Know your Ministry - No. 53 - Shipping

Maritime Transport is a critical infrastructure for the social and economic development of a country as it influences the pace, structure and pattern of development. The Ministry of Ports, Shipping and Waterways encompasses within its fold shipping and ports sectors which include Shipbuilding and Ship-repair, Major Ports, National Waterways, and Inland Water Transport. It has been entrusted with the responsibility to formulate policies and programmes and their implementation. To encourage private participation, Ministry of Ports, Shipping and Waterways has laid down comprehensive policy guidelines for private sector participation in the Ports sector.

ACTS & RULES THAT REGULATE THE SHIPPING INDUSTRY

The Coasting vessels Act, 1838; The Northern India Canal and Drainage Act, 1873; The Obstructions in Fairways Act, 1881; The Indian Ports Act, 1908; The Inland Vessels Act, 1917; The Indian Carriage of Goods by Sea Act, 1925; The Light House Act, 1927; The Dock Workers (Regulation of Employment) Act, 1948; The Calcutta Port (Pilotage) Act, 1948; The Merchant Shipping Act, 1958; The Major Port Trusts Act, 1963; The Seamens Provident Fund Act, 1966; The Dock Workers (Regulation of Employment) Amendment Act, 1980; The Hooghly Docking and Engineering Company Limited (Acquisition and Transfer of Undertakings) Act, 1984; The Inland Waterways Authority of India Act, 1985; The Merchant Shipping (Amendment) Act, 1986; The Multimodal Transportation of Goods Act, 1993; The Dock Workers (Regulation of Employment) (Inapplicability to Major Ports) Act, 1997; The Suppression of Unlawful Acts Against Safety of Maritime Navigation and Fixed Platforms on Continental Shelf Act, 2002; The Indian Maritime University Act, 2008; The National Waterways Act, 2016.; The Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017; The Recycling of Ships Act, 2019

ORGANISATIONS OF THE MINISTRY

Subordinate/Attached Offices

Directorate General of Shipping, Mumbai, Andaman & Lakshadweep Harbour Works, Port Blair; Directorate General of Lighthouses and Lightships;

Autonomous Bodies

Kolkata Port Trust; Paradip Port Trust; Visakhapatnam Port Trust; Chennai Port Trust; V.O.Chidambarnar Port trust; Cochin Port Trust; New Mangalore Port Trust; Mormugao Port Trust; Mumbai Port Trust; Jawaharlal Nehru Port Trust; Deendayal Port Trust; Kochi Port Trust; Kandla Port Trusts; seamen's provident fund Organisation; Dock Labour Board Kolkata; Inland Waterways Authority of India; Tariff Authority for Major Ports; Indian Maritime University;

Public Sector Undertakings

Shipping Corporation of India, Mumbai; Cochin Shipyard Limited, Cochin.; Central Inland Water Transport Corporation Limited.; Hooghly Dock & Ports Engineers Limited.; Kamarajar Port Limited.; Indian Port Rail Corporation Limited; Indian Port Global Limited; Sethusamudram Corporation Limited;

Societies/Association 

Indian Ports Association.; Seafares welfare fund society;

Divisions of the Ministry

Accounts, Administration, Budget, Development, Finance, Shipping, IWT, Industrial Cooperation, PHRD, Ports, Sagarmala, Transport Research & Official Language.

CHALLENGES BEFORE THE SHIPPING INDUSTRY

• The shipping industry continues to be affected by chronic problems related to ageing fleet, inability to participate in critical sectors and large-ticket contracts of Liquefied Natural Gas(LNG)trade and its carriage.
• Ministry needs to identify and address the attributes that eventually impact transportation cost.
• Major Indian shipping companies are bankrupt, while others are in insolvency process due to lack of specialised funding to Indian shipping companies. 
• There is an urgent need to augment Indian tonnage and increase the quantity of EXIM and coastal cargo carried on Indian ships.
• Shipping companies face restricted cash inflows due to very low charter hire and freight rates in all segments due to inconsistent cost of logistics.
• Impact of COVID19 on Maritime and Cruise Industry has resulted in disruption in Supply Chains, Ports and Logistics Infrastructure. Cruise-liners have suspended its operations and cancelled bookings till the end of this year.
• Manpower Shortage due to lack young people taking up career in seafaring as many officers preferring to sail on board foreign flag vessels owing to attractive salaries.
• Supply Chain Challenge posing threats for survival as Businesses/markets are linked by cash flow that form an inevitable part of the value chain of the shipping industry.
• Compliance of Regulations involves huge cost though such regulatory framework makes stricter entry barriers into the industry.
• Decline Share of Indian Shipping Tonnage in India’s Overseas Trade due to high transportation costs, port delays, poor turnaround time of coastal ships on account of over-aged vessels, and inadequate mechanical handling, which are ultimately prevented many new players or existing players to add new ships to the Indian fleet.

WAY FORWARD

• To explore and establish monopoly in major shipping trade routes under:  Important trade routes Crude and product imports, Iron ore exports, Coking coal imports, Thermal coal, Iron ore and Fertilizer and fertilizer material.
• Need to regulate and streamline the Onerous Tax Regime as the shipping industry is facing significant tax burden such as minimum alternate tax, dividend distribution tax, withholding tax liability on interest paid to foreign lenders & on charter hire charges paid to foreign ship owners which is ultimately squeezing the bottom line/profit margin.
• Need for Legal Reforms and consolidate the multiple and repetitive laws through under a standard globalized Regulatory framework under the mandate of all coastal countries.
• Technical advancement and integration is needed to offset the depressed freight rates and shortage of trained and qualified seafarers at optimum pay scales.
• To devise a robust cost-effective & skilled manpower base, established steel industry, technology know-how and an increased demand in domestic shipbuilding that could enhance India's global shipbuilding
• Need for Indian shipyards to develop a suitable investment plans and accessed capital markets to play an increasing role under the Make in India programme.
• Need for the Indian maritime sector needs to be constantly on the lookout for technologies and advancements that help save cost and improve its productivity parameters.
• Ministry needs to devise an Action Plan to increase the capacity of the ports in terms of their berths and cargo handling equipment needs to be vastly improved to cater to the growing requirements of the overseas trade.
• There is an intense need of integration – connecting port authorities, shipping lines, road transports authorities, railways authorities and inland waterways systems to facilitate smooth operations.
• Ministry needs to regulate and standardise the Indian logistics rate removing all the bottlenecks in logistics sector through various cost cutting or austerity measures to achieve a sustainable growth.http://shipmin.gov.in/