Shipping – Heading North?

Financial year 2000 ended on a promising note for the shipping sector. Port traffic during the year registered an 8% growth at 272 million tonnes. The signs of improved global trade scenario should boost the domestic trade as well.

The shipping sector is witnessing a good year in terms of traffic growth thanks to the improved trade scenario. Major ports handled 25 million tonnes, the highest in FY00, during March 2000. The share of petroleum, oil and lubricant in the total cargo transported during the year is up 43% followed by 13.6% for coal.

' 000 tonnes	FY98	FY99	FY00	Projections for IXth five year plan (as on 31.2.2002)
POL	104,038	105,852	116,636	186,726
Iron Ore	39,227	32,544	34,224	34,400
Fertilisers	9,854	9,813	10,191	93,710
Coal	39,393	38,746	37,085	14,212
Containers in ' 000 MT	23,120	23,782	27,692	38,665
Other Cargoes	35,875	40,958	46,041	56,225
Total	251,507	251,695	271,869	423,938

After posting negligible growth in both FY98 and FY99, shipping volumes in most segments have been improving with the recovery in the demand for commodities and renewed economic growth in Asia. This is backed by significant growth in both exports and imports for India as well.

The margins for the shipping companies should improve with the overall freight rate indicator, the Baltic index, rising in recent months. Topline growth should benefit from additions made to the gross registered tonnage (grt) (shipping capacity) during the year.

Domestic shipping companies are beginning to shake off the recent slowdown in global trade. In coming months, as the Japanese, Southeast Asian and the Indian economies accelerate, the sector is likely to benefit from higher traffic and better freight rates. The latter however would also depend on additions to shipping capacity.