The term "Chain of Transport" can be defined as involving the intermediate employment of one or more means of transport between the dispatch and reception of transported goods.
A COMMON SCHEME OF CHAIN OF TRANSPORT STRUCTURE IN OVERSEAS TRADING IS REPRESENTED BELOW:
Different means of transport could be employed for pre-and on-carriage activities. Intermediate storage in inland centres might be necessary, or feeder ships could be engaged in the sea transport process. Seaports may be confronted with problems involving challenges relating to the efficiency of a seaport, and secondly, challenges for seaports and their customers resulting from the compulsory "bundling" of different traffic streams.
Specific demands are made by every individual customer on the performance structure of a seaport. The attraction of seaport is essentially dependent when it conforms as closely as possible to the requirements of each and every customer. Shipping companies also desire various facilities from a seaport such as sufficient depth of water to accommodate fully laden ships. Expectations from the ship's viewpoint directly concerning the port operating business can be summarised as:-
-- Technically qualified handling
-- Fastest possible discharging/loading, for cost and timetable reasons: and
-- Uninterrupted flow of cargoes.
Since a container ship must keep to its schedule, there must be no waiting-time in the port. The ship is not prepared to wait for the port. Nowadays the port must wait for the ship. As a rule, productivity and container-move guarantees are important factors. Not every cargo is suitable for consideration. A new kind of container terminal combination must therefore be offered, at which a ship's containers can be loaded or discharged while simultaneously goods of large volume can be rolled in and out of the ship on trailers.
Companies engaged in container handling have been increasing their efforts to reduce turn-round, increase terminal throughput, improve conditions and optimise the employment of machines and staff. While at the beginning of the container age, movements were recorded by card-index or so called stackboards, nowadays more suitable information systems are in use. They have attained an equal degree of importance with the handling itself. Where previously handling systems used to be confined to the terminal area, the modern systems seek to integrate container movement information for inland carriage as well.
EXPORT AND IMPORT BUSINESS SEEK INCREASING FREQUENCY OF SAILINGS:
Comprehensive port performance - it is in this very sector that a very large number of individual demands relating to expertise, flexibility, and reliability in cargo handling are made on the seaport by its clients:
EFFICIENT HINTERLAND CONNECTIONS:
For ships and goods, the choice of a port is not only a matter of qualitative criteria, in regions having a concentration of efficient seaports, the decisive factor in the choice of a seaport will most often be the cost.
FROM THE EXPORTER'S POINT OF VIEW, COST COMPONENTS ARE:
-- Cost of sea transport
-- Cost of hinterland transport
-- Cost of port services
In the total of the chain of transport, the proportion of transport costs to the hinterland have a particular significance. A reduction in the volume rates in many cases could lead to a proportionate increase in transport cost inland. The problem of costs looks similar from the point of view of the shipping company. A decision for or against a port is only partly influenced by the port costs.
It is evident that the demand made on a modern seaport arise from its interface function as well as from the requirements of the ship and goods. In order to keep pace with these demands, it is necessary in the first place to ensure the continual technical development of the port and secondly maintain its price competitiveness.
From the given competitive situation, a permanent stress on the technical and economic competitiveness of the seaport arises. This has led to the positive consequence that a large number of very modern ports have arisen on a coastline only a few hundred kilometers long. It is also noted that in proportion to its cost share within the chain of transport, the seaport is a relatively weak link. A fundamental structural change within the transport economy must be recognised by every seaport as a change for the future.
The transport economy is increasingly coming round to the idea of regarding the whole process of transport from producer ro consignee as one single process which makes particular ports more vulnerable. Within the complete logistical process the port can take over more tasks from its partners than it formerly did.
This corresponds once again to the demands made by customers on the port. The handling centres are increasingly becoming service centres offering complete solutions for the entire chain of transport process from producer to consignee. In this connection seaports will take over more and more distribution tasks - services which may not alter in their outward look but are apt to become increasingly important. By taking on extra tasks the port automatically wins a greater influence on the formation of the chain of transport.
Modern port installations in the conventional general cargo sector have changed considerably in comparison with former times. Further developments in handling-technology have led to ever-shorter turnaround for ships. Parallel to this, considerable storage capacities have been built up at the seaports. A marked tendency in the export industry is to have its owns export stores by sending goods to intermediate storage points at appropriate ports.
This means that in the export sector the seaport is increasingly assuming the function of a kind of buffer storage for industry. For the import sector, it is the prices on the world market which determine the demand for storage capacity. For the seaport this means that vantage points are offered which can eventually be most helpful in gaining stronger influence in the formation of the chain of transport.
The seaports have good opportunities for getting more business by offering distribution services. A port which undertakes distribution tasks for a customer will in this way be much more usefully and closely integrated into the chain of transport. The change of being a competitive port is not likely to be high when the port services are confined to purely cargo handling activities or when only occasional intermediate storage are provided.
Wednesday, January 2, 2008
Wednesday, December 26, 2007
The economics of land, sea logistics
The change from general cargo transport to container shipments resulted in historical change from craft production methods to industrial production by using containers, the general cargo transport gets attributes which are comparable to those of bulk cargo, making it possible to establish whole logistical chains from the shipper's ramp to the receiver's premises.
Due to the increasing importance of material handling costs now-a-days and transport costs the management function is more and more concerned with overall logistics.
Logistics comprise central planning and control of the movement of material and products to optimise their flow from procurement of materials through production and to the distribution to the customers. It may also be defined as the scientific planning, controlling and supervision of materials, persons, energy and information flows in systems. Surveying the logistical cost components, the inventory costs may amount up to 35% of total logistic costs.
It is important to understand that the isolated optimisation of individual functions will not result in an overall optimum solution. The objective is to achieve a high degree of overall efficiency and coordination. This is attained by optimising the interfaces between the various sections on the one hand, and suppliers, customers and providers of logistical services, on the other hand.
The isolated optimisation of single logistic components will not achieve the optimisation of the whole system. In order to reach synergy effects between the logistic components, various methods of system analysis are applied. Thus logistic is a cross section function which controls the entire flow of goods and materials. Taking these terms of reference as a starting point, attention must be paid to the application of system analysis in order to co-ordinate logistic procedures.
This external transport system starts with the interfaces of procurement at the beginning and distribution at the end of the production chain. Synergy and cost saving effects will be gained by reducing the level of inventory stocks and efficient, speedy and economic movement of materials through the system. Thus a determination of a co-ordinated procurement-orientated supply frequency will be the result.
For products which are largely identical in price and quantity, the speed and cost of delivery service are the dominant factor for their relative competitiveness.
THE DELIVERY SERVICE BASICALLY COMPRISES TWO COMPONENTS:
(1) AVAILABILITY: This is understood as the readiness of a product for delivery. A degree of availability of 100% means that the entire range of products will be immediately available: in the case of products to be made to customers specification, production and delivery can be realised within an insignificant time span.
(2) TIME OF DELIVERY: It is understood as the time span between the receipt of order and the delivery to the customers. A definite period is confirmed when accepting an order.
These two elements basically determine the level of delivery services. It should be the objective of logistics to produce the varying levels of delivery service to meet the expectations and requirements of the various markets, groups of customers or individual clients.
THE GENERAL OBJECTIVES OF LOGISTICS CAN BE SUMMARIZED AS FOLLOWS:
(1) Increase in productivity.
(2) Reduction of costs.
(3) Improvement of services.
Conventional liner shipping was dominated by the regulating factory of the shipping conference. The extent of liability along the transport chain was liner shipping company to the sea transport only. In accordance to this market organisation, improvements of transport sully were directed to the individual sections.
The signal sector thinking was encouraged by technological aspects. Heterogeneous cargo units were not suitable for a uniform transport, information and documentation system. The traditional conference system was denoted by a typical supply orientated thinking of all partners within the transport chain.
Containerisation can be split into three major phases. In the first phase cargo flows between the highly industrialised economies were containerised. During the second phase of development some ports on the routes between highly industrialised countries were included in the container transport system.
During the third traffic between highly industrialised countries and countries with rich natural resources (eg oil producing countries) were included in the containerisation process. The reason for including these trades into the containerisation was the congestion in the middle cast ports caused by the repaid growth in imports.
The container transport system was promoted from the very beginning by trucking companies, which were not bound to the routes and regulations or liner shipping. In contrast to the shipping companies their philosophy was to provide an uninterrupted house-to-house service. From the very beginning the cost aspect was one of the dominating factors within the land/sea container logistics.
In the first stage of containerisation the lack of coordination of intermodal transport has resulted in high additional costs for turnaround time of ships, inland carriers, and handling facilities in the seaports as well as in the hinterland.
THE MAJOR REASONS FOR THE INCREASING USE OF INTEGRATED INTERMODAL TRANSPORT SYSTEMS ARE:
(1) Shorter time of delivery from origin to destination.
(2) Lower costs along the whole transport chain.
(3) Greater control of costs, schedules, cargo safety and conditions.
THE ADVANTAGES AND POTENTIAL SAVINGS DEPEND TO A LARGE EXTENT ON THE FOLLOWING FOUR FACTORS:
(1) Efficiency of intermodal transport and turnaround of transfer points in terms of both costs as well as time.
(2) Efficiency of modal split of intermodal operations.
(3) Maximisation continuity of flow, particularly intermodal flow, or large scale direct transport transfer with a minimum of double handling and storage at intermodal interfaces: and
(4) Effectiveness of information and documentation control and transfer.
The most important issue of intermodal transport is effective integration of operation, control and management of the diverse modal links and facilities. This means that not every art of the transport chain can expect an optimisation of its individual operation. If the total intermodal chain of operations is to operate optimally, modal integration requires close coordination of operation, technology, information flow and control with capacities, frequencies of service, routings, and schedules well co-ordinated among interfacing modes of transport.
In other words, intermodal transport to be effective, must have a co-ordinated management or be managed as one co-ordinated transport system. The criteria which accounts for the efficiency of transport system can be derived from quantitative requirements. In this area the prime consideration is the capacity of transport system. A transport system consists of an optimal coordination of:
-- Carrier (sea and land)
-- Transport infrastructure (sea and land)
-- Terminals (handling facilities inland and at the seaports>)
Bottlenecks are bound to occur wherever the three elements-route, vehicle and handling points cannot be adjusted to each other through flexible planning and scheduling.
Due to the increasing importance of material handling costs now-a-days and transport costs the management function is more and more concerned with overall logistics.
Logistics comprise central planning and control of the movement of material and products to optimise their flow from procurement of materials through production and to the distribution to the customers. It may also be defined as the scientific planning, controlling and supervision of materials, persons, energy and information flows in systems. Surveying the logistical cost components, the inventory costs may amount up to 35% of total logistic costs.
It is important to understand that the isolated optimisation of individual functions will not result in an overall optimum solution. The objective is to achieve a high degree of overall efficiency and coordination. This is attained by optimising the interfaces between the various sections on the one hand, and suppliers, customers and providers of logistical services, on the other hand.
The isolated optimisation of single logistic components will not achieve the optimisation of the whole system. In order to reach synergy effects between the logistic components, various methods of system analysis are applied. Thus logistic is a cross section function which controls the entire flow of goods and materials. Taking these terms of reference as a starting point, attention must be paid to the application of system analysis in order to co-ordinate logistic procedures.
This external transport system starts with the interfaces of procurement at the beginning and distribution at the end of the production chain. Synergy and cost saving effects will be gained by reducing the level of inventory stocks and efficient, speedy and economic movement of materials through the system. Thus a determination of a co-ordinated procurement-orientated supply frequency will be the result.
For products which are largely identical in price and quantity, the speed and cost of delivery service are the dominant factor for their relative competitiveness.
THE DELIVERY SERVICE BASICALLY COMPRISES TWO COMPONENTS:
(1) AVAILABILITY: This is understood as the readiness of a product for delivery. A degree of availability of 100% means that the entire range of products will be immediately available: in the case of products to be made to customers specification, production and delivery can be realised within an insignificant time span.
(2) TIME OF DELIVERY: It is understood as the time span between the receipt of order and the delivery to the customers. A definite period is confirmed when accepting an order.
These two elements basically determine the level of delivery services. It should be the objective of logistics to produce the varying levels of delivery service to meet the expectations and requirements of the various markets, groups of customers or individual clients.
THE GENERAL OBJECTIVES OF LOGISTICS CAN BE SUMMARIZED AS FOLLOWS:
(1) Increase in productivity.
(2) Reduction of costs.
(3) Improvement of services.
Conventional liner shipping was dominated by the regulating factory of the shipping conference. The extent of liability along the transport chain was liner shipping company to the sea transport only. In accordance to this market organisation, improvements of transport sully were directed to the individual sections.
The signal sector thinking was encouraged by technological aspects. Heterogeneous cargo units were not suitable for a uniform transport, information and documentation system. The traditional conference system was denoted by a typical supply orientated thinking of all partners within the transport chain.
Containerisation can be split into three major phases. In the first phase cargo flows between the highly industrialised economies were containerised. During the second phase of development some ports on the routes between highly industrialised countries were included in the container transport system.
During the third traffic between highly industrialised countries and countries with rich natural resources (eg oil producing countries) were included in the containerisation process. The reason for including these trades into the containerisation was the congestion in the middle cast ports caused by the repaid growth in imports.
The container transport system was promoted from the very beginning by trucking companies, which were not bound to the routes and regulations or liner shipping. In contrast to the shipping companies their philosophy was to provide an uninterrupted house-to-house service. From the very beginning the cost aspect was one of the dominating factors within the land/sea container logistics.
In the first stage of containerisation the lack of coordination of intermodal transport has resulted in high additional costs for turnaround time of ships, inland carriers, and handling facilities in the seaports as well as in the hinterland.
THE MAJOR REASONS FOR THE INCREASING USE OF INTEGRATED INTERMODAL TRANSPORT SYSTEMS ARE:
(1) Shorter time of delivery from origin to destination.
(2) Lower costs along the whole transport chain.
(3) Greater control of costs, schedules, cargo safety and conditions.
THE ADVANTAGES AND POTENTIAL SAVINGS DEPEND TO A LARGE EXTENT ON THE FOLLOWING FOUR FACTORS:
(1) Efficiency of intermodal transport and turnaround of transfer points in terms of both costs as well as time.
(2) Efficiency of modal split of intermodal operations.
(3) Maximisation continuity of flow, particularly intermodal flow, or large scale direct transport transfer with a minimum of double handling and storage at intermodal interfaces: and
(4) Effectiveness of information and documentation control and transfer.
The most important issue of intermodal transport is effective integration of operation, control and management of the diverse modal links and facilities. This means that not every art of the transport chain can expect an optimisation of its individual operation. If the total intermodal chain of operations is to operate optimally, modal integration requires close coordination of operation, technology, information flow and control with capacities, frequencies of service, routings, and schedules well co-ordinated among interfacing modes of transport.
In other words, intermodal transport to be effective, must have a co-ordinated management or be managed as one co-ordinated transport system. The criteria which accounts for the efficiency of transport system can be derived from quantitative requirements. In this area the prime consideration is the capacity of transport system. A transport system consists of an optimal coordination of:
-- Carrier (sea and land)
-- Transport infrastructure (sea and land)
-- Terminals (handling facilities inland and at the seaports>)
Bottlenecks are bound to occur wherever the three elements-route, vehicle and handling points cannot be adjusted to each other through flexible planning and scheduling.
Thursday, December 20, 2007
The glorious history of shipping
Shipping plays a very vital and significant role in today's global economy. The transportation through sea routes is considered the most economical and cheapest mode of transport which gave rise to ship building and movement of trade by using available waterways internally for local transportation of goods and subsequently through sea for intercontinental trades.
The trade has been growing steadily with each passing day from the inception and recognition of interdependence on each others products, be it agricultural or industrial. Countries which are rich in raw materials and have surplus tend to export these resources to other countries which are industrialised and able to use theses materials to produce finished material by value addition and re-export to the needy countries.
Like-wise the countries having agro based economy, depend upon agricultural produce for export of their surplus commodities, however, the countries do face a situation of trade imbalance when their imports outweigh exports by value. Pakistan is facing trade imbalance of 8 billion plus.
Shipping has witnessed various ups and downs from the very inception of this mode of transport and has undergone various technological changes. Without shipping, intercontinental, trade, the bulk transport of raw materials and the import / export of affordable food and manufactured goods would simply not be possible.
Of all the sectors that make up the global transport infrastructure, shipping probably has the lowest public profile and the least representative public image.
Today, we live in a global world, and it is certainly true that international trade among all the nations and regions of the world is nothing new. The history of the world is a history of exploration. Conquest and trade by sea. But there is no doubt that we have now entered a new era of global interdependence from which there can be no turning back.
In today's world, national boundaries offer little impediment to multi-national corporation. The process of globalisation has been made possible by the progressive dismantling of barriers to trade and capital mobility.
Fundamental technological advances, steadily declining costs of transport, communication and computing, its integrative logic seems inexorable, its momentum irresistible.
Looking back into history, we can trace the stages through which we have progressed to arrive at this new world order. As the world became more developed, proximity to new materials and to markets became the factors that, above all others, shaped the world's economy and,. In particular, the major trade patterns and shipping routes, today, international trade has evolved to the point where almost no nation can be fully self-sufficient.
Every country is involved, at one level or another, in the process of selling what it produces and acquiring what it lacks: none can be dependent only on its domestic resources. Shipping has always provided the only really cost-effective method of bulk transport over any great distance, and the development of shipping and the establishment of a global system of trade have moved forward together, hand-in-hand.
The eternal triangle of producers, manufacturers and markers are brought together through shipping. This has always been the case and will remain so for the foreseeable future.
Advance in technology have also made shipping an increasingly efficient and swift method of transport. Over the last four decades, total seaborne trade has more than quadrupled, from less than 6 thousand billion ton-miles in 1995 to over 27 thousand billion ton-miles in 2004 and continues to grow steadily. In the context of a global economy, the contribution made by shipping as a major industry in its own right is very significant, and increasingly so for the developing world.
Maritime activity already provides an important source of income to many developing countries, Indeed, developing countries now lead the world in some of shipping's most important ancillary business, including the registration of ships, the supply of sea-going manpower and ship recycling. They also play a significant part in shipowning and operating, shipbuilding and repair and port services, among others.
The history of shipping is a glorious and proud one. There is no doubt, for example, that the magnificent square riggers of the era of sail or the early ~ century's prestigious ocean liners could stir the hearts of all hose that beheld them. But the ships of today are just as worthy of our admiration, for shipping today is in another golden age.
Ships have never been so technically advanced, never been so sophisticated, never more immense, never carrier of so much cargo, never been safer and never been so environmentally-friendly after introduction of engine powered ships, as they are today.
Ships are high value assets, with the larger of them costing over US $100/150 million to build. Ships today are modern, technologically advanced workplaces. Although general cargo ships are still largest single category, among new ships is more and more in favour of specialisation for specific trades, ie edible/non-edible product carriers to LPG/CNG carriers. Tankers make up the second largest category.
Most large modern tankers are in the 200-3 00,000 tonnage range. The world's largest ship today is a 564,765 dwt tanker. Bulk carriers are often called the workhorses of the international shipping fleet that typically transport commodities such as grain, coal and mineral ores. Passenger ships come next in the world fleet league table. One of the finest modern examples of passenger liner is the Queen Mary II, built in France for Carnival Corp's Cunard in 2004. QM2 is the largest, longest, tallest, widest ocean liner over and has cost an estimated 800 million US dollars.
But the one sector which can be said to have transformed the face of shipping, certainly in the latter half of the 20~ Century, is that of container shipping. Unheard of before the 1 960s, the containers are now ubiquitous and the standard unit of cargo for just about every form of manufactured item on the planet.
Of all the sectors that make up the global transport infrastructure, shipping probably has the lowesr public profile and the least representative public image. In terms of efficiency, safety, the environment and its contribution to global trade, shipping is unmatched by any other transport sector.
History may be the harshest of judges but this is also true that no form of commercial transport is likely to emerge to challenge shipping as the carrier of world trade in the foreseeable future.
As far as maritime security is concerned, it is appropriate to recall the words of UN Secretary General Kofi Annan in his report to the 2005 world summit: "we will not enjoy development without security, we will not enjoy security without development, and we will not either without respect for human dignity. Unless all these causes are advanced, none will succeed".
Shipping affects us all. No matter where you may be in the world, if you look around you it is almost certain that you will see something that either has been or will be transported by sea, whether in the form of raw materials, components or the finished article. The sea knows no international barriers and the ship is as important now as it ever was, perhaps more so. Standards of living in the industrialised and developed world, the jobs and livelihoods of billions in the developing world, all depend on ships and shipping.
The shipping industry remains the most neglected sector of our economy, being 100% dependent on foreign flag vessels as far as containerised trade of over 1.8 mill teas handled at both ports and also bulk trade. Having achieved a peak of 71 Pak flag vessel's of 749,046 dwt, now we are left with only 14 ships out of which 11 are nearing 30 years and that too in public sector only.
A very serious thought is necessitated by the government to plan replacement of 11 public sector ship's and inducing private sector as on the pattern of India in 1980's when new ship owners were induced by, offering loan at 4%.
It is not only freight bill of USD 2 bill burden on our exchequer, but we cant discount the fact that we are totally dependent on foreign lines, who can dictate us further making our impo/expo incompetitive and creating trade imbalance of over 10 bill USD. PNSC is the last monument of Pak Merchant Marine, thus be supported, as merchant navy club has been razed to the ground.
Indian fleet of 450 Vessel's 8.8 million gross tonnage is a good example of public and private sector co-operation. The shipping corporation of India (public sector) 80% government owned enterprise earned a profit of 2.06 billion IRS (50.8 m USD) and owns 79 vessels. It is managed by shipping professionals and board comprising commercial maritime members.
The chairman is optimistic to spend 3 billion USD to get 100 mark. SCI Chairman insists on level playing field in order compete with all players with edge on professional skills. Indian impo/expo is going to touch 1 / billion tons mark by 2010 compared to Pakistan 58 million tons which may touch 70/75 million tons by 2010.
I fail to understand, how any country can ignore this sector which is the lifeline of the country. The old adageis" who rules the sea, rules the world, ". Form a think tank of professionals and business related people to suggest how to overcome the problem of industry. There is no dearth of skilled shipping experts who may volunteer if given recognition in their country. Pakistanis have established Neptune orient line of Singapore and Abudhabi tanker company and many more.
The trade has been growing steadily with each passing day from the inception and recognition of interdependence on each others products, be it agricultural or industrial. Countries which are rich in raw materials and have surplus tend to export these resources to other countries which are industrialised and able to use theses materials to produce finished material by value addition and re-export to the needy countries.
Like-wise the countries having agro based economy, depend upon agricultural produce for export of their surplus commodities, however, the countries do face a situation of trade imbalance when their imports outweigh exports by value. Pakistan is facing trade imbalance of 8 billion plus.
Shipping has witnessed various ups and downs from the very inception of this mode of transport and has undergone various technological changes. Without shipping, intercontinental, trade, the bulk transport of raw materials and the import / export of affordable food and manufactured goods would simply not be possible.
Of all the sectors that make up the global transport infrastructure, shipping probably has the lowest public profile and the least representative public image.
Today, we live in a global world, and it is certainly true that international trade among all the nations and regions of the world is nothing new. The history of the world is a history of exploration. Conquest and trade by sea. But there is no doubt that we have now entered a new era of global interdependence from which there can be no turning back.
In today's world, national boundaries offer little impediment to multi-national corporation. The process of globalisation has been made possible by the progressive dismantling of barriers to trade and capital mobility.
Fundamental technological advances, steadily declining costs of transport, communication and computing, its integrative logic seems inexorable, its momentum irresistible.
Looking back into history, we can trace the stages through which we have progressed to arrive at this new world order. As the world became more developed, proximity to new materials and to markets became the factors that, above all others, shaped the world's economy and,. In particular, the major trade patterns and shipping routes, today, international trade has evolved to the point where almost no nation can be fully self-sufficient.
Every country is involved, at one level or another, in the process of selling what it produces and acquiring what it lacks: none can be dependent only on its domestic resources. Shipping has always provided the only really cost-effective method of bulk transport over any great distance, and the development of shipping and the establishment of a global system of trade have moved forward together, hand-in-hand.
The eternal triangle of producers, manufacturers and markers are brought together through shipping. This has always been the case and will remain so for the foreseeable future.
Advance in technology have also made shipping an increasingly efficient and swift method of transport. Over the last four decades, total seaborne trade has more than quadrupled, from less than 6 thousand billion ton-miles in 1995 to over 27 thousand billion ton-miles in 2004 and continues to grow steadily. In the context of a global economy, the contribution made by shipping as a major industry in its own right is very significant, and increasingly so for the developing world.
Maritime activity already provides an important source of income to many developing countries, Indeed, developing countries now lead the world in some of shipping's most important ancillary business, including the registration of ships, the supply of sea-going manpower and ship recycling. They also play a significant part in shipowning and operating, shipbuilding and repair and port services, among others.
The history of shipping is a glorious and proud one. There is no doubt, for example, that the magnificent square riggers of the era of sail or the early ~ century's prestigious ocean liners could stir the hearts of all hose that beheld them. But the ships of today are just as worthy of our admiration, for shipping today is in another golden age.
Ships have never been so technically advanced, never been so sophisticated, never more immense, never carrier of so much cargo, never been safer and never been so environmentally-friendly after introduction of engine powered ships, as they are today.
Ships are high value assets, with the larger of them costing over US $100/150 million to build. Ships today are modern, technologically advanced workplaces. Although general cargo ships are still largest single category, among new ships is more and more in favour of specialisation for specific trades, ie edible/non-edible product carriers to LPG/CNG carriers. Tankers make up the second largest category.
Most large modern tankers are in the 200-3 00,000 tonnage range. The world's largest ship today is a 564,765 dwt tanker. Bulk carriers are often called the workhorses of the international shipping fleet that typically transport commodities such as grain, coal and mineral ores. Passenger ships come next in the world fleet league table. One of the finest modern examples of passenger liner is the Queen Mary II, built in France for Carnival Corp's Cunard in 2004. QM2 is the largest, longest, tallest, widest ocean liner over and has cost an estimated 800 million US dollars.
But the one sector which can be said to have transformed the face of shipping, certainly in the latter half of the 20~ Century, is that of container shipping. Unheard of before the 1 960s, the containers are now ubiquitous and the standard unit of cargo for just about every form of manufactured item on the planet.
Of all the sectors that make up the global transport infrastructure, shipping probably has the lowesr public profile and the least representative public image. In terms of efficiency, safety, the environment and its contribution to global trade, shipping is unmatched by any other transport sector.
History may be the harshest of judges but this is also true that no form of commercial transport is likely to emerge to challenge shipping as the carrier of world trade in the foreseeable future.
As far as maritime security is concerned, it is appropriate to recall the words of UN Secretary General Kofi Annan in his report to the 2005 world summit: "we will not enjoy development without security, we will not enjoy security without development, and we will not either without respect for human dignity. Unless all these causes are advanced, none will succeed".
Shipping affects us all. No matter where you may be in the world, if you look around you it is almost certain that you will see something that either has been or will be transported by sea, whether in the form of raw materials, components or the finished article. The sea knows no international barriers and the ship is as important now as it ever was, perhaps more so. Standards of living in the industrialised and developed world, the jobs and livelihoods of billions in the developing world, all depend on ships and shipping.
The shipping industry remains the most neglected sector of our economy, being 100% dependent on foreign flag vessels as far as containerised trade of over 1.8 mill teas handled at both ports and also bulk trade. Having achieved a peak of 71 Pak flag vessel's of 749,046 dwt, now we are left with only 14 ships out of which 11 are nearing 30 years and that too in public sector only.
A very serious thought is necessitated by the government to plan replacement of 11 public sector ship's and inducing private sector as on the pattern of India in 1980's when new ship owners were induced by, offering loan at 4%.
It is not only freight bill of USD 2 bill burden on our exchequer, but we cant discount the fact that we are totally dependent on foreign lines, who can dictate us further making our impo/expo incompetitive and creating trade imbalance of over 10 bill USD. PNSC is the last monument of Pak Merchant Marine, thus be supported, as merchant navy club has been razed to the ground.
Indian fleet of 450 Vessel's 8.8 million gross tonnage is a good example of public and private sector co-operation. The shipping corporation of India (public sector) 80% government owned enterprise earned a profit of 2.06 billion IRS (50.8 m USD) and owns 79 vessels. It is managed by shipping professionals and board comprising commercial maritime members.
The chairman is optimistic to spend 3 billion USD to get 100 mark. SCI Chairman insists on level playing field in order compete with all players with edge on professional skills. Indian impo/expo is going to touch 1 / billion tons mark by 2010 compared to Pakistan 58 million tons which may touch 70/75 million tons by 2010.
I fail to understand, how any country can ignore this sector which is the lifeline of the country. The old adageis" who rules the sea, rules the world, ". Form a think tank of professionals and business related people to suggest how to overcome the problem of industry. There is no dearth of skilled shipping experts who may volunteer if given recognition in their country. Pakistanis have established Neptune orient line of Singapore and Abudhabi tanker company and many more.
Wednesday, December 12, 2007
Environment protection in seaports
The debacles of oil tanker M.T. "GOLDEN GATE" which spilled 1800 M/Tons oil on August 2002 and thereafter massive oil spill of 30,000 M/Tons by oil tanker M.T. "TASMAN SPIRIT" in August 2003 at Karachi Port caused havoc to our beaches and forced residents of DHA and Clifton to move out due to pungent smell.
The spill had created havoc not only to marine life but resident ashore were equally affected. The both oil tankers were said to be owned by one company which as per records / sire inspection of vessel was black listed in USA with poor track record of seaworthiness.
On both instances port management was caught unaware as port has limitation to deal with oil spill, thus foreign assistance was necessitated to salvage the situation. The MPCD of KPT did its best with limited resources.
Karachi Port receives untreated sewerage of city and accident of a oil tanker can cause havoc to marine life and mangroves, thus the only way to check recurrence is to equip ports to OPRC II level and train all staff in environmental protection. "Prevention is better than cure".
We, must learn from the past thus enquiry report of incidents be made public and debated, where we went wrong. The owners of the vessel having revoked the arbitration clause as per English law and it is said that arbitration award has been made, thus document be made public for benefit of all.
The level of operational safety and the quality of the environmental protection in a port is a function of various factors: awareness and skill of personnel, quality of facilities and administrative and organisational structures. Greater emphasis is now attached to protection of the environment in ports since tremendous damage has been done to the environment.
There is no part of the environment that is not affected. There is a wide range of sources for pollution but activities to fight and reduce pollution are as yet inadequate. It is, therefore, considered essential that priority is given to the avoidance of pollution of any kind rather than to fight pollution.
At the same time, as the risk of pollution will remain imminent, preparations have to be made to fight pollution and reduce damage to the environment as far as possible. Ports have to cover items of environmental protection and to assist ships in complying with internationally agreed rules to protect the marine environment by providing reception facilities for the different residues originating from ship-operation and to enforce national regulations for the protection of the environment against advance effects of port operation.
The only regulation applicable world-wide for the protection of a vital part of the environment is the "International Convention for the Prevention of Pollution from Ships, 1973" as amended by the "Protocol of 1978 Relating to the International Convention for the Prevention of Pollution from Ships, 1973 (MARPOL 73/78).
This convention consists of the convention itself, covering basic items as are: general obligations of contracting parties, rules for ratification, entry into force, amendments and denunciation, a protocol I dealing with incident reporting, a protocol II which contains rules for arbitration and 5 annexes covering details of pollution prevention from various sources annexure-I, and annexure-II, are "Mandatory Annexes".
That means, any state becoming party to the convention will automatically be bound to apply these two annexes while annexure-III, annexure-IV and annexure-V are "Optional annexes". This means, a state becoming or being party to the Convention has to declare whether it accepts any or all of these annexes.
For ports the obligations to make available reception facilities is an indirect result of the MARPOL-convention. Only by a national law that makes the contents of the convention binding for its nationals and foreign port users, the Convention is given its operational basis.
In most countries there are more specialised laws, regulations and recommendations to protect the environment and avoid or fight any pollution. Rule making is only one part of the protection of the environment in a port. The other part is to provide for the technical means or special installations to meet the requirements.
Annexure-I, II, IV and V to MARPOL 73/78 require that ships shall not or only under certain conditions and in limited quantities discharge oily residues, liquid noxious substances, sewage or garbage into the sea: such residues have to be delivered to shore-reception facilities and ports should provide such facilities and ports should be free to decide on their own whether they will charge a ship for using reception facilities on a case by case basis, including a certain amount in the harbour dues or make the use free for ships and pay the changes out of public funds. Garbage from ships may consist of domestic waste. Accordingly, collecting services in a port should be set up by installing a regular collection for domestic waste.
By setting up rules of procedures and enforcing technical safety measures and/or installations, ports and terminal operations, as the competencies may be divided locally, have to do whatever possible to prevent damage to the environment. It could be wrongly taken that damage to the environment is just caused by different kinds of technical operations.
It has to be clearly seen that behind all these operations are people who design, operate and execute. People who are engaged in port planning and operation have to be made aware of possible sources of pollution and the adverse result of pollution for the environment. They should know how to prevent and fight pollution in case it has happen. Environmental protection should, therefore, be included in all kinds of training at all levels.
The spill had created havoc not only to marine life but resident ashore were equally affected. The both oil tankers were said to be owned by one company which as per records / sire inspection of vessel was black listed in USA with poor track record of seaworthiness.
On both instances port management was caught unaware as port has limitation to deal with oil spill, thus foreign assistance was necessitated to salvage the situation. The MPCD of KPT did its best with limited resources.
Karachi Port receives untreated sewerage of city and accident of a oil tanker can cause havoc to marine life and mangroves, thus the only way to check recurrence is to equip ports to OPRC II level and train all staff in environmental protection. "Prevention is better than cure".
We, must learn from the past thus enquiry report of incidents be made public and debated, where we went wrong. The owners of the vessel having revoked the arbitration clause as per English law and it is said that arbitration award has been made, thus document be made public for benefit of all.
The level of operational safety and the quality of the environmental protection in a port is a function of various factors: awareness and skill of personnel, quality of facilities and administrative and organisational structures. Greater emphasis is now attached to protection of the environment in ports since tremendous damage has been done to the environment.
There is no part of the environment that is not affected. There is a wide range of sources for pollution but activities to fight and reduce pollution are as yet inadequate. It is, therefore, considered essential that priority is given to the avoidance of pollution of any kind rather than to fight pollution.
At the same time, as the risk of pollution will remain imminent, preparations have to be made to fight pollution and reduce damage to the environment as far as possible. Ports have to cover items of environmental protection and to assist ships in complying with internationally agreed rules to protect the marine environment by providing reception facilities for the different residues originating from ship-operation and to enforce national regulations for the protection of the environment against advance effects of port operation.
The only regulation applicable world-wide for the protection of a vital part of the environment is the "International Convention for the Prevention of Pollution from Ships, 1973" as amended by the "Protocol of 1978 Relating to the International Convention for the Prevention of Pollution from Ships, 1973 (MARPOL 73/78).
This convention consists of the convention itself, covering basic items as are: general obligations of contracting parties, rules for ratification, entry into force, amendments and denunciation, a protocol I dealing with incident reporting, a protocol II which contains rules for arbitration and 5 annexes covering details of pollution prevention from various sources annexure-I, and annexure-II, are "Mandatory Annexes".
That means, any state becoming party to the convention will automatically be bound to apply these two annexes while annexure-III, annexure-IV and annexure-V are "Optional annexes". This means, a state becoming or being party to the Convention has to declare whether it accepts any or all of these annexes.
For ports the obligations to make available reception facilities is an indirect result of the MARPOL-convention. Only by a national law that makes the contents of the convention binding for its nationals and foreign port users, the Convention is given its operational basis.
In most countries there are more specialised laws, regulations and recommendations to protect the environment and avoid or fight any pollution. Rule making is only one part of the protection of the environment in a port. The other part is to provide for the technical means or special installations to meet the requirements.
Annexure-I, II, IV and V to MARPOL 73/78 require that ships shall not or only under certain conditions and in limited quantities discharge oily residues, liquid noxious substances, sewage or garbage into the sea: such residues have to be delivered to shore-reception facilities and ports should provide such facilities and ports should be free to decide on their own whether they will charge a ship for using reception facilities on a case by case basis, including a certain amount in the harbour dues or make the use free for ships and pay the changes out of public funds. Garbage from ships may consist of domestic waste. Accordingly, collecting services in a port should be set up by installing a regular collection for domestic waste.
By setting up rules of procedures and enforcing technical safety measures and/or installations, ports and terminal operations, as the competencies may be divided locally, have to do whatever possible to prevent damage to the environment. It could be wrongly taken that damage to the environment is just caused by different kinds of technical operations.
It has to be clearly seen that behind all these operations are people who design, operate and execute. People who are engaged in port planning and operation have to be made aware of possible sources of pollution and the adverse result of pollution for the environment. They should know how to prevent and fight pollution in case it has happen. Environmental protection should, therefore, be included in all kinds of training at all levels.
Wednesday, November 28, 2007
Government must take immediate steps to revive ship-breaking
Ship-breaking industry is also referred to as ship scrapping, ship dismantling and even ship re-cycling. Whatever name we call it by, it involves breaking up a ship at the end of its useful life and then to re-cycle various components. Most of the steel finds their way to re-rolling mills.
While the western world is engaged in high technology industry, some of the third world countries developed the skill in ship breaking. A large number of people in India, Pakistan, Bangladesh and China are engaged in this industry directly and many others in associated industries as its by product.
The ship-breaking industry is making substantial contribution to their national economies. It has its down side as well. The health and safety standards are poor resulting into frequent accidents and casualties. The industry with no environmental control or protection has been also causing long term environmental damage.
The industry needs to be regulated to provide safety and environmental safeguards without disturbing its natural growth based on supply demand and expertise. Recently various UN agencies with no respect or regard for each other's role and competence got engaged into the matter. Is it all genuine love for safety and environment or an attempt to build up respective empire or even make it another high technology industry for the western world?
Any attempt to improve safety and environmental standards must not be so radical to deprive the third world countries. It has to be a slow and gradual process otherwise it will disturb the present balance. Any radical attempt will be viewed as a conspiracy to deprive the third world countries of their cheap labour intensive industry.
The International Maritime Organisation is a specialised agency of the United Nations dealing with maritime safety and protection of the maritime environment. It uses the slogan "safe ships and cleaner seas", Till this time IMO has developed a number of International instruments consistent to its role and function.
The Member States implement the provisions of those instruments to make the seas much safer and cleaner then what they would have been without such internationally agreed standards. SOLAS is the paramount IMO Convention and ISM Code (under SOLAS) deals with safe operation of ships and protection of the marine environment.
The important part is "safe operation". Recently IMO has been deliberating a lot about ship-breaking - its safety and environmental impact. The question is whether such matters are IMO remit. Ship-breaking is certainly not a part of the maritime industry and by no means a part of the "safe operation". As a matter of fact when a ship is withdrawn from service and de-registered, it is no more a ship.
It is then merely a structure. At this point the structure is out of the IMO remit. Breaking up such a structure ashore is a shore-based industry. The health and safety aspect including other conditions should be the remit of the ILO and its national link body such as the ministry of industry or labour.
The environmental matter should be of UNEP concern and its national link body dealing with environment in general (and not marine environment alone). There is apparently no role for IMO. It is not clear as to why IMO is trying to get so much involved in this matter.
IMO has done real good work in the field of maritime safety and protection of the maritime environment and has set up a reputation for itself as one of the most effective UN agency. Perhaps it should not tarnish its image by unnecessary involvement in matters beyond its filed of competence.
Talking in terms of 'Flag State' and ' last owner' - are all counter-productive and waste of time. Who is going to declare himself as the last owner? When the ship-owner thinks that further operation of the ship is not viable, he will sell it off. He does not have to declare that he is selling it for scrapping.
The question of "Green Passport" is unrealistic. If the ship has to obtain a green passport' from a highly industrialised country when why should it go to the third world country any more? That is the end of the game. The discussion that took place at IMO even referred to contract between ship-owner and the breaking yard as if it is that simple.
In practice it is a different world. The ship may pass through five different hands before it ends up in the breaking yard. The breaking yard may not own the vessel or any part thereof at any time. The breaking yard may merely be taken on lease by a person or company undertaking the business. References to so many different parties are totally unnecessary and would not provide any practicable solution.
The Basel Convention exists to regulate the transport of hazardous materials to developing countries by making the ship and its exporter responsible. I agree with the philosophy that a developing country should not be the dumping ground but how can a live operational ship be regarded as waste. Application of the concept of export-import (to operational ships) will complicate the whole issue. The Basle Convention certainly does not apply to ships.
The Flag State remains responsible so long the vessel operates under its Flag. Once the vessel is de-registered then it is no more the extended floating territory of the Flag State. Then the structure should be under full control and jurisdiction of the State where it is located. An operational ship sailing for a destination is under no obligation to disclose in advance its future intention of scrapping.
This will only encourage ship-owners and scrap-buyers to indulge into illegal activities, perhaps at sea, to avoid the eyes of law. Until the last day of operation under its own power the ship must comply with all requirements of survey, audit and certification under applicable IMO instruments for safe operation and protection of the environment. A ship should be considered as an export commodity only if it is being towed to another country for scrap.
The ideal solution is perhaps to draw a Convention specifically on ship-breaking. The world maritime community at IMP should adopt a resolution calling up on the competent UN agencies to act without further delay. The lead agency should be ILO with UNEP providing necessary guidance on environment related matters.
Any international instrument must focus on the recycling country because it is only that Party who can exercise effective jurisdiction and control. A broad outline of such an international instrument is suggested below.
Member States should not allow a ship to be abandoned, dumped or broken up within its jurisdiction unless it complies with the requirements of the instrument;
Member States shall after necessary verification license scrapping yards within its jurisdiction that meet the standards of health, safety and environment as stipulate in the instrument. The Member States shall subject the continuation of the license to periodic inspection and review to ensure the compliance of the standards at all times. The owner (person or company) responsible for the ship intended to be scrapped in Member State shall apply to a designated authority for a permit.
The application shall contain the following details:
-- particulars of the company or persons involved in the business ;
-- particulars of the ship:
-- particulars of the licensed breaking yard;
-- brief description of any pollutant, toxic or hazardous substances still remaining on board and plans for their safe disposal;
-- an outline of the ship-breaking programme.
-- Once the authority is satisfied with the proposed plan, it shall grant necessary permit. The authority may attach any clause or condition if deemed necessary;
-- The authority while granting such a permit shall keep the State, under whose Flag the vessel arrived to the recycling State informed.
This will be a simple, workable and effective way of dealing with all aspects (health, safety and environment of the ship-breaking without involving too many parties and certainly without creating any conflict or overlapping of responsibilities of various agencies. The Ministry of Environment shall act as a focal point for recycling of ships, as it is a shore-based industry.
REGIONAL SCENARIO: Record prices for scrap, rising freight market and dearth of vessels on sale has created difficulty for demo business and all yards in the subcontinent are suffering except Bangladesh which demolished 4.8m DWT during 2006, way ahead of Indian's 1m dwt, whilst Pakistan and China Shared 0.25m DWT.
The ship-breaking at Gaddani was flourishing prior to 2004 and offering employment, has virtually collapsed rendering thousands jobless. The historical average till 2004 was 155 USD per LDT, prices are now 500/USD/LDT plus. Bangladesh buyers are offering USD 530/LDT for clean tanker and USD 470/LDT for bulker whereas Indians and Pakistanis can offer Max USD: 470.00 and USD: 435.00 respectively for wet and dry tonnage.
China has forbidden beaching due to environmental consideration and only scraps in docks, with new docks built in China to make demo environmental friendly recycling sites. Only Pakistan, India and Bangladesh allow beaching which is likely to be forbidden by new basell/IMO convention and the efforts of Green peace.
Pakistan's ship-breakers, already reeling from impossible price competition, have been further hit with increase in import and sales tax on scrap tonnage effective July, 1, 2007. The Pakistani ship-breakers are now in no position to compete and will shut down their demo operation/business.
The west was quite upset as most of the demo industry was flourishing in the subcontinent, thus new regulation of green passports and recycling in docks only has been introduced, so that idle yards of west may be re-activated/used.
The Directorate General of Ports and Shipping, being focal point of IMO, must resist the move of passing convention on recycling in the Marine environmental protection committee meeting and in recent IMO assembly of 18th November 2007. We, must save our nascent industry by telling IMO, that its jurisdiction, does not apply, as ship recycling is shore based industry.
The searching question is, does any one is concerned or aware of these developments or are they able to comprehend the negative effects of new international convention on our demo industry. The answer is No Atleast we can support India and Bangladesh who send qualified and competent people to international forums to safeguard their national interest.
We must make efforts to revive the ship breaking industry to meet our needs of iron and steel and employment of thousand of workers attached to this industry, otherwise developed countries with international regulation will bar beaching on shore. We have no dry docks available to comply with the forthcoming regulation, we must educate ship breaking industry for its survival in future.
While the western world is engaged in high technology industry, some of the third world countries developed the skill in ship breaking. A large number of people in India, Pakistan, Bangladesh and China are engaged in this industry directly and many others in associated industries as its by product.
The ship-breaking industry is making substantial contribution to their national economies. It has its down side as well. The health and safety standards are poor resulting into frequent accidents and casualties. The industry with no environmental control or protection has been also causing long term environmental damage.
The industry needs to be regulated to provide safety and environmental safeguards without disturbing its natural growth based on supply demand and expertise. Recently various UN agencies with no respect or regard for each other's role and competence got engaged into the matter. Is it all genuine love for safety and environment or an attempt to build up respective empire or even make it another high technology industry for the western world?
Any attempt to improve safety and environmental standards must not be so radical to deprive the third world countries. It has to be a slow and gradual process otherwise it will disturb the present balance. Any radical attempt will be viewed as a conspiracy to deprive the third world countries of their cheap labour intensive industry.
The International Maritime Organisation is a specialised agency of the United Nations dealing with maritime safety and protection of the maritime environment. It uses the slogan "safe ships and cleaner seas", Till this time IMO has developed a number of International instruments consistent to its role and function.
The Member States implement the provisions of those instruments to make the seas much safer and cleaner then what they would have been without such internationally agreed standards. SOLAS is the paramount IMO Convention and ISM Code (under SOLAS) deals with safe operation of ships and protection of the marine environment.
The important part is "safe operation". Recently IMO has been deliberating a lot about ship-breaking - its safety and environmental impact. The question is whether such matters are IMO remit. Ship-breaking is certainly not a part of the maritime industry and by no means a part of the "safe operation". As a matter of fact when a ship is withdrawn from service and de-registered, it is no more a ship.
It is then merely a structure. At this point the structure is out of the IMO remit. Breaking up such a structure ashore is a shore-based industry. The health and safety aspect including other conditions should be the remit of the ILO and its national link body such as the ministry of industry or labour.
The environmental matter should be of UNEP concern and its national link body dealing with environment in general (and not marine environment alone). There is apparently no role for IMO. It is not clear as to why IMO is trying to get so much involved in this matter.
IMO has done real good work in the field of maritime safety and protection of the maritime environment and has set up a reputation for itself as one of the most effective UN agency. Perhaps it should not tarnish its image by unnecessary involvement in matters beyond its filed of competence.
Talking in terms of 'Flag State' and ' last owner' - are all counter-productive and waste of time. Who is going to declare himself as the last owner? When the ship-owner thinks that further operation of the ship is not viable, he will sell it off. He does not have to declare that he is selling it for scrapping.
The question of "Green Passport" is unrealistic. If the ship has to obtain a green passport' from a highly industrialised country when why should it go to the third world country any more? That is the end of the game. The discussion that took place at IMO even referred to contract between ship-owner and the breaking yard as if it is that simple.
In practice it is a different world. The ship may pass through five different hands before it ends up in the breaking yard. The breaking yard may not own the vessel or any part thereof at any time. The breaking yard may merely be taken on lease by a person or company undertaking the business. References to so many different parties are totally unnecessary and would not provide any practicable solution.
The Basel Convention exists to regulate the transport of hazardous materials to developing countries by making the ship and its exporter responsible. I agree with the philosophy that a developing country should not be the dumping ground but how can a live operational ship be regarded as waste. Application of the concept of export-import (to operational ships) will complicate the whole issue. The Basle Convention certainly does not apply to ships.
The Flag State remains responsible so long the vessel operates under its Flag. Once the vessel is de-registered then it is no more the extended floating territory of the Flag State. Then the structure should be under full control and jurisdiction of the State where it is located. An operational ship sailing for a destination is under no obligation to disclose in advance its future intention of scrapping.
This will only encourage ship-owners and scrap-buyers to indulge into illegal activities, perhaps at sea, to avoid the eyes of law. Until the last day of operation under its own power the ship must comply with all requirements of survey, audit and certification under applicable IMO instruments for safe operation and protection of the environment. A ship should be considered as an export commodity only if it is being towed to another country for scrap.
The ideal solution is perhaps to draw a Convention specifically on ship-breaking. The world maritime community at IMP should adopt a resolution calling up on the competent UN agencies to act without further delay. The lead agency should be ILO with UNEP providing necessary guidance on environment related matters.
Any international instrument must focus on the recycling country because it is only that Party who can exercise effective jurisdiction and control. A broad outline of such an international instrument is suggested below.
Member States should not allow a ship to be abandoned, dumped or broken up within its jurisdiction unless it complies with the requirements of the instrument;
Member States shall after necessary verification license scrapping yards within its jurisdiction that meet the standards of health, safety and environment as stipulate in the instrument. The Member States shall subject the continuation of the license to periodic inspection and review to ensure the compliance of the standards at all times. The owner (person or company) responsible for the ship intended to be scrapped in Member State shall apply to a designated authority for a permit.
The application shall contain the following details:
-- particulars of the company or persons involved in the business ;
-- particulars of the ship:
-- particulars of the licensed breaking yard;
-- brief description of any pollutant, toxic or hazardous substances still remaining on board and plans for their safe disposal;
-- an outline of the ship-breaking programme.
-- Once the authority is satisfied with the proposed plan, it shall grant necessary permit. The authority may attach any clause or condition if deemed necessary;
-- The authority while granting such a permit shall keep the State, under whose Flag the vessel arrived to the recycling State informed.
This will be a simple, workable and effective way of dealing with all aspects (health, safety and environment of the ship-breaking without involving too many parties and certainly without creating any conflict or overlapping of responsibilities of various agencies. The Ministry of Environment shall act as a focal point for recycling of ships, as it is a shore-based industry.
REGIONAL SCENARIO: Record prices for scrap, rising freight market and dearth of vessels on sale has created difficulty for demo business and all yards in the subcontinent are suffering except Bangladesh which demolished 4.8m DWT during 2006, way ahead of Indian's 1m dwt, whilst Pakistan and China Shared 0.25m DWT.
The ship-breaking at Gaddani was flourishing prior to 2004 and offering employment, has virtually collapsed rendering thousands jobless. The historical average till 2004 was 155 USD per LDT, prices are now 500/USD/LDT plus. Bangladesh buyers are offering USD 530/LDT for clean tanker and USD 470/LDT for bulker whereas Indians and Pakistanis can offer Max USD: 470.00 and USD: 435.00 respectively for wet and dry tonnage.
China has forbidden beaching due to environmental consideration and only scraps in docks, with new docks built in China to make demo environmental friendly recycling sites. Only Pakistan, India and Bangladesh allow beaching which is likely to be forbidden by new basell/IMO convention and the efforts of Green peace.
Pakistan's ship-breakers, already reeling from impossible price competition, have been further hit with increase in import and sales tax on scrap tonnage effective July, 1, 2007. The Pakistani ship-breakers are now in no position to compete and will shut down their demo operation/business.
The west was quite upset as most of the demo industry was flourishing in the subcontinent, thus new regulation of green passports and recycling in docks only has been introduced, so that idle yards of west may be re-activated/used.
The Directorate General of Ports and Shipping, being focal point of IMO, must resist the move of passing convention on recycling in the Marine environmental protection committee meeting and in recent IMO assembly of 18th November 2007. We, must save our nascent industry by telling IMO, that its jurisdiction, does not apply, as ship recycling is shore based industry.
The searching question is, does any one is concerned or aware of these developments or are they able to comprehend the negative effects of new international convention on our demo industry. The answer is No Atleast we can support India and Bangladesh who send qualified and competent people to international forums to safeguard their national interest.
We must make efforts to revive the ship breaking industry to meet our needs of iron and steel and employment of thousand of workers attached to this industry, otherwise developed countries with international regulation will bar beaching on shore. We have no dry docks available to comply with the forthcoming regulation, we must educate ship breaking industry for its survival in future.
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