feb’13 = 56
 Total Panamax Fixtures = 26
 Total Supramax Fixtures = 30

17. DATA ANALYSIS OF TRANSCHART
17Thursday, May 29, 2014
 ANALYSIS OF CARGO SIZE/QUANTITY :
5. Total Tonnage imported/chartered by Transchart from Mar’08 to Feb’13
= 42.277 MMT
 Total Panamax tonnage imported/chartered = 31.2960 MMT
 Total Supramax tonnage imported/chartered = 7.9830 MMT
 Total Capesize tonnage imported/chartered = 2.9980 MMT
o Total tonnage imported/chartered by SAIL = 29.5780 MMT
o Total tonnage imported/chartered by RINL(VSP) = 9.5980 MMT
o Total tonnage imported/chartered by MMTC = 3.1010 MMT
 Total tonnage imported/chartered from AUS.= 34.0320 MMT
 Total tonnage imported/chartered from U.S. = 5.9230 MMT
 Total tonnage imported/chartered from N.Z. = 2.3220 MMT

18. DATA ANALYSIS OF TRANSCHART
18Thursday, May 29, 2014
 ANALYSIS OF FREIGHT :
6. Freight rates for AUS/ECI Panamax cargo Biz. has fallen from $50.00 PMT to
$16.50 PMT within a period of last 5 years from Mar’08 to Feb’13.
7. Freight rates for AUS/ECI Supramax cargo Biz. has fallen from $61.25 PMT to
$19.95 PMT within a period of last 5 years from Mar’08 to Feb’13.
8. Freight rates for AUS/ECI Capesize cargo Biz. has increased from $5.00 PMT to
$10.25 PMT within a period of last 5 years from Mar’08 to Feb’13.
9. Freight rates for US/ECI Panamax cargo Biz. has fallen from $73.00 PMT to
$30.25 PMT within a period of last 5 years from Mar’08 to Feb’13.
10. Freight rates for NZ/ECI Panamax cargo Biz. has fallen from $64.50 PMT to
$22.50 PMT within a period of last 5 years from Mar’08 to Feb’13.

19. CHARTERING METHODOLOGY OF TRANSCHART
19Thursday, May 29, 2014
 The Present Working (functioning) Process Of Transchart:
STEP 1: The New Cargo Enquiry Is Mailed From Transchart To All The Empanelled Brokers
Of Transchart In A Short Descriptive Format Followed By Individual Long
Description Of The Rescpective New Enquiry.
STEP 2: The Brokers Reply With A Firm Offer Or (Vessel Name / Vessel Owner Details /
Freight Rate / Demurrage Rate) To Transchart In Order To Fix The Cargo.
STEP 3: Transchart Will Counter Back With Lower Freight And Demurrage levels, if they do
not get their target freight rate and demurrage levels.
STEP 4: Acceptance of the Freight and Demurrage rate, owners fixed through Broker.

20. CHARTERING METHODOLOGY OF TRANSCHART
20Thursday, May 29, 2014
Revised Chartering Methodology of Transchart:
06 March 2014 for Bulk Cargoes

21. FINDINGS AND CONCLUSIONS
21Thursday, May 29, 2014
1. Total Fixtures by Transchart from Mar’08 to Feb’13 = 605
 Total Panamax Fixtures = 426
 Total Supramax Fixtures = 159
 Total Capesize Fixtures = 20
2. Total Fixtures by SAIL through Transchart from Mar’08 to Feb’13 = 434
 Total Panamax Fixtures = 320
 Total Supramax Fixtures = 113
 Total Capesize Fixtures = 01

22. FINDINGS AND CONCLUSIONS
22Thursday, May 29, 2014
3. Total Fixtures by RINL(VSP) through Transchart from Mar’08 to Feb’13 = 115
 Total Panamax Fixtures = 80
 Total Supramax Fixtures = 16
 Total Capesize Fixtures = 19
4. Total Fixtures by MMTC through Transchart from Mar’08 to Feb’13 = 56
 Total Panamax Fixtures = 26
 Total Supramax Fixtures = 30

23. FINDINGS AND CONCLUSIONS
23Thursday, May 29, 2014
5. Total Tonnage imported/chartered by Transchart from Mar’08 to Feb’13
= 42.277 MMT
 Total Panamax tonnage imported/chartered = 31.2960 MMT
 Total Supramax tonnage imported/chartered = 7.9830 MMT
 Total Capesize tonnage imported/chartered = 2.9980 MMT
o Total tonnage imported/chartered by SAIL = 29.5780 MMT
o Total tonnage imported/chartered by RINL(VSP) = 9.5980 MMT
o Total tonnage imported/chartered by MMTC = 3.1010 MMT
 Total tonnage imported/chartered from AUS.= 34.0320 MMT
 Total tonnage imported/chartered from U.S. = 5.9230 MMT
 Total tonnage imported/chartered from N.Z. = 2.3220 MMT

24. FINDINGS AND CONCLUSIONS
24Thursday, May 29, 2014
6. Freight rates for AUS/ECI Panamax cargo Biz. has fallen from $50.00 PMT to
$16.50 PMT within a period of last 5 years from Mar’08 to Feb’13.
7. Freight rates for AUS/ECI Supramax cargo Biz. has fallen from $61.25 PMT to
$19.95 PMT within a period of last 5 years from Mar’08 to Feb’13.
8. Freight rates for AUS/ECI Capesize cargo Biz. has increased from $5.00 PMT to
$10.25 PMT within a period of last 5 years from Mar’08 to Feb’13.
9. Freight rates for US/ECI Panamax cargo Biz. has fallen from $73.00 PMT to
$30.25 PMT within a period of last 5 years from Mar’08 to Feb’13.
10. Freight rates for NZ/ECI Panamax cargo Biz. has fallen from $64.50 PMT to
$22.50 PMT within a period of last 5 years from Mar’08 to Feb’13.