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Report
1
Pakistan’s Shipping Potential
3rd December, 2014
Commodore (R) Syed M Obaidullah SI(M) - Shipping Consultant
Commodore (R) Syed M Obaidullah SI(M) – Defence & Shipping Analyist
IDEAS 2014 – Marriot Hotel Karachi
Presentation Plan
•
What is the Current World Shipping Scenario ?
•
Where does Shipping in Pakistan stand and why?
•
What can we do & Who will do it ?
What is the Current World
Shipping Scenario ?
World Economy & Outlook
The world has witnessed negative effects of global economic recession of late 2008 viz:
 Global Liquidity Crisis
 Shipping industry and trade being the most affected sectors of world trade
 Low freight indices and rates have changed the market dynamics
 Imbalance of demand & supply as capacity has outweighed trade growth.
World Economy & Outlook
Global economic recovery has further weakened and became more uneven due:
 Earthquake and tsunami in Japan disrupted global manufacturing – 2011
 Arab spring drove up oil prices
 Financial strains in Euro area financial and sovereign debt markets deepened
 Crisis in
Ukraine, Syria & Iraq (ISIS)
World Economy & Outlook
10
8
5.6
6
3.6
4
2
1.5
0
-2
-4
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Advanced economies
Emerging market and developing economies
Source: World Economic Outlook Update, January 23, 2013c
World
World Shipping - Current Scenario
World Shipping - Current Scenario
Largest Owned Fleets – DWT
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
Source: Review of Maritime Transport, UNCATD
Total as % of World Fleet
In December 2014
The price reached
66 Dollars, Lowest
in the last 5 years.
Source: Drewry
11
Does Global Economic
Recession
have
a
positive
side
and
present opportunity to
Pakistan Shipping?
YES!
and we can do it!
Shipping Market Outlook
Confidence in Shipping
Source: Moore Stephens
Wasn’t 2014 the year shipping markets
were meant to be better?
Since the dust settled on the global financial crisis the
shipping industry seems to have been on the verge of a
medium term recovery, however, year after year it has
remained tantalizingly on the horizon but never getting
any nearer.
Where does Shipping in
Pakistan stand and why?
Why it is important to know about state of
shipping in Pakistan ?
 Pakistan is paying approx US$ 3.5 B annually to foreign carriers.
 50 M of 67 M tones annual trade is carried by foreign ships.
 Over 50% of Pakistan’s Strategic cargo i.e. POL and 85 % of dry cargo is
carried by Foreign Carriers. Foreign dominance
 Shipping in Public Sector only with 9 ships
History of Shipping in Pakistan
Year
Milestone
1947
Only 3 ships in private sector
1960
Increased to 41 ships in private sector
1963
National Shipping Corporation(NSC) launched in public sector
1974
All private shipping nationalized to form Pakistan Shipping corporation( PSC)
1979
NSC & PSC merged to form PNSC. Total 48 ships
1992
Private Shipping again permitted – 48 licenses issued
1993-96
Four groups added 9 vessels
Tri Star, Ray Shipping, Minwala shipping, Dewan Shipping*
2001
Liberal Shipping Policy announced
2006
Mega container Line*
* None survived beyond approx 2-3 years operation
Pakistan National Shipping Corporation
Pakistan National Shipping Corporation
Historical Fleet and Carrying Capacity
*Average Age 10 years
Year
Number of
Ships
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2013
2014
48
42
44
45
43
35
31
29
26
23
23
22
22
22
22
19
15
17
15
15
15
15
14
14
13
14
14
15
14
14
11
10
11
9
9
DWT
(in MT)
579,486
547,923
590,868
650,984
634,976
515,632
468,199
449,983
410,234
370,766
370,766
352,716
352,716
352,716
352,716
313,040
264,410
290,353
261,836
261,836
261,836
261,836
243,749
243,749
229,579
469,931
570,466
636,182
536,821
536,821
477,238
633,273
646,666
642,207
683796
Pakistan National Shipping Corporation
Commercial Performance
Pakistan Sea Trade
(Million Tons)
PNSC
(Million Tons)
PNSC Contribution
(%)
FY2000
37.6
3.95
10.51
FY2010
61.0
7.92
12.98
FY2011
62.0
9.33
15.05
FY2012
63.3
10.31*
16.28
FY2013
62.4
13.3
21.45
FY2014
67.77
17.91
26.40
Year
*Highest lifting since 1979
Pakistan National Shipping Corporation
Operating Profit / (Loss) – FY1979- FY2014
Profit / Loss
After Taxation
Rs in Thousands
Profit / Loss
After Taxation
Year
Number of Ships
8,907
1996
15
39,152
42
25,990
1997
15
71,599
1981
44
26,936
1998
15
101,811
1982
45
(84,751)
1999
15
(102,400)
1983
43
(336,140)
2000
15
(582,373)
1984
35
(297,431)
2001
14
(224,560)
1985
31
8,990
2002
14
496,390
2003
13
615740
1986
29
25,505
2004
14
1,782,990
1987
26
(2,259,133)
2005
14
2,898,540
1988
23
(702,948)
2006
15
1,427,550
1989
23
(276,998)
2007
14
2,336,873
1990
22
201,497
2008
14
2,448,880
1991
22
126,562
2009
11
2,312,842
1992
22
68,078
2010
10
967,824
1993
22
(95,292)
2011
11
1,632,942
1994
19
(326,640)
2012
9
753,155
2013
9
1,990,000
1995
15
(443,208)
2014
9
2,149,057
Year
Number of Ships
1979
48
1980
Why have we come to this status ?
Why have we come to this status ?
 Lack of awareness, political will & lukewarm Patronage due to Continental
mind set
 Legal regime not in harmony with international best practices.
 Manifestos of political parties not adequately connecting food, defence and
energy security of Pakistan to maritime domain
 Poor image of Industry
 Absence of Cabotage trade
Suitable Environment Available ? - YES

67 M ton/annum of Pakistan seaborne trade to carry

Assured Cargo of approx. 23 m ton per annum (POL & LNG). Transportation cost
in P RS, saving of FE component

Employment for Pakistani seafarers. Graduates of Pakistan Marine Academy

Freight rates are improving

Price of ships are still 45% lesser than 2008 prices. A rare and real opportunity.

Expanding requirement of dredging

Funding up to 80% available for purchase of vessels
What can Pakistan do ?
&
Who will do it ?
Solutions
What should the Government do ?

2001 Shipping Policy be revised - More incentives to investors and existing
anomalies be removed

Tanker and LNG ships be added to carry captive cargo of LNG and POL

Modern dredgers be added to augment current capacity

Govt. Directive to CNS as Chief Technical Advisor on Maritime Affairs be
completely revamped, to be comprehensive and effective.

Policy - Heads of all Maritime Organizations & BoD be institutionalized
What should the Private Sector & Media do ?

Private sector particularly Bahria Foundation should take a step forward and
invest in shipping including dredging.

Bahria & other Universities conduct courses country wide in maritime discipline
particularly shipping

TV channels should dedicate airtime on regular basis for awareness and
promotion of shipping industry in Pakistan
What should the Politicians do ?
 Add
a Chapter in party manifesto to harvest God
Given Gift
 Bring
about fresh and attractive policies for shipping
sector like many other maritime nations including
India have done
Finally, What can you do ?
Just Remember…
YOU are a
Maritime Nation!
Act Accordingly!
THANK YOU
32

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