Elektrans Safety and Security Day

We are very pleased to announce our first ever annual “Safety and Security Day” being celebrated throughout the Elektrans Group, ship as shore, on 29th September, 2016.

As prudent asset and risk managers, the Elektrans Group recognizes that there is a clear link between a strong Company HSSEQ performance, a human element focus and a strong sustainable Elektrans business performance.

The annual Elektrans ‘Safety and Security day’ is meant as a time out during which we jointly all hands on deck reflect on, discuss and find new ways on how we can further improve our HSSEQ performance overall as a company, team as individuals. The glue that keeps it all together is a strong company safety culture and mindset which we want to further nourish.

We believe in constant improvement as a key driver to our success, and we must never become complacent on our past results nor take good HSSEQ performance for granted.

The concept of our ‘HSSEQ’ is based on the five key pillars which together constitute the scope of Health, Safety, Security, Environment and Quality. The HSSEQ scope is linked and interdependent to the Elektrans Company and our Human Element factor. Our new Human Element concept logo displays this clearly in a three-in-one logo.

Shipping is perhaps the foremost international of all industries. Shipping enables globalisation as does it yield the most cost efficient and energy efficient transport mode of all.

Global trade and prosperity is directly dependent on maritime shipping.

We are proud to be part of the global shipping industry, as do we constantly strive to take responsibility setting higher safety and Security industry standards in collaboration with our relevant stakeholders.

Yet astonishing the vast majority of the public remain utterly unaware of the importance of a well-functioning shipping industry and how same influences their day to day lives.

Global free trade and cost efficient seaborne logistics is dependent on safe and secure conditions.

This year, the World Maritime Day theme provides an opportunity to put that right.

It gives an opportunity for the shipping community to tell its story: the story of an industry that, in terms of efficiency, safety, environmental impact and its contribution to global trade is unmatched by any other transport sector; the story of shipping – which is, truly, indispensable to the world.

We at Elektrans believe that sustainability of shipping cannot be achieved without strong foundation pillars of safety and security.

Please do all actively participate as embrace the Elektrans Group annual Safety and Security Day and allow us to request all to sspread the message of “Shipping – Indispensable to the world” and drive public awareness of our industry as true maritime ambassadors!

Wish you all safe and secure operations on greener seas!

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Happy Independence Day!

15 August is here and it is time to celebrate this special day which celebrates freedom, liberty and patriotism. This day is celebrated to honor the martyrs who gave their lives for the nation. Since 1947, this day is observed as the most special day for every Indian. Sending you warmest wishes on Independence Day of India as we complete 70 glorious years of freedom. Make this day a memorable one by honoring the sacrifices of our soldiers and freedom fighters.

The three colors in Indian flag inspire us to stay together and in harmony despite all the differences and uniqueness. The seafarers have long in our history have led by example to respect each other despite multi culture that we work with and we all feel very proud of it.

 Independence is not just about our rights, it is also about our duties and responsibilities. Let us make this Independence Day more meaningful by fulfilling our duties as a citizen of India and ensure that as seafarers, we fulfill our part as truly global citizen.

Wishing you a very Happy Independence Day 2016.

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Day of the Sea Farer!

Seafarers are indispensable to the world! The campaign theme chosen by IMO this year is “At Sea for All” There is a clear link with 2016 world Maritime day theme – “Shipping Indispensable to the world”.

The day of the seafarer gives us all a chance to reflect on how much we all rely on seafarers for most of the things we take for granted in our everyday lives. This day was established in 2010, to recognize the unique contribution made by seafarers to international seaborne trade, the world economy and to global society as a whole.

Over one million seafarers operate the global fleet yet billions of people depend on them for the essentials and the luxuries of life!

This day dedicated to seafarers is also focusing on maritime education. An enriched career at sea.

Most people go to work in offices, factories and shops, but it's a different picture for seafarers: an office can be a hundred thousand ton oil tanker or a cargo ship navigating the world’s oceans with beautiful landscapes.

Intending to showcase the multi-faceted, maritime world offers a series of rich and fulfilling career opportunities for young people, both at sea and ashore.

Thus, the aim is to engage seafarers themselves to say they are proud to serve a wider cause than just their own careers. Also, enlightened members of the general public to signal their own appreciation of the importance of sea farers – “Seafarers are At Sea for All”.

We, at Elektrans, have consistently strived to uplift the welfare of our seafarers at sea. On this occasion, we would like to celebrate our seafarers and their significant contributions which have aided the company to embark on unexplored paths of globalization. Their relentless efforts to accomplish the objectives of Elektrans have culminated in the company achieving its dreams.

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SEAFARERS - Providing a yeoman’s service

The shipping industry handles over 90% of world trade. This has led to a high growth in demand for the world fleet which currently stands at over 85,000 ships of nearly 1.2billion gross tonnage. Seafarers play the most important role in the manning and operations of the world fleet. They brave the seas, encounter the harsh elements, rough weather, long durations away from home and family, put in long hours of hard work and thus provide a yeoman’s service.

A key highlight of the STCW Conference 2010 was the IMO designated, “Year of the Seafarer,” which aimed to provide the maritime community with an opportunity to pay tribute to seafarers from all over the world for their unique contribution to society and in recognition of the facilitation of global trade in a hazardous environment.

The conference further designated 25th June as the “Day of the Seafarer” Thereafter, this day is being observed every year. This year whilst observing the day of the seafarer, IMO has also encouraged young people to consider a career at sea as a viable, attractive and enticing career option. A central plank of the campaign message was that seafaring offers unique opportunities to navigate the seas of the globe and encounter the wonders of the ocean, as well as the opportunity to experience a world of real adventure and interact with people from all over the world.

IMO Secretary General Sekimizu called on active and past seafarers to inspire the next generation by sharing their experience on social media. He encouraged officials who are already engaged in this vital professional world to reach out to the new generation; share their life and work experiences; inspire and encourage them to explore for themselves a career at sea or elsewhere in the maritime industries.

 Seafaring opens the door to decent work and unique and enriching experiences. Moreover, in running today’s modern, high-tech vessels, seafarers acquire skills and technical expertise that make them very well qualified for work in many shore based industries once their sea-going days are over.

 The BIMCO/ISF Manpower Update provides the most comprehensive assessment of the global supply and demand for seafarers that are currently available. In accordance with their study of 2010, they have estimated a total global supply of 1371 thousand seafarers (624,000 officers and 747,000 ratings).

The 2010 Manpower Update suggests that while the supply and demand for ratings are more or less balanced there are still some shortages for officers, particularly for certain grades and for ship types such as tankers and offshore support vessels. We are now waiting for the 2015 Manpower Update.

The current situation in India is that there is enough encouragement and a large number of educated youth are eager to take up seafaring as a career. Unfortunately, although there are enough training berths in pre-sea institutions, but not enough berths are available for on-board training thus leading to a mismatch between training and placements. We can draw a parallel with medical professionals as a candidate training to become a doctor needs to complete an internship program in a hospital in order to attain an MBBS degree. Similarly, a cadet training to become a sea going officer has to complete the requisite on board training prior to certificate of competency course and examination.

Further, there is a surplus of ratings and junior officers, and a shortage of senior officers. Thus, some mechanism needs to be developed to balance the situation.

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Make in India- A fine example from the Indian Automobile Industry

The Leading global automobile manufacturers; Suzuki- Maruti, Hyundai, Honda, Toyota, Volkswagen, Ford, General Motors, Nissan etc. have set up production facilities in India and are catering to both the Indian market and the export markets. Cars are now being exported to diverse markets in Africa, South- East Asia and Europe.

 Leading Indian manufacturers; Tata Motors, Mahindra & Mahindra etc. are similarly catering to both the Indian market and the export markets.

 The Indian automobile industry is thus amongst the top manufacturers in the world catering to the growing Indian and export markets.

Automobile exports (passenger vehicles) from India have grown from 4.5lakhs in 2009/2010 to 6.2lakhs in 2014/2015 an average annual growth rate of about 8% and the trend is continuing.

 Transportation of automobiles for the export market is done by Pure Car and Truck Carriers (PCTC’s) of over 5000 cars (CEUs) capacity. This is the most economic and efficient way for sea transportation of automobiles.

 Large PCTC’s of various leading international shipping lines, such as, Hoegh Autoliners, NYK, MOL, Wallenius Wilhelmsen, etc. make regular calls at Indian ports to load and transport automobiles by Ro-Ro concept.

It would be observed from the foregoing that the manufacture of automobiles in India by leading international and Indian manufacturers is one of the best examples of the “Make in India”, concept. Taking a lead from here, perhaps it can be replicated in a number of other industries too.

Then, what about the shipbuilding industry, will it be possible? Perhaps yes, at a later date, when we are able to overcome the constraints and numerous problems. The demand for RoRo PCTC’s is likely to increase with the increase in exports and this would provide a good opportunity to Indian shipping lines to consider diversifying and acquiring a few PCTC’s.

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Entry into force of BWMC – Fast Approaching

Since the introduction of steel-hulled vessels around 135 years ago, water has been used as ballast to stabilize vessels at sea. Ballast water is pumped in to maintain safe operating conditions throughout a voyage. This practice reduces stress on the hull, provides transverse stability, improves propulsion and maneuverability, and compensates for weight changes in various cargo load levels and due to fuel and water consumption.

While ballast water is essential for safe and efficient modern shipping operations, it may pose serious ecological, economic and health problems due to the multitude of marine species carried in ships’ ballast water. These include bacteria, microbes, small invertebrates, eggs, cysts and larvae of various species. The transferred species may survive to establish a reproductive population in the host environment, becoming invasive, out-competing native species and multiplying into pest proportions.

Scientists first recognized the signs of an alien species introduction after a mass occurrence of the Asian phytoplankton algae Odontella in the North Sea in 1903. In the late 1980’s, Canada and Australia were amongst countries experiencing particular problems with invasive species, and they brought their concerns to the attention of IMO’s Marine Environment Protection Committee (MEPC)

The problem of invasive species in ships’ ballast water is largely due to the expanded trade and traffic volume over the last few decades and, since the volumes of seaborne trade continue to increase, the problem may not yet have reached its peak. The effects in many areas of the world have been devastating. Quantitative data show that the rate of bio-invasions is continuing to increase at an alarming rate and new areas are being invaded all the time.

The spread of invasive species is now recognized as one of the greatest threats to the ecological and the economic wellbeing of the planet. These species are causing enormous damage to biodiversity and the valuable natural riches of the earth upon which we depend. Direct and indirect health effects are becoming increasingly serious and the damage to the environment is often irreversible.

In order to control the spread of invasive aquatic species through ship’s ballast water, IMO through international co-operation adopted the International Convention for the Control and Management of Ship’s Ballast Water and Sediments (BWMC) in 2004.

The Convention will require all ships to implement a ballast water management plan, carry a ballast water record book, carry out ballast water management procedures to a given standard, and hold a valid International Ballast Water Management Certificate.

During the Convention development process, considerable efforts were made to formulate appropriate standards for ballast water management. They are the ballast water exchange (BWE) standard and the ballast water performance standard. Ships performing ballast water exchange shall do so with an efficiency of 95 per cent volumetric exchange of ballast water and ships using a ballast water management system (BWMS) shall meet a performance standard based on agreed numbers of organisms per unit of volume.

The Convention will enter into force after ratification by 30 States, representing 35 per cent of world merchant shipping tonnage.

In the interim period, whilst the Convention is yet to enter into force, ships are carrying out BWE in the open sea (> 200nm from nearest land and water depth > 200m) to meet Port State Control requirements.

Till date, 49 contracting States with 34.82% of the world’s gross tonnage have ratified the Convention, so we are very close to meeting the entry into force criteria. It is expected that the criteria would be met soon and the Convention would enter into force probably before the end of 2016.

It would be one of the most expensive Conventions to implement as retrofit of a Ballast Water Treatment System would cost US $ 1 to 5 million per ship depending on size, capacity and layout.

Presently, there is still a dilemma with regard to approvals as only MEPC approved systems would be acceptable and further for trading in US waters, US Coast Guard approval would also be required. A few companies have installed retrofit systems on some of their ships, for early compliance. Majority would comply close to the due date for a ship which would be the next renewal date of the individual ship’s pollution prevention certificate. This would effectively space out compliance over the next five years.

Although in the prevailing very low freight market situation it is going to be difficult for the shipping industry to implement BWMC due to high cost, but to protect the marine environment it would need to be done.

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IMDG CODE

The development of the IMDG Code dates back to the 1960 Safety of Life at Sea Conference, which recommended that Governments should adopt a uniform international code for the transport of dangerous goods by sea to supplement the regulations contained in the 1960 International Convention for the Safety of Life at Sea (SOLAS).

A resolution adopted by the 1960 Conference said the proposed code should cover such matters as packing, container traffic and stowage, with particular reference to the segregation of incompatible substances.

A working group of IMO's Maritime Safety Committee began preparing the Code in 1961, in close co operation with the United Nations Committee of Experts on the Transport of Dangerous Goods, which in a 1956 report had established minimum requirements for the transport of dangerous goods by all modes of transport.

Since its adoption by the fourth IMO Assembly in 1965, the IMDG Code has undergone many changes, both in appearance and content to keep pace with the ever changing needs of industry. Amendments which do not affect the principles upon which the Code is based may be adopted by the MSC, allowing IMO to respond to transport developments in reasonable time.

Amendments to the IMDG Code originate from two sources; proposals submitted directly to IMO by Member States and amendments required to take account of changes to the United Nations Recommendations on the Transport of Dangerous Goods which sets the basic requirements for all the transport modes.

Amendments to the provisions of the United Nations Recommendations are made on a two yearly cycle and approximately two years after their adoption, they are adopted by the authorities responsible for regulating the various transport modes. In that way a basic set of requirements applicable to all modes of transport is established and implemented, thus ensuring that difficulties are not encountered at inter modal interfaces.

For the purposes of this Code, dangerous goods are classified in different classes, to subdivide a number of these classes and to define and describe characteristics and properties of the substances, material and articles which would fall within each class or division. General provisions for each class or division are given. Individual dangerous goods are listed in the Dangerous Goods List, with the class and any specific requirements.

The shippers have to adhere to the packing and labeling requirement as required by the code. Failure to do so will result in cargo not being accepted and or they being penalized. Only class 7 cargo packaging type is not given in the IMDG code as owing to the hazard nature of this cargo the packaging requirements are covered by the IAEA. Thus, the IMDG code ensures safe transportation of dangerous cargo.

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Confidence levels in Shipping Industry at a low

The average confidence level expressed by respondents in the markets according to the latest Shipping Confidence Survey from international accountant and shipping adviser Moore Stephens in which they operate was 5.0 on a scale of 1 (low) to 10 (high). This compares to the 5.6 recorded in November 2015, and is the lowest rating in the life of the survey, which was launched in May 2008 with a confidence rating of 6.8.

All main categories of respondent with the exception of brokers (up from 4.6 to 5.1) recorded a fall in confidence this time, most notably charterers (down from 5.5 to 3.9), which is the lowest confidence rating by any category of respondent in the history of the survey. Confidence on the part of owners and managers was also down, from 5.7 to 4.8 and from 5.8 to 5.5 respectively.

Geographically, confidence was down in all major areas covered by the survey – in Asia from 6.0 to 4.4, in Europe from 5.4 to 5.1, and in North America from 5.7 to 4.7.

A number of respondents continued to express concern about the level of over tonnaging, with one pointing out, “New building deliveries for 2016 will increase the total fleet by 10.5%, 7% of the current fleet is older than 20 years, and cargo volumes in 2015 were just 4.5% higher than in 2014, so the expected available fleet per metric ton of dry cargo available will be higher at the end of 2016 than it is now. As a result, there is no chance of freight levels improving.” Another respondent said, “As long as shipowners operate based on hope rather than on solid economics, there will always be booms and busts.”

Particular concern was expressed about the state of the dry bulk market wherein no dry bulk business makes any remote sense. There are too many players, too many operators, and too many vessels chasing too few cargoes. Most fixtures are concluded merely to keep the banks happy in the belief that some tiny amount of cashflow is coming in. It is noted, that dry bulk is simply at the bottom level of business.

The need for accelerated demolition states that scrapping activity is far from sufficient to compensate for incoming new tonnage. Low scrapping prices provide little motivation for owners to demolish ships, although increased scrapping may help achieve equilibrium in the dry bulk sector sooner rather than later.

Falling oil prices were also a recurring topic in responses to the survey. Global bulk oil movements will be the key to conditions in the tanker market over the next 12 months. With storage facilities almost full to capacity, there will be nowhere to stock additional supplies unless global economy picks up and oil production is regulated. Meanwhile there is some solace in soft oil prices, as the prices are yet low. The wet markets stand a better chance of remaining profitable on the back of weak crude oil prices. Elsewhere, however, there was concern about the effect of falling oil prices on the offshore maritime sector, There are companies in the offshore shipping market which are under pressure and in potential danger of being shut down.”

Demand trends, competition and tonnage supply featured are the top three factors cited and are likely to influence performance most significantly over the coming 12 months. Demand trends, which were up by two percentage points to 26%, remained in first place, with competition (unchanged at 21%) in second place. Tonnage supply, at 15%, occupied third place, one percentage point ahead of finance costs. Operating costs, up by six percentage points to 12%, featured in fifth place, ahead of fuel costs and regulation at 4%, the latter representing a five percentage-point drop on the figures for November 2015.

Overcapacity in any industry will inevitably lead to price-cutting and eventually to financial difficulties for the weakest, the least well-prepared, or sometimes simply the unluckiest. Shipping has had its share of bankruptcies, foreclosures and restructurings during the past few years, and it is likely that we will see more over the coming months, with negotiations doubtless enlivened by the fact that shipping’s purse-strings today are often controlled by an intriguing mix of private equity and traditional shipping finance.

The simple answer to overcapacity is to reduce the numbers, disposing of excess units is more difficult in shipping than in most other industries, particularly when there are record numbers of new vessels just waiting to be delivered. Increased ship recycling is one obvious answer, although current low scrap prices mean that fewer numbers of most tonnage types are being recycled.

Therefore, in a climate of continuing overcapacity, increased regulation, ongoing political unrest and economic instability, the shipping industry will continue to lower growth in the International Trade given the continued low growth of GDP in the world as compared to the supply remaining high due to existing over capacity coupled with substantial new deliveries of new tonnage and inadequate scrapping of older tonnage.

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THE INDIAN LOGISTICS SECTOR - 2016

India’s logistics sector is poised for accelerated growth, led by GDP revival, ramp up in transport infrastructure, e-commerce penetration, impending GST implementation, and other initiatives like ‘Make in India.’

This offers opportunities across the spectrum for companies in transportation, storage, distribution, and allied services. Empirical evidence suggests the Indian logistics industry grows at 1.5-2 times the GDP growth. Infrastructural bottlenecks that have stifled sector’s growth and promoted inefficiency are also being addressed by the government.

Building of dedicated rail freight corridors will promote efficient haulage of containerised cargo by rail. Also, setting up of various industrial corridors along the dedicated freight route will metamorphose the warehousing business– from small warehouses spread across the country to large, global-size warehouses concentrated in a few hubs.

The proposed new goods and services tax (GST) regime and e-commerce will alter the landscape in warehousing, supply chain management and third party logistics business. GST implementation will be a game-changing event for businesses and particularly for organized logistics players.

It is stated that the logistics requirement for e-commerce will grow as exponentially as e-commerce.

Indian logistics sector is estimated to have grown at a healthy 15% in the last five years. However, growth in sub-sectors varies, with the lowest being in basic trucking operations and highest in supply chain and e-tailing logistics. Some studies estimate the share of India’s logistics spend in GDP at 13 - 15% (versus 7-8% in developed countries), implying overall size of $180-220 bn (direct costs +wastages from inefficiencies). A comparison with other countries shows inefficiencies are high in the Indian logistics sector.

With the present government thrust and focus on movement of goods by sea, making use of the vast coastline as well as rivers it is envisaged that in time to come the movement of goods by road will be a lot less as compared to today.

Further, considering the government’s plans to link railway network directly to ports, this in turn will increase railway’s shares in logistic movement.

The focused efforts for increasing the ease of doing business in the country will definitely have long term positive impact. The reduction in the cost of doing business is as important as the simplification of processes. Foreign consumption is beyond our control, however domestic consumption substantially depends on the growth of the Indian economy while attention is always on national policies and partially on state governmental actions, all the cutting edge levels of governance, including the local self-government units like Municipalities and Panchayats, have a role in making India business friendly.

Infrastructural bottlenecks across modes (rail, road, waterways) have stifled the sector’s growth. Capacity constraints and inefficiencies can be noted from the high transit time in rail as key train routes operate at >110% utilisation, thus leading to an average speed of 25 km per hour. The road sector is fraught with inadequate and low-quality highway availability, thereby limiting the trucks’ size and impacting economies of operation. Despite being an economical mode of transport, railways have lost market share in freight movement to roads in the last few decades due to capacity constraints. Water transport is 6 - 7% although comparatively low it’s the most convenient and environmental friendly mode compared to the others. Compared to other countries, India’s rail share in goods transport is 35%, which has come down from 60% in 1980s and 48% in 1990s.

Also, low penetration of new technology in the supply chain process is resulting in damage of goods. India has the least warehouse capacity with modern facilities, and given the fragmented industry state (large share with unorganised players), investment in IT infrastructure is almost absent at required scale.

Another key constraint is administrative delays. Despite being a relatively low-cost country, logistics cost in India is higher due to administrative delays and bureaucratic led by paper work—leading to huge inventory investments and wastage—and a complex tax structure.

The maritime and logistics sectors are totally dependent on the rest of the economy, especially the manufacturing and the infrastructure sectors. Of course, the Indian economy does not function in isolation and the economic indicators have been unimpressive throughout the world, even in China. But there are several possible governmental interventions which could make India a better place for business, and a better place to live in.

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MAIB 2014 Report - No Crew Deaths on UK Vessels - An excellent achievement

The Marine Accident Investigation Branch (MAIB) U.K. established in 1989 following the Herald of Free Enterprise disaster, is an independent unit within the Department for Transport in U.K. The MAIB investigates marine accidents involving UK vessels worldwide and all vessels in UK territorial waters. Their job is to help prevent further avoidable accidents from occurring and not to establish blame or liability.

Empowered by the Merchant Shipping Act 1995, it is a government agency headed by the Chief Inspector of Marine Accidents. The MAIB is the marine equivalent of the much older Air Accidents Investigation Branch and the more recent Rail Accident Investigation Branch, all of them report directly to the Secretary of State for Transport.

Investigations are thorough but are strictly limited to establishing cause, promoting awareness of risks and preventing recurrence. Reporting of accidents to the MAIB is mandatory for all commercially operated vessels in UK waters and for all UK registered vessels worldwide. The MAIB receives between 1000 and 2000 incident reports annually of which 30 to 50 become full investigations with published reports. The choice of which accidents are investigated is made on the basis of the scope of the safety lessons which may be learned as a result of the investigation. The reports do not apportion blame and do not establish liability.

In 2014 the Marine Accident Investigation Branch received 1270 reports of accidents of all types and severity which led to 31 separate investigations being launched.

Recently, MAIB has published their annual report for 2014. The highlights of the report are given below:

• For the fifth year in succession no UK merchant vessel of > 100gt was lost;

• The overall accident rate for UK merchant vessels > 100gt was unchanged from 2013 at 88 per 1000 vessels;

• There were no crew deaths on UK merchant vessels >100gt in 2014 and a review of available records from the last 50 years shows that this has never happened before;

• The average number of deaths over the last 10 years is 4 per year

Several maritime countries, including India, have a marine accident investigation branch either as an independent unit or within their maritime administration and carry out marine accident investigations in a similar way.

Major IMO Conventions (SOLAS, MARPOL, LOAD LINES, STCW, etc.), ISM Code/Safety Management System, National and Classification requirements aim towards minimizing loss of life, personal injury, loss and damage to property (ship and cargo), accidents, pollution incidents and hazardous occurrences, and thereby build-up a good safety culture throughout the world fleet. The shipping industry is continually striving for achieving zero accidents and in spite of good efforts, this may not be possible as something, sometimes does tend go wrong.

The MAIB (UK) 2014 report states that there were no crew deaths on UK merchant vessels > 100gt, and that this has never happened before for the last 50 years. This indeed is laudable. Further, that for the fifth year in succession no UK merchant vessels of > 100gt were lost, is also a very good record. 

The afore-said highlights of the MAIB (UK) 2014 report is good encouragement for the rest of the world’s shipping industry to strive even harder towards the goal of zero accidents.

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Accidents at sea due to misuse of alcohol

Misuse of alcohol by some seafarers has been an age old problem. Long voyages away from home, family and friends, monotony, lack of social interaction, isolation, etc. makes some seafarers get addicted thus dependent upon the soothing effects of alcohol. A seafarer under the influence of alcohol is a hazard for the safety of ship and personnel.

Incorrect use of alcohol directly affects the fitness and ability of a seafarer to perform watch keeping and other duties making accidents much more likely.

In recent years this problem has been addressed by putting stringent restrictions on the consumption of alcohol through STCW, ILO, OCIMF, ISF, INTERTANKO, Flag and Port States, ISM/SMS shipboard manuals, etc.

Accordingly, some companies have introduced a zero alcohol policy, whereas other allow restricted intake (0.04% blood alcohol level, about 2 units) during periods more than 4 hours before reporting for watch or duty.

The afore-said alcohol policy has had the desired effects and accidents due to misuse of alcohol have reduced, but still there are a few accidents taking place probably due to ineffective implementation on such ships.

In a recent case investigated by MAIB(UK), in the early hours of 18 February last year the Scotish village of Kilchoan was disturbed by the sound of metal grinding against rocks, a vessel sailing from Belfast to Skogn, Norway had missed a course change at a waypoint and crashed into the rugged coastline near Mingary Pier, having narrowly missed another outcrop of rocks.

Half an hour later the master advised Stornoway Coastguard that there was no damage, no pollution and there were no injuries, however when the Tobermory lifeboat reached the stricken vessel, it was clear that the situation was more serious. The vessel’s hull had been breached, an engine room sludge tank was filling with water and the steering gear was damaged. As the ship came off the rocks, 25 tonnes of marine gas oil (MGO) spilled into the Sound of Mull.

MAIB found that the root cause was alcohol - specifically, the half litre of rum that the chief officer had consumed in his cabin, prior to going on watch. This led to missing an important course alteration at a way point and grounding thereafter.

The company has taken corrective and preventive measures in their fleet to enhance compliance with SMS with particular emphasis on control of alcohol consumption and bridge resource management.

The above accident is a good lesson to be learnt by all companies to once again review the implementation and effectiveness of their SMS alcohol policy in the interest of safety on board and to further enhance safety culture.

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‘CABOTAGE’

The Indian Cabotage rules are contained in Sections 406 and407 under Part XIV of the Merchant Shipping Act 1958 (The Act). In summary, pursuant to these Sections only Indian flagged vessels or vessels chartered by an Indian citizen or company, operating under a license granted by the Director General of Shipping (Director General), can carry cargo from one Indian port to another Indian port. Foreign flagged vessels are permitted to carry cargo only if Indian flagged vessels are not available after attaining due permission from DG Shipping. 

Marine transport in India has evolved considerably over the past few years to become an integral component of India's economic development. Fuelled by the strong growth of its domestic industry, India is rapidly cementing a position as a key player in the maritime sector globally. 

The country's focus on strengthening the domestic maritime industry, and its role in supporting broader economic goals, is highlighted in the National Maritime Agenda (the Agenda) developed by the Indian Ministry of Shipping and Transport. Among other things, a key objective of the Agenda is for India's total foreign trade to account for 5% of global market share by the year 2020. This target is in line with the present Government's wider policy of economic reforms, including the recently released Foreign Trade Policy that, along with a range of reforms of export policy and procedure, includes a commitment to nearly exports by 2020 to $900 billion. 

Traditionally the movement of goods by sea in India has reflected relatively higher total annual imports compared to total exports. India's Total Import from April-2014 to March-2015 was approximately 450 Billion USD 

Industry bodies such as the Indian National Shipowner’s Association (INSA) have suggested that the absence of a regime that supports absolute Cabotage in India is a major reason for low investment in coastal shipping. Consequently INSA has opposed any relaxation of current Cabotage law by arguing that this move would potentially undermine the position of the domestic shipping industry in coastal trading. 

However, recent economic reforms have triggered a high rate of economic growth in India in which has, in turn, significantly increased demand for the transportation of goods. As demand is mostly serviced by rail and/or road transport systems, shipping transport services merely 8 - 9% of total current demand. 

In coastal shipping, the passage of goods in both directions is not equal. This leads to imbalance; the cargo movement pattern is dependent on the production and availability of goods, demand and the distance separating production centres from the points of destination of those good. 

In its opposition to any proposed relaxation of Cabotage in India, it is noted that there is no level playing field between the foreign lines and Indian shipping lines which are subject to tax, duty on bunker charges, domestic customs issues, etc.

It appears that the solution to this quandary is likely to come from seeking a balanced solution; the Indian government reportedly plans to seek a relaxation of the Cabotage rules whilst avoiding undue hardship to the Indian shipping sector, possibly by providing tax, duty and cargo incentives to them. In the context of India's wide-spread economic reforms, such a move could form the next step in sustainably expanding India's role in coastal shipping considering the government’s thrust in enhancing this sector.

It is apparent that coastal shipping will be integral to the growth of the Indian economy generally and also specifically towards the achievement of the nation's ambitious trade targets.

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‘The Rough Road of Steel Scrap Prices’

At the beginning of 2016 the scrap steel and iron prices have reached multi year lows, and some markets are even lower than back in 2008 when the overall markets collapsed. Since then the prices have dropped even lower!! In the past year and half the overall global demand for metals has dipped way down below what we have seen not only in copper prices, but steel, aluminum, stainless, and almost all other metal prices decrease significantly. The market is in a large flux right now and because of the world supply and demand for both the finished metal and its raw materials, there is not a lot of room for people to see the prices going up anytime soon. 

Scrap metal prices are a function of the price of finished steel. In 2015 US scrap export volumes dropped sharply by 15% mainly due to markets in Turkey, Middle East and Asia opting to purchase (cheap) billets from China instead of scrap. This has resulted in global scrap prices remaining under pressure which has continued during the first two months of this year albeit with the billet-scrap price advantage reducing. The recent gains in iron ore prices may produce modest gains in scrap prices. 

One good indicator of the market is the price of oil. The sharp drop of the oil prices has affected the economy of many countries as well as the demand of many industries. Hence we will be hard pressed to see the market improve in the near term though the Brent crude has recently shown some resilience and in fact a small bounce. Until we have situations like oil prices are leveling out, China cutting back on their steel manufacturing capacities, general improvement in world trade, etc. we may not see firmer prices. The US Presidental election has also to be factored in. 

Hence 2016 is expected to be a tough year for the steel, scrap steel and commodity markets in general and not many pundits are betting on a sharp turn around.

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Revival of INSTC – ‘An Opportunity for India in Central Asia’

The International North South Transport Corridor (INSTC) is an ancient trade route that connected South Asia with North Europe for centuries. This route was used by European, Indian, Russian and other foreign traders. Thousands of Indian traders have used this route to reach out to central Asian markets from 15th to early 19th centuries.

 The modern day International North South Transport Corridor (INSTC) is a multi-modal trade transport network that includes rail, road, and water transport from Mumbai in India via Bandar Abbas in Iran to Moscow and in St. Petersburg in Russia. It addresses the need for greater economic and energy cooperation between South, Central, West Asian and Northern European region.

The INSTC envisages movement of goods from Mumbai (India) to Bandar Abbas (Iran) by sea, from Bandar Abbas to Bandar-e-Anzali (an Iranian port on the Caspian Sea) by road, and then from Bandar-e-Anzali to Astrakhan (a Caspian port in the Russian Federation) by ship across the Caspian Sea, and thereafter from Astrakhan to other regions of the Russian Federation and further into Europe by Russian railways.

The successful activation of the corridor will help connect India to Russia within 16-21 days at competitive freight rates leading to development of trade on the INSTC.

The INSTC was initiated by Russia, India and Iran in September 2000 to establish transportation networks among the member states and to enhance connectivity with the land locked region of Central Asia. The agreement was ratified by all the three signatory states and has been in force since May 16, 2002.

Later on, the INSTC was expanded to include eleven new members, namely: Republic of Azerbaijan, Republic of Armenia, Republic of Kazakhstan, Kyrgyz Republic, Republic of Tajikistan, Republic of Turkey, Republic of Ukraine, Republic of Belarus, Oman, Syria, Bulgaria.

The Foreign Trade Policy of India, 2015-20, has highlighted the importance of the International North-South Transport Corridor (INSTC) in expanding India’s trade and investment links with Central Asia.

The strategic significance of INSTC for India is immense:

 a. The INSTC has particular economic and strategic relevance to India given the increasing regional ambitions of China through its One Belt, One Road Initiative. The proposed INSTC trade corridor could help India secure its interests in Central Asia and beyond.

b. India is expected to negotiate a comprehensive economic partnership agreement with the Eurasian Economic Union, which consists of Belarus, Kazakhstan, Kyrgyzstan and Russia, with Armenia likely to join. This agreement would help India expand its economic, trade and investment opportunities in this region.

c. At present, India has to depend on the routes through China and Europe to reach out to Eurasia, which are long, expensive and time consuming. Therefore, we are in need for a route which would be relatively shorter, cheaper and, more importantly, safer and well secured. It is estimated that the INSTC can reduce time and cost of container delivery by 30-40 per cent.

d. From India’s point of view, this corridor would help India to reach out to Central Asia and Russia, and enable transportation of goods at cheaper cost to the European markets. In addition, Indian exports could potentially get a competitive advantage due to lower cost and less delivery time.

At present, India, with the help of Russia and Azerbaijan, has successfully tested the main routes of the North South International Transport Corridor in order to assess its cost-effectiveness and the possibility of Indian companies using the route for trade with former Soviet republics.

A lot of work still has to be done to revive this ancient trade route in a modern way with multi-modal transport. We are looking forward to participate in this alternative trade route by providing a transport logistics service for the benefit of International and Indian trade to/from central Asia and North Europe.

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‘ROLE of CFS in INDIA – Import & Export’

All Cargo imported into the country or exported out of the country by sea, air, land or rail routes are governed by the provisions of the Customs Act, 1962 and other laws of the country related to the country. Customs ensures that the import and export of goods are in compliance with the Customs Act and other laws in force. Accordingly, customs procedures are intended to provide definite, predictable methods by which the goods can enter the country and get cleared on payment of applicable import duties, fulfilling the requirements of the law of the land.

To regulate and to exercise effective control over import and export activities, goods are allowed for import/export at notified places under section 7 of the Customs Act, 1962. Custodians are appointed under section 45 of the Customs Act, 1962 for safe storage of goods till they are cleared for home consumption or warehoused. Clearance of goods involves classification, assessment, examination and payment of Customs duty on imported cargo on the basis of Bill of Entry presented by the importer or his authorized agent. The Central Board of Excise and Customs (CBEC) have prescribed the procedures through notifications, rules, regulations and circulars which are implemented by field formations. These are updated and modified according to the need, demands of trade and to improve the efficiency of the system.

CFS is a place where containers are stuffed, de-stuffed and segregation of export/import cargo takes place. With the growing volume of international trade, the need for expeditious clearance of goods at the port within the minimum possible time has been gaining importance. This is more so when the ports are facing congestion at their premises. Further, for optimal utilization of existing infrastructure (space, equipment), the goods that land at ports need to be evacuated straight away without any loss of time. Accordingly the concept of Container Freight Stations, (CFS) has grown in importance along with the development and growth of ports.

A CFS is an extended arm of Port/ ICD where import/ export goods are kept till completion of their examination and clearance. The imported goods can be immediately shifted from the port to CFS which also helps in the reduction of port congestion. All the activities related to clearance of goods for home consumption, warehousing, temporary admissions, re-export, temporary storage for onward transit and outright export and transshipments takes place from such stations. 

Therefore, clearance of goods from CFS is an important point of consideration for trade in respect of export/ import Cargo as it is the final Customs contact point.

The goods received at ports are brought to CFS and stacked for customs and examination for deliverance to consignee. In respect of import consignment, the Steamer Agents/liners/ Importers desiring to take the consignment to CFS, file Import General Manifests in the port. After obtaining the permission from the AC/DC, the Container moves to CFS under Customs escort or under bond and bank guarantee. The CFS allow de-stuffing of the goods. The CHA / importer files the Bill of Entry at Customs House and then Customs formalities of assessment, examination and payment of duty are completed. Thereafter, Customs gives “Out of Charge” and the Custodian releases the goods from CFS by issuing a Gate-Pass.

In respect of exports, the goods are brought directly to CFS under a Shipping Bill. The export cargo in Less than Container Load (LCL)/ Full container Load (FCL) is received by the Custodian of CFS for safe custody. After stuffing of the goods, Container/ Customs Bonded Truck (CBT) is sealed by the Custom Officer and the same is removed from CFS for export through the terminal.

The Inter Ministerial Group (IMG) noted that the Department of Revenue has already taken certain significant steps in the area of facilitation of the trade and simplification of procedures. There is a permanent Action Group on Trade Facilitation which recommends simplification of customs procedures leading to reduction of dwell time in cargo clearances. This group also provides inputs for Trade Facilitation Negotiations at the WTO  The Action Group has since its inception, made The recommendations on which the CBEC has already issued instructions with the overall objective of reduction in dwell time and simplification of procedures:-

1. Direct clearance facility of containers from the ports, without the need for transshipping them to CFS/Customs areas provided to Importers availing Green Channel facility.
2. Reducing procedural formalities at airports by dispensing with the permission required from Customs for palletization of cargo.
3. Imposing penalty on incorrect and incomplete filing of import manifest/ report with the objective of reducing dwell time of cargo.

The overall goal should be to release about 70% of the consignments on the basis of system appraisal and without examination of the cargo. This should be achieved within six months of the full implementation and should be monitored by the CBEC. Regular periodic monitoring should be done by CBEC for further enhancing the facilitation measures.

A faster delivery system needs to be put into place by creating a separate area in the port premises clearly earmarked for immediate delivery of cargo to the specified accredited importers. The proposed arrangement would enable accredited importers to move out their containers without necessarily going through a C.F.S.

Thus, the recommendations made by the Inter Ministerial Group (IMG) in the present report will bring about an efficient and facilitative environment for expeditious Customs clearance of cargo.

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Piracy on the high seas - Its impact on trade and business

For many people, the phrase maritime piracy evokes images of a one-eyed sailor drinking rum and singing obscene songs. For some younger people, piracy may bring to mind the picture of Hollywood actor Johnny Depp, wearing a headband in a scene from the film Pirates of the Caribbean.

However Maritime Piracy is not just an action movie. It is the practice of attacking and robbing ships at sea. The UN Convention on the Law of the Sea defines piracy as “illegal acts of violence or detention” committed on the high seas against ships or aircraft. Piracy is a serious problem and it poses a real threat not only to the safety of vessels and their crews, but also to the economies of affected countries.

Although the issue of piracy recently rather dropped out of the top headlines, the world’s oceans have certainly not become any safer. On the contrary, the level of risk remains high, especially around the coasts of Africa and in the Singapore Straits.  For example in the Horn of Africa, despite a strong presence of naval forces patrolling in the Gulf of Aden and the adjacent Indian Ocean; merchant navy vessels are regularly attacked and hijacked. Of 445 attacks reported globally in 2010, 219 were attributed to Somali pirates. 49 of these were successful hijacking. Yet the waters of Somalia are far from being the only piracy hotspot for International Shipping. Vessels also fall prey to attacks especially off the coast of Nigeria, Indonesia, Malaysia, Bangladesh and in South China Sea.

Though the attacks may differ in location, method and impact, they all share a common trait which is they have become a problem of ‘International Politics’. There are 2 reasons:

1. Shipping routes form arteries of global economy accounting for over 80% of International trade.  So violent attacks here have the potential to cause real harm
2. Piracy touches directly on elementary interests of all trading nations. Security problems on land are increasingly linked to questions of maritime security in the global context.

The spectrum of options is broad and advise is offered to ship owners and masters in constantly being reviewed and Best Management practices guide compiled by IMO and the shipping industry. Measures adopted include registering vessels, planning the transit through the high risk areas around Somalia with national and international authorities that have forces deployed to the region, developing an internal emergency plan to provide an effective response. 

Since the west coast of India is also vulnerable to the long range activities of the Somali pirates, constant vigilance has been enforced.  This however does not prevent random acts of stealing on vessel at anchor which can be considered as piracy on a reduced scale. 

But piracy is not the only security threat at sea. Piracy has drawn attention to wider problems of maritime insecurity, such as trafficking and smuggling of humans, weapons and narcotics, and illegal and unregulated fishing activities. Hence, the attention currently being given to the fight against piracy could be used as a stepping stone by the international community to create sustainable institutions of maritime security. The Indian Government is particularly concerned about the transit of vessels along its coast especially after the Nov 2008 Mumbai terrorist attack where the terrorist landed in the city from the sea.

International institutions are crucial for counter-piracy efforts, but they require long-term and multinational commitment. The African Union has already declared that its objective is to implement the African Maritime Security Strategy by 2050. Among the strategy’s goals are to “ensure security and safety of maritime transportation systems,” and to “prevent hostile and criminal acts at sea, and to coordinate/harmonize the prosecution of the offenders.”

It is a long-term strategy, but without a doubt concerted action is needed now to stop piracy in West and South Africa before it deteriorates and spreads to other coastal areas. 

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Crude Oil exports from U.S. - A recent welcome development!

Mineral oil, now known as crude oil was accidently discovered in Pennsylvania (US) in 1848. The first oil well was drilled in the same location in 1859 and commercial production commenced in 1860. Exports of crude oil by sea commenced in 1861, when a wooden hulled sailing ship, “Elizabeth Watts” carried a full cargo of oil and economic development US became the largest consumer of crude oil (in barrels) from US to UK across the Atlantic.

With industrialization and economic development US became the largest consumer of crude oil. For over a century, US were both an exporter and importer of crude oil, but owing to its high domestic consumption has been a new importer.

Exporting domestically produced crude oil made US an important participant in the global crude oil market, which sets crude prices. This ended in the 1970’s when, in response to the 1973 oil embargo crises, a ban on domestic oil exports was imposed.

Since then, the ban has continued and with growing domestic consumption, declining production for decades, the dependence on imports increased, and made exports unthinkable. Developments of new technology, horizontal drilling and hydraulic fracturing have squeezed torrents of oil from shale rock deep underground. This has resulted in production of more oil in 2013 than ever before and production surpassed imports for the first time in over two decades.

In June 2015, US surpassed Russia and Saudi Arabia to become the world’s biggest producer of crude oil and gas. The next logical step was obviously to lift the ban on exports. However on account of high domestic consumption, US still will be an importer of oil though imports have reduced by about 50% over the last five years.

Now in a historic move considered unthinkable even a few years ago, US has lifted a 40 year ban (1970’s) on export of crude oil and exports of crude oil have commenced. This would be beneficial for energy deficient countries, such as China, Japan, Korea, India, etc. as it would provide one more source for crude oil imports and also have a moderating and stabilizing effect in global oil prices in the long term.

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Ship inspection by high-flying robots! Drone-based remote structural surveys could cut costs and save valuable time

During ship construction and thereafter during the operational life of a vessel, a number of inspections and surveys are required to be carried out. In this regard, a recent innovation is described below.

Unmanned aerial vehicles (UAVs) are increasingly being used for a variety of tasks in the maritime industry to save time, money and, wherever possible, to increase operational efficiency.

With shipbuilders, for example, continually looking for cost-saving innovations and new ways to speed up production, UAVs - more commonly referred to as drone technology - potentially provide a cost-effective solution for many aspects within the construction and maintenance processes.

Ship surveys and inspection work are the type of tasks which could be performed by UAVs and pioneering demonstration tests have recently been carried out in a Polish shipyard to gauge the capability of drones for this essential work. This latest use of ever-evolving drone technology has taken place at the Remontova ship repair yard and involved a flying robot inspecting internal spaces on a ship following an overhaul.

The inspection was carried out on the chemical and product tanker CPO Japan. Conducted by the DNV GL classification team based in Gdansk, Poland, camera-equipped drones were used to visually check the condition of remote structural components through a video streamed to a tablet which was also recorded for review and documentation. One surveyor operated the drone while a second checked the video feed in real time.

The drone was able to access all areas inside the vessel's cargo tanks and, with its powerful headlight and high-definition camera, successfully produced video footage considered to be good enough quality-wise for initial inspection purposes. Traditional close-up surveys may still be required if any structural damage is detected.

According to the surveyors managing the technology demonstration tests, the UAV was remarkably stable in confined spaces as it produced the necessary visual inspection material. Its stability was such that it even managed to rest against the bulkhead while hovering. Contact with the tank wall is possible because of the special frames which protect the propellers.

"We have been looking at ways we could help our customers by accelerating the survey process," says Cezary Galinski, manager of the DNV GL maritime classification flying squad in Gdansk. "Camera-equipped drones are now much more widely available and affordable, and by using them for a first screening we can identify areas that require closer inspection quickly and without extensive staging which can be both costly and time-consuming."

Visual inspection by drones may also prove to be very useful in helping to remove the need for more detailed, hands-on inspections, such as ultrasound thickness measurements, which would avoid the time-consuming and costly expense of erecting scaffolding.

We compliment the team of DNV GL and Remontova shipyard, Poland for the above innovation and look forward to the benefits that would accrue to the shipping industry in savings in time and cost, and enhancement of safety during inspections and surveys.

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“Green” ship recycling yards at Alang…

The recycling industry has changed dramatically over the last few years. It has developed from being a shameful part of our business to being an area that most modern owner wants to be proud of – in the same way they are proud of the standard of their ships in operation. This change has come in part due to the constant focus from environmental groups and the media and has been made possible with a will to change the international legislation governing this area. In a competitive world, the responsibility we have towards our environment cannot be shouldered by some ship owners alone – it must be a common effort from all players in the industry.

The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships was adopted by the International Maritime Organization (IMO) in May 2009.

The Convention regulates the design, construction, operation and preparation of ships to allow for safe and environmentally sound recycling. It will also provide strict guidelines for the operation of ship-recycling yards. The Convention dictates that vessels must carry an Inventory of Hazardous Materials (IHM) on-board. Ship-recycling yards will be required to provide a detailed ship recycling plan before work can commence. Member-states will be asked to ensure that facilities under their jurisdiction comply with the Convention.

Green Ship Recycling services is specially designed for the socially responsible ship owners who demand a demolition process that offers safe working environment at the yard, together with safe removal and disposal of hazardous materials on board. The process of green recycling is tedious and requires proper planning and preparation. "Pre-cleaning" is the first requirement prior demolition. Pre-cleaning is the safe removal of all hazardous materials and wastes such as asbestos, fuel oils and lubes, cable insulation and other PCBs, deck coverings and insulation materials, gases and refrigerants (CFC), paints and thinners, stores and spares, fire alarm sensors and radioactive materials and all other hazardous and potentially hazardous materials. An IHM or Green Passport is the pre-requisite prior to the vessel moving to the recycling facilities.

Whilst in the recycling facility, the acceptable approach is "Demolition" which is the actual cutting up of the ship’s steel structure in blocks of manageable sizes. The correct trimming and steel cutting including the removal arrangements are critical. The blocks with oil content and machinery are placed in special areas on shore with proper drainage and containment arrangements. Firefighting procedures and evacuation routes are manned properly.

The process of Pre-Cleaning and Demolition are fully documented in a 'Green Recycle Plan' - a document developed using the IHM or Green Passport with inputs from yard. This plan has to be prepared in advance and is vital towards green recycling.

Two ship-breaking yards from Alang in Gujarat have become the first ship recycling facilities in entire South Asia to be issued Statements of Compliance (SoC) by Japan’s leading classification society, ClassNK, for taking steps for safer and greener ship recycling. This certification comes at a time when most shipbreaking yards at this recycling unit near Bhavnagar have been battling issues of pollution and contamination for last three decades. Overall the companies feel that Class NK certificate holders from Alang will be given priority when they will go for buying ships.

The main objective is to implement a proper health, safety and environmental approach towards ship recycling. It is hoped that Ship Owners and Ship Breakers work in tandem to implement this project thus ensuring a better and healthier living for future generations.

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DNV GL Approves First Polar Code Compliant Vessel

DNV GL and the Danish Maritime Authority have confirmed that the AHTS Magne Viking, owned by Viking Supply Ships, is in compliance with the IMO Polar Code – an industry first for the classification society.

 The 85-meter (280-foot) Magne Viking, built in 2011, is a high Ice-classed AHTS vessel capable of operations in harsh environment offshore regions, as well as Arctic/Sub-Arctic operations.

Ships operating in the Arctic and Antarctic are exposed to a number of unique risks. Poor weather conditions and the relative lack of good charts, communication systems and other navigational aids pose challenges for mariners. The remoteness of the areas makes rescue or clean-up operations difficult and costly. Cold temperatures may reduce the effectiveness of numerous components of the ship, ranging from deck machinery and emergency equipment to sea suctions. When ice is present, it can impose additional loads on the hull, propulsion system and appendages.

A risk-based approach to regulation is well-established now at IMO and has been incorporated into the Polar Code.

Based on long experience from Arctic operations in low temperatures and ice covered waters, Viking Supply Ships saw value in the Polar Code and decided to implement it early on. The process has included upgrades to the vessel and equipment as well as providing the required documentation.

 The International code of safety for ships operating in polar waters (Polar Code) covers the full range of design, construction, equipment, operational training, search and rescue and environmental protection matters relevant to ships operating in the inhospitable waters surrounding the two poles.

The IMO Polar Code is mandatory for all SOLAS vessel entering Arctic and Antarctic waters from 1 January 2017. The Code is an add-on to existing IMO codes where the main requirements are related to safety (SOLAS) and protection of the environment (MARPOL).

The Code will require ships intending to operate in the defined waters of the Antarctica and Arctic to apply for a Polar Ship Certificate, which would classify the vessel as Category A ship - ships designed for operation in polar waters at least in medium first-year ice, which may include old ice inclusions; Category B ship - a ship not included in category A, designed for operation in polar waters in at least thin first-year ice, which may include old ice inclusions; or Category C ship - a ship designed to operate in open water or in ice conditions less severe than those included in Categories A and B.

The issuance of a certificate would require an assessment, taking into account the anticipated range of operating conditions and hazards the ship may encounter in the polar waters. The assessment would include information on identified operational limitations, and plans or procedures or additional safety equipment necessary to mitigate incidents with potential safety or environmental consequences. Ships will need to carry a Polar Water Operational Manual, to provide the Owner, Operator, Master and crew with sufficient information regarding the ship's operational capabilities and limitations in order to support their decision-making process.

The chapters in the Code each set out goals and functional requirements, to include those covering ship structure; stability and subdivision; watertight and weather tight integrity; machinery installations; operational safety; fire safety/protection; life-saving appliances and arrangements; safety of navigation; communications; voyage planning; manning and training; prevention of oil pollution; prevention of pollution from noxious liquid substances from ships; prevention of pollution by sewage from ships; and prevention of pollution by discharge of garbage from ships.

The Polar code regulation will be implemented through a new SOLAS registration 4, chapter XIV, “Safety Measures for Ships Operating in Polar Waters”, and by amendments to the MARPOL Convention.

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Indian Coastal Shipping – Need of the Hour!

India has a long coastline, spanning 7517 kilometers, forming one of the biggest peninsulas in the world. It is serviced by 12 major ports and 187 notified minor and intermediate ports. These ports account for nearly 90% (by volume) of India’s international trade. Yet, coastal shipping accounts for about only 6 to 7% per cent of the country’s total domestic freight (on a tonne-km basis)

The explosive economic growth as seen in India over the past decade has led to congested roads and over burned railway network. India has 4 million kms of roads, accounting for nearly 60% of the domestic traffic of which the National Highways’, which are 1.7% of the network, carry as much as 40% of the road freight. The Indian Railway network, one of the largest in the world is overburdened and operating at over 100% utilization. While there are numerous projects for up gradation under way, these projects are unlikely to keep pace and meet the future demand.

Coastal shipping is an alternate and most efficient mode of transportation that can help address the challenges faced through use of            and rail. World over use of sea/waterways for transportation is much more prevalent. It is apparent that India has a very significant dependence on road to move cargo. In the case of China and Europe, waterways have a larger share than that of road or rail which is approximately 40 to 41%. There are many inherent advantages of this mode of transportation. Coastal shipping or use of water as a mode of transportation is much safer, more economical and less polluting. Waterways are 50% cheaper than road and about nearly 30% cheaper than rail. The coastal leg, apart from being more fuel efficient, can also carry larger parcel sizes and provides a great opportunity for consolidation of loads.

Looking at the Indian scenario, and to decongest the load on the roads and infrastructure, there is a compelling case for a modal shift of freight from road and rail to waterways. Although water ways is the most efficient, cheaper also viable mode of transport so then, why is it that only about 6% to 7% domestic cargo moves through the coastal mode? There are many reasons that contribute to this low utilization which are stated below:

v  The port marine dues are at a high cost

v  Bunker fuel costs are high and duty is levied 

v  Government taxation for domestic coastal operators is also high and

v  There are customs issues for domestic coastal shipping

There is a definite need to bring in a comprehensive coastal shipping policy. The Ministry of Shipping and Government of India is working on a new policy to promote coastal shipping.

While there is a general shortage of infrastructure for vessel and cargo handling at Indian ports, there is also a need for dedicated infrastructure to handle coastal vessels. There is need to improve operating efficiencies and bring down the overall cost for users. Increasing the draft at many of the minor ports and developing rail and road connectivity are some of steps required. To further augment the connectivity and usage, we need to build terminals and handling facilities on our inland waterways, so that the 14,500 kilometers of river network can be used and connected with the ports.

Expanding the cargo profile, today composition of the domestic cargo is basically dominated by POL, Coal and Iron ore – constituting 90% of all cargo.

The future of the port sector in India, especially for the minor ports hinges a lot on coastal movement and inland waterways. Minor private ports have to play an extremely critical role in the development of coastal shipping. The government needs to encourage PPP (public & private partnership) models for development of infrastructure at ports and rivers to develop connectivity and promote coastal movement.

While the debate on cargo v/s infrastructure has been ongoing, the port developers need to build capacity for attracting domestic cargo and by doing so reduce waiting time and improve operating efficiencies. Thus, coastal shipping will prove beneficial for GDP growth by shifting the transportation mode from land to sea.

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