The shipping industry is fundamental to international trade, being the only practicable and cost effective way means of transporting large volumes of many essential commodities and finished goods.  Although maritime transport has generally been associated with the carriage of high-volume, low-value goods such as iron ore and coal, over recent years the share of low-volume, high-value goods such as manufactured goods carried by sea has been growing. This shift is a function of global and regional GDP growth and a growing dislocation between the locations of resources, manufacturing bases and key areas of consumption. . During the past three decades, the annual average growth rate of world seaborne trade is estimated to have been 3.1% per annum.  There are four main segments in the shipping industry: bulk carriers, which transport such raw materials as coal and grain; tankers, which transport such cargo as crude oil, petroleum products and chemicals; container vessels, which transport freight shipped in containers; and gas tankers which transport mostly liquefied petroleum gas (or “LPG”) and LNG.(Source:  UNCTAD )

India’s Shipping Industry

At the end of 1951, India had five Major Ports with a throughput of 20 million tonnes per annum. Over the next three decades, India’s throughput increased to 78 million tonnes per annum.By 2010,India had 12 Major Ports, and these ports achieved a total throughput of 561 million tonnes per annum . The traffic at Indian ports has grown at a compound annual growth rate of 7.4% during the period from 1994 to 2010.Shipping plays an important role in India’s economy. Approximately 95% of the country’s import and export merchandise trade by volume, and 70% by value, is moved by sea.During this period, the Indian merchant shipping fleet grew from 59 vessels of 192,000 GT (Gross Tonnage) in 1947 to 1007 vessels of 9.61 million GT as of June 30, 2010.

India’s Merchant Fleet transports less than 1/10th of the Sea Borne Trade

Approximately 9.5% of India’s overseas trade is carried by the Indian merchant fleet. Historically, there has been a significant gap between growth in India’s overseas trade and available tonnage in the Indian merchant fleet. As a result, the share of Indian overseas trade being shipped by the Indian merchant fleet has declined. The tanker industry is the most voluminous element of global seaborne trade.

Issues with India’s Shipping Industry

India’s Shipping Industry has constantly declined despite the Indian economy growing by almost 8-10% in the past 5 years .Indian Flag Vessel marketshare has reduced to under 10% in 2010 from 37%.It is because the Shipping Industry suffers from a lack of good companies . The largest company is the state owned SCI which has been tardy in expanding capacity to take advantage.Recently SCI has given orders to increase fleet capacity by more than 50%.Government policies have also been not too favorable despite shipping being a very strategic industry from the point of view of defense.Note in times of war the country’s merchant fleet forms one of the most important weapons in the arsenal needed for logistics and transportation of war materials and personnel.

Note Shipping is a cyclical industry and currently the industry is facing rough weather as the global shipping industry is facing a supply glut.However that’s no reason for Indian shipping industry to face a trough as its marketshare remains quite low.Unlike other sectors like autos,steel,oil and gas,the shipping industry has failed to compete and as a result has become a minnow in its own backyard.

List of the major shipping companies in India

1. Shipping Corporation of India Ltd SCI is India’s largest shipping line by tonnage deriving most of its revenues from oil/gas transport.SCI like other shipping companies has faced a very bad 2009 due to the sharp contraction in world trade and dropping in shipping rates.However results have started to improve with the improvement in the world economy and it is returning to its normalized sales and profits. As the country’s largest shipping line, the SCI owns and operates around one-third of the Indian tonnage, and has operating interests in practically all areas of the shipping business; servicing both national and international trades. In 2010, the Company owned 18 bulk carriers consisting of 15 Handymax and three Handysize vessels & the total quantity of crude oil transported by the Company was about 24.89 million metric tons. SCI’s owned fleet includes Bulk carriers, Crude oil tankers, Product tankers, Container vessels, Passenger-cum-Cargo vessels, Phosphoric Acid / Chemical carriers, LPG / Ammonia carriers and Offshore Supply Vessels. SCI recently came out with a FPO to increase the public shareholding.
2. Great Eastern Shipping Company Limited is India’s largest private sector shipping company.The company has two main business: shipping and offshore. The shipping business is involved in transportation of crude oil, petroleum products, gas and dry bulk commodities. The offshore business services to the oil companies in carrying out offshore exploration and production activities, through its wholly owned subsidiary Greatship (India) Limited.The company has been trying to list Greatship through an IPO  The dry bulk fleet stood at six vessels aggregating 0.41 million deadweight tonnage, with an average age of 13.6 years as of March 2010.
3. Essar Shipping Ports & Logistics is an integrated logistics solution provider with investments in ports and terminals, logistics services, sea transportation and oilfield drilling services.It is a part of the Essar Group one of India’s largest business conglomerates with interests in Steel,Oil and Gas etc.  It is one of India’s largest operators of ports and are building a cargo-handling capacity (dry, bulk and liquid cargo) of over 150 million tonnes. The Company, through its wholly owned subsidiary, Essar Logistics Limited (ELL) provides project cargo, transshipment, lighterage and trucking services to steel mills and oil refineries. Essar Shipping Ports & Logistics Limited, through its subsidiary, Essar Bulk Terminal Limited (EBTL), commissioned its all weather deep draft dry bulk port of 30 million tons per annum capacity in 2010. The Company operated the 46 million metric tons per annum liquid terminal on the west coast of India as on 2010. The company owns a diverse fleet of 27 vessels, and 12 new building vessels are on order at an investment of over USD 1.8 billion.
4. Varun Shipping Company Limited – Varun is a private sector shipping company in India  with a fleet of 20 vessels, in the LPG and crude oil sectors. The Company owns/operates a fleet often liquefied petroleum gas (LPG) carriers, including eight mid-size Gas Carriers, one Large Gas Carrier  and one Very Large Gas Carrier, which have been deployed on a mix of time charters and spot charters with charterers, such as Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited, Bharat Petroleum Corporation Limited, Reliance Industries Limited and Pertamina. In the crude oil sector, the Company owns three double hull Aframax crude oil tankers, which are placed in the Sigma Tanker Pool, trading globally. In the offshore support services sector, the Company owns/operates a fleet of seven Anchor Handling Towing and Supply vessels, which are deployed on time charters and spot charters both in India and overseas.Varun’s freight and charter hire income for the year  2010 was Rs. 6,662 million and its net profit was Rs. 125  million. Varun has a track record of being profitable and distributing dividends uninterruptedly to its shareholders for the past 26 years.Varun is the second largest owner of tonnage in the global mid- size fully refrigerated LPG carrier fleet category and owns 12.7% of the total tonnage in that category. Globally, in the fully refrigerated LPG carriers category, Varun is also the fourth largest owner in terms of number of vessels and sixth largest in terms of cargo carrying capacity.
5. Mercator Lines Ltd – Mercator is India’s second largest private sector shipping company with diversified interests ranging from Shipping, Coal, Dredging and Offshore Oil and Gas services. The shipping segment includes tankers, such as very large crude carrier (VLCC), Suezmaz, Aframaxes, product tankers and chemical tankers. Its bulk carrier fleet consists of geared and gearless Panamaxes, and Kamsarmaxes and very large ore carrier (VLOC). The offshore segment includes jack-up rigs, oil and gas exploration. As on 2010, the Company owned total 11 vessels of aggregate tonnage of 1,033,708 deadweight (DWT) and three chartered-in vessels of aggregate tonnage of 260,165 DWT.