June 15, 2015 1:12 pm Published by

Cabinet agrees to amend Merchant Shipping Act

 Accession to International Bunker Convention

The Union Cabinet, chaired by the Prime Minister, Mr Narendra Modi, has approved the Ministry of Shipping’s (MoS) proposal for the country’s accession to the International Bunker Convention on Civil Liability for Bunker Oil Pollution Damage, 2001 of the International Maritime Organization (IMO). It also agreed to amend the Merchant Shipping Act, 1958 to give effect to the Bunker Convention, Nairobi Convention and Salvage Convention, official sources said.

The Bunker Convention ensures adequate, prompt and effective compensation for damage caused by oil spills when carried as fuel in ships’ bunkers. The territorial jurisdiction for damage compensation extends to territorial sea and exclusive economic zones. It applies to an Indian vessel, wherever it is situated, and to a foreign flag vessel while it is within the Indian jurisdiction, sources added.

The registered owner of every vessel should maintain compulsory insurance cover which allows claim for compensation for pollution damage to be brought directly against an insurer.

According to official sources, every ship above one thousand gross tonnage has to carry a certificate on board to the effect that it maintains insurance or other financial security, such as the guarantee of a bank or similar financial institution.


In India, the Directorate-General of Shipping (DG Shipping) shall issue the certificate, and in foreign countries their respective maritime authorities will do the same. No vessel will be permitted to enter or leave India without such a certificate.

The liability cover for pollution damage shall be equal to the limits of liability under the applicable national or international limitation regime, but in all cases not exceeding an amount calculated in accordance with the Convention on Limitation of Liability for Maritime Claims, 1976. India is a party to Limitation of Liability for Maritime Claims convention and its provisions already exist in the Merchant Shipping Act and Rules thereunder.

If India does not become a party to the Bunker Convention, Indian flag ships calling foreign ports will have to continue with the present dispensation of approaching foreign countries for bunker insurance compliance certificates, whereas foreign ships visiting Indian ports are not subjected to compulsory insurance.

The proposed amendments to the Merchant Shipping Act, 1958, if enacted, shall also give effect to the Nairobi Wreck Removal Convention and the Salvage Convention of IMO, to which India is already a party. It will facilitate more purposeful approach towards removal of wrecks and salvage, protect Indian waters from wreck hazards, and introduce internationally recognised and approved rules for removal of wrecks.

Spot rates will continue to remain volatile, says study

The volatility in global spot freight rates since the start of 2015 has continued to increase in comparison to 2014, according to rate assessments on 11 routes gathered by the World Container Index (WCI). Price turbulence on the globally important Asia to Europe routes has been particularly high in 2015 with monthly volatility increasing 43 per cent on average in comparison to 2014.


The monthly volatility (a measure of how widely prices fluctuate in a 4-week period and, therefore, an indicator of the risk in a market) has increased by 14 per cent on the WCI composite index, which is a weighted average of all 11 underlying routes in the first 20 weeks of 2015.

 “The two most volatile routes among the 11 we track are Shanghai-Rotterdam and Shanghai-Genoa, with weekly rate increases of $1,000 or more seen during some weeks and monthly volatility of over 40 per cent since the start of this year,” said Mr Richard Heath, Director of WCI. Taking all routes into account, the WCI composite index went from $2,092 per 40-ft container in late February to $1,263/40-ft in late April, before increasing again to $1,611 on May 14, 2015, said a report.

 Mr Philip Damas, Director at Drewry, which jointly owns WCI with Cleartrade Exchange, said: “The World Container Index assessed by Drewry, tracks and documents what is an increasingly volatile market. The reduction of spot rates is welcome by most shippers, but many non-contract shippers are not currently equipped to cope with huge volatility in their freight costs.”

The World Container Index is the only weekly container pricing index based on actual agreed freight assessments reported by industry players in Asia, Europe and the US and is not financed or backed by either shipper or carrier interests

L &T Ports, Kattupalli embarks on a RoRo journey

L&T Ports, Kattupalli received its maiden pure car carrier, Mitsui O.S.K. Lines’ M.V.GARDENIA ACE on June 8, 2015, heralding the beginning of another diverse operation involving shipments of completely-built units (CBUs) through the Port. Daimler India Commercial Vehicles and Kobelco cranes exported their trucks and machineries through this maiden call.

A grand ceremony was held at the Port to commemorate the occasion. The first vehicle was flagged off by Mr C. V. Sankar, IAS, Additional Chief Secretary, Industries, government of Tamil Nadu, Dr Niranjan Mardi, IAS, Principal Secretary/Vice-Chairman and CEO, Tamil Nadu Maritime Board, and Mr K. Veeraraghava Rao, IAS, District Collector, Tiruvallur. Distinguished guests from Daimler India, Kobelco Group, MOL and Ennore Auto Logistics graced the occasion. Mr E. T. Samson, SP of Tiruvallur, Mr C. M. Madhanagopal of Chennai Customs, and senior officials from TIDCO and the Tamil Nadu government were also present.


Mr K. Venkatesh, Director, L&T Shipbuilding Ltd, and other senior officials of L&T Ports, Kattupalli felicitated the representatives from Daimler, Kobelco and MOL. The L&T Ports management thanked the three companies for their support to the Port. Many other auto majors using Kattupalli for container business are also evaluating the facility for commencing export and import of their CBUs, said a release.


L&T Ports, Kattupalli has been making steady progress since its commissioning, ramping up volumes for containers with regular calls of TCX,CHX, PIX2, ECS and SMILE services, connecting Singapore, Laem Chabang, Colombo and Jebel Ali, besides Vizag and Kolkata. The Port has also been handling break-bulk, project and RoRo cargo.

Automobile majors see great advantage in using Kattupalli port for their RoRo business, given its proximity to their plants and due to the fact that, being away from the city, it is easier to reach the Port.

With Chennai being a major hub for automobiles and Kattupalli port a clean cargo facility, Kattupalli is focusing on leveraging the advantages of location, state-of-art facility and quick turnaround so as to be a single service provider for the automobile industry by handling raw materials like CR and HR coils, plates, automobile components and CBUs. Companies like Toyota, Ford, Nissan and Kobelco are already using Kattupalli for the export and import of auto parts and components in containers.

L&T Ports, Kattupalli can handle all types of automobile CBUs and has a dedicated yard to park cars and other automobile units, highlighted a release.


L&T Ports is a division of L&T Shipbuilding, a joint venture company formed by Larsen & Toubro Ltd and Tamil Nadu Industrial Development Corporation Ltd.

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