Global Shipping lines make a beeline to reflag their ships in India

COPENHAGEN : International shipping majors are making a beeline to register their ships under the Indian Flag. Denmark shipping major A.P. Moller – Maersk (Maersk) is the latest with two of its ships – Maersk Vilnius and Maersk Vigo – having been re-flagged under the Indian flag in the last two weeks, said sources.

International shipping majors are making a beeline to register their ships under the Indian Flag.

Denmark shipping major A.P. Moller – Maersk (Maersk) is the latest with two of its ships – Maersk Vilnius and Maersk Vigo – having been re-flagged under the Indian flag in the last two weeks, said sources.

Since then, CMA CGM had registered two more ships and the fourth will be done next week.

It is learnt that Switzerland’s MSC also plans to re-flag its ships under the Indian Flag and this will be known next week at the India Maritime Week to be held in Mumbai, sources in DG Shipping said.

Sources in DG Shipping said that Maersk has opened an office – Maersk Bharat IFC Pvt Ltd – in Gujarat International Finance Tec-City for re-flagging the ships.

The reflagging of Maersk’s ships comes after the company celebrated the name-giving of its newest dual-fuel methanol container vessel in Mumbai in February as a part of the vessel’s maiden voyage to India. The vessel, named Albert Maersk, is the eleventh vessel in Maersk’s fleet capable of operating on methanol.

By reflagging, ships are added to the Indian fleet. This ensures that Indian cargo is carried in Indian flag ships, which are available to overcome disruptions, in times of crises, and have uninterrupted supply chains. Freight revenue stays within the country instead of paying foreign shipping lines.

There are also economic benefits for Indian ship management companies that hire crew to work on board, and on port charges and and ancillary services. More jobs will be available for Indian seafarers on Indian flag ships, said sources.

Further, Indian flagged ships get priority to carry government cargo. “We expect more ships to be reflagged in future,” said sources.

Capt MM Saggi, Former Nautical Advisor to the Government of India, told businessline that the need to have more ships under Indian flag would save foreign exchange, reduce exploitation by foreign flags, rationalise freight rates for our EXIM trade, lower logistics and transaction cost, improve export competitiveness and enhance global maritime influence.

The current Indian tonnage share for carriage of our EXIM trade is only about 7 per cent. 93 percent of our trade is carried by foreign ships. Initial target can be to have adequate tonnage to carry 40 per cent of EXIM cargo. This could earn an estimated $20 billion in freight for Indian ships, as compared to the present earning estimated at about $3.5 billion. Augmented freight earnings and forex savings could be about $16.5 billion annually, if this is realised, he said.

Raising cargo share from 7 per cent to 40 per cent could create a nearly six-fold increase in employment opportunities both onboard, ashore and in creating ancillary services in India, he added.