INDIAN NATIONAL SHIPOWNERS’ ASSOCIATION

29-04-20

To,

Shri Rahul Modi,

Coastal Container Transporters Association

Dear Mr. Rahul Modi,

For the past more than 10 years the Indian ship owners have been providing services of transportation of domestic cargo in containers. The service continued despite the steps taken by the Ministry of Shipping to permit foreign ?ag ships to carry Export Import laden and empty containers as well as domestic cargo. Our members suffered loss of market revenue, but continued to carry on these services.

2020 began with the switchover to low sulphur fuel which itself was costlier than the traditional fuel being used by ships. While foreign container ships imposed surcharges and increased freights due to LSFO, our members continued to provide services at minimum or no increase in freight. Our members have also been providing trade credit to its customers for periods negotiated privately. All in all, the users of the coastal trade have continued to enjoy the economic bene?ts of the services provided by our members.

However, in the past more than 30 days the pandemic has completely disrupted the cycle of services being offered, impacted revenues immensely while costs have continued unabated. While road and rail services were stopped our members have continued to operate their ships and provide transportation services to trade. However, volumes have been a shadow of the normal and capacity utilisation has fallen considerably. All of the loss of business accompanied with the need to continue to run efficient ships have put considerable strain on the working capital requirements of our members.

INSA is in discussion with the Government of India to try and provide some kind of financial assistance to those operators who are providing these services. In the meanwhile, it has become necessary for our members to consider ways and means to tide over the current situation that is being faced by them.

In view of the above, our members wish to request all users of the services of coastal transport as follows:

1. All outstanding freight due to the shipping company may kindly be settled within the agreed credit period. It will not be possible to provide any extended credit on such bills.

2. With effect from the date of this letter, all users of shipping services are requested to kindly pay freight for services, immediately after the completion of the services of transporting the cargo to the port of discharge, but before taking delivery of the cargo at the port of discharge.

Our members are encouraged by the fact that your association has taken the lead to make a similar request to its own clients, a step which is very welcome. Further, we ?nd that other trade associations in the maritime industry such as AMTOI, FFFAI and others too have taken similar steps. We are certain that these measures, albeit temporary, will assist our members as well as yours, in being able to sustain and continue to provide effective and robust services to the trade and your members in the long term. Our members seek your co-operation and understanding in the matter.

Regards,

Anil Devli

Indian National Shipowners’ Association