The Hindu Business Line : SCI scouting for bigger box vessels

THE Shipping Corporation of India (SCI) is looking for container ships of the 3,000-3,500-TEU capacity for acquisition on charter, but is finding it difficult to locate them in the international market.

It appears that the shipping line has to be content with lower capacity vessels, about 2,000-2,500 TEUs, for now if it is to stick to the service schedules for the UK/Continent and the US.

The ISE (Indian Subcontinent Europe) consortium did not place mainline vessels for the UK/Continent service on May 9 and 16. This was because two of its members, Yang Ming Line (YML) and SCI, failed to place the vessels on those days. The vessel, Ming Prominence, which YML was supposed to place on May 9, had to be sent for emergency dry-docking following an accident while SCI Gaurav, the SCI vessel, was withdrawn following the expiry of the charter period, and the public sector shipping line could not fill the vacuum by acquiring on charter another vessel immediately. The schedule for May 23, when Cape Charles is due to be placed, remains unchanged so far but for May 30, it is uncertain. According to an earlier plan, SCI is supposed to place the vessel, SCI Vaibhav, on that day but as the situation stands now, the vessel may not be available.

The shipping line, now on a scouting mission, is prepared to settle for a lower-capacity vessel but that too, it appears, is a distant possibility. It might be noted that at least on two earlier occasions, the ISE consortium failed to place the mainline vessels — in December last year and again in February this year.

On the US route, SCI offers one vessel. The charter period of the vessel currently being run on the route will expire some time in August/September. However, SCI would not like to see the repetition of what has happened on the UK/Continent sector.

The non-availability of the type of container ships SCI is looking for has been caused by the non-arrival of higher capacity new buildings in the international market. Earlier, it was thought that several new higher capacity vessels (5,000-TEU and above) would emerge on the international shipping scene by the middle of 2004, making a number of 3,000- to 3,500-TEU capacity vessels freely available for charter hire. However, that did not happen.

SCI's service upgradation plan, due in mid-2004, received a setback as a result. The public sector shipping line had planned to upgrade its both UK/Continent and the US services by replacing the present 2,600-TEU vessels by 3,500-TEU capacity vessels. However, that is not going to happen immediately, or so it appears.

Meanwhile, the demand-supply imbalance is believed to have set the charter market on fire. SCI, which had earlier acquired a 2,600-TEU vessel at as low a rate at $12,000 per day, may now be required to cough up as much as $30,000 per day if the contract is for a short period. For long-term contract, the rate might be a little lower.