Shipping

National policy for ports, shipping and aviation

Walter LIYNARACHCHI

The development of a state of the art port in Hambantota, work on which has already begun and much headway made, is a step towards the realisation of this vision.

Towards accelerating activities in the realisation of this vision the Minister of Ports, Aviation, Irrigation and Water Management, Chamal Rajapaksa arranged a workshop for all stakeholders in the Ports, Shipping and Aviation sectors last week at the Mahapola Training Institute of the Sri Lanka Ports Authority. Government Policy on Ports, Shipping and Aviation will be drawn up to keep abreast of all technological developments and global changes identifying policy avenues for the realisation of the 'Mahinda Chinthanaya'.

The advantageous location of Sri Lanka for trade, transport and transhipment activities has seen major strides in development spanning over a century of progress. The policy to develop the Port of Colombo in the 17th century to the more recent policy decisions have contributed considerably to the economic progress of Sri Lanka.

Some of the highlights include the shipping policy in the 1970's that created a National Shipping Line to break the monopoly of the cartel of liner shipping, which helped Sri Lanka to export her produce at competitive prices and import goods at reasonable freight rates. It also helped the country to meet challenges of national emergencies with ease.

The policy of developing an international Air Port in Katunayake has kept the country abreast of global progress in aviation activities while the policy of establishing a National Airline has paid rich dividends over the years.

The 1980's saw a policy of development of ports towards taking advantage of Sri Lanka's excellent geographical location, straddling the global shipping routes from East to West; by lending our location for transhipment activities.

In addition to income generation from transhipment activities it created a large inflow of vessels that provided better ship schedules for both imports and exports which in turn attracted investors into Sri Lanka's investment zones because of the advantage of 'just in time' export capability. It also helped export import activities of the country's economy by reducing freight rates and providing more frequent ship schedules. The policy to encourage related activities including ship repairing, ship building has seen vast progress. Other related activities including ship agency companies, ship owning Sri Lankan shipping lines, ship supply associations, freight forwarding activities container depot operations, consolidators, transporters, marine insurers, ship finance ship mortgage entities etc. have also progressed contributing in no small measure to the countries economy. Similar developments are taking place in the Aviation industry especially in Air Cargo activities.

The policy of the government towards encouraging Air Sea related activities such as multimodal Air-Sea, Sea-Air transport is also beginning to attract greater traffic.

Keeping abreast of technological advances, market trends, trade patterns and global changes is a necessity in port, shipping and aviation. Large investments need to be prudently made for success in an increasingly competitive world.

Prudent policy alternatives need to be assessed to make progress as well as to be fortified to tide over periods of global downturn.

The Minister of Ports and Aviation has in recognition of this need requested the stakeholders to meet at a workshop arranged by the Ministry of Ports and Aviation towards exchanging views and updating policy on ports, shipping and aviation to meet the challenges of the 21st century effectively and profitably.

Colombo South port to be best cargo handling hub

Walter LIYANARACHCHI

In line with the Government's policy to develop ports in Sri Lanka the Ports Ministry has given priority to construct the Oluvil Port and enhance the services in the Colombo Port.

Developing the Colombo South harbour is one of the prioritised projects of the Sri Lanka Ports Authority.

The Asian Development Bank has pledged to release a loan amounting to US $ 35 million to proceed with the project.

With the completion of construction work in 2010 it would be positioned as the best transshipment cargo handling hub in the region.

It has been projected to build four terminals extending 1200 metres in each to accommodate three berths of 18 metres and provision to deepen to 23 metres.

Due to the extensive depth of the sea large vessels could reach the Port and with expansion, more vessels could be expected which in turn world bring more foreign exchange, a port official said.

NOL revenue falls steeply

Volume for Singapore's government-owned box operator Neptune Orient Lines continues to fall steeply.

For the six weeks from December 27 to February 6 (the first period of the 2009 fiscal year), the number of boxes shipped plunged to 188,400 feu, a 35% drop from the 289,400 feu for the corresponding period of 2008, the group said yesterday.

Reflecting the accompanying decline in freight rates, average revenues fell 11% to $2,646 per feu.

NOL's liner arm APL has slashed capacity and has announced rate increases for the Asia/Europe trades, effective March 15 and April 1.

Recently NOL had predicted losses despite squeezing net profits of $83M for the year 2008. It also said conditions similar to those in the fourth quarter of 2008 are expected to continue through 2009.

"The impact of the macro-economic environment is reflected in the fourth quarter operating results, Cheng Wai Keung Chairman said, referring to the turbulent global economic conditions.

Maritime labour convention, a boon to shipping sector

Shipping has benefited more than almost any other sector in recent years from globalization. "But this has also made it more vulnerable to the global economic crisis.

Freight and charter rates have plunged, jobs at shipping companies are being cut and many ships are being parked for months at a time. In this situation, it is important to have an international regulatory regime for quality shipping," Director of the ILO's International Labour Standards Department, Cleopatra Doumbia-Henry, said.

From the start the ILO and its government, employer and worker constituents realized that in the world of work the situation of seafarers and ship owners - representing one of the first globalized sectors - was special. Already in 1920, the International Labour Conference agenda featured items such as hours of work and employment conditions for seafarers, prohibitions on the employment of children under 14 on board ship, and the possible drawing up of an international seamen's code she said.

The ILO has adopted more than 70 Conventions and Recommendations to ensure decent working and living conditions for seafarers while at sea and in port.

The MLC, 2006, is a "one stop shop" Convention, that brings together and modernizes the majority of these legal instruments. It was specifically designed to help achieve a "level playing-field" for quality ship owners and at the same time help ensure worldwide protection for the world's more than 1.2 million seafarers. It covers the minimum requirements for seafarers to work on a ship, conditions of employment, hours of work and rest, wages, leave, repatriation, accommodation, recreational facilities, food and catering, occupational safety and health protection, medical care, welfare and social security protection.

The Convention also establishes a strong compliance and enforcement mechanism based on flag State inspection and certification of seafarers' working and living conditions. This is supported by port State inspection of ships to ensure ongoing compliance between inspections. The five-year ILO action plan to achieve the MLC's entry into force by 2011 took a major step forward last September with the adoption of guidelines for flag State inspections and for port State control officers carrying out inspections under the MLC, 2006.

These guidelines provide "how to" practical assistance for ratifying countries and will help them implement their obligations under the Convention. The MLC, 2006, encourages inspections for compliance with its requirements on all foreign ships visiting a ratifying country's ports, even ships from countries that have not ratified the Convention.

However, in line with other major shipping Conventions, if a ship flies the flag of a country that has ratified the MLC, 2006, and produces the required certification issued by the flag State, the port State official

must accept these documents as evidence of compliance. There are exceptions, for example when an inspector has clear grounds for believing that a ship is non-compliant or receives a complaint by a seafarer. The growing numbers of ship detentions in many ports worldwide shows the continuous need for such a global system of regular port inspections. In the European Union for example, the number of detentions of ships (for a wide range of issues including environmental, ship safety and security and labour standards) has risen for the second year running; from 944 in 2005 to 1,174 in 2006 and 1,250 in 2007.

While the adoption of the Guidelines for port State control officers and flag State inspections was considered a major step towards quality shipping and decent work on the seas, new ratifications of the MLC, 2006, by ILO member States have brought the Convention's entry into force within reach. To enter into force the Convention requires ratification by at least 30 ILO member States with a total share in the world gross tonnage of ships of at least 33 per cent. To date, the Convention has been ratified by Liberia, the Republic of Marshall Islands, the Bahamas, Norway and Panama. Panama, the largest flag State in the world, with nearly 25 per cent of the world's merchant fleet flying its flag, was the fourth major shipping country in the world to ratify. With Panama's ratification on 6 February 2009, one of the two conditions for the MLC, 2006, to enter into force was fulfilled, that of tonnage.