19 Mar 2007

A proposal aimed at further bolstering US port security was rejected last week by the US Senate following firm resistance from the shipping industry, Republicans and several Democrats.

The changes to the 9/11 Commission Implementation Bill were defeated 58 to 38 votes following concentrated lobbying by shipping industry and manufacturing bodies.

If passed, the changes could impact on the movement of containers worldwide and intense opposition to the proposals was very evident. Prior to the debate, the National Association of Manufacturers had said in a letter to Senators, "Requiring 100 per cent scanning of more than 11 million containers annually may be well-intentioned, but it is not feasible given the current technology."

A report by US-based Port World magazine pointed out that the Senators' proposed amendment was a replica of the 100 per cent inspection clause already ratified in the US House of Representatives version of the 9/11 bill.

The House bill would have extended the 100 per cent container inspection requirement to all foreign ports in five years.

Unnamed shipping sources quoted in the report expressed relief at the outcome of the vote, but added that political wrangles may well ensue. The issue is postponed at the moment and certainly not dead.

Before a final bill is signed by the US President into law, both the House and Senate bills have to be passed, and it will then be down to a conference committee to produce a melded version of the two.

Pakistani legislation

Pakistan's protectionist vessel regulations, in force since 1982, have been criticised with calls for relaxation to keep pace with the changing demands of international trade. The current laws give priority to domestic shipping lines to carry and export goods overseas.

Under existing Pakistani legislation, foreign flag vessels must apply for a waiver, or a no-objection certificate from the country's Department of Shipping before the owners of foreign ships can be allowed to load goods at Pakistan's ports for export, provided no domestic carrier is able to do the job.

The situation is now said to be creating tension between local and foreign ship-owners by hindering port operations, creating delays and leading to cargo congestion at the nation's ports.

Furthermore, critics of the system are claiming that ships belonging to domestic carriers are unsuited to making long journeys at sea, particularly in bad weather and they lack sufficient capacity.

The vessels are also said to be poorly maintained, ill-equipped and unable to maintain expected arrivals and departures at ports.

Amirul Haque, chairman of the standing committee on ports and shipping of the FBCCI and CCCI (Chittagong Chamber of Commerce and Industry) said, "This type of system is very old and against the spirit of free market economy."

Clarkson operates from Egypt

Clarkson PLC, the prominent UK-based shipping service provider, has commenced operations from Egypt in a dual chartering and agency joint-venture with the Bayoumi family, which also owns Albaharia Shipping Co.

The two companies that commenced business from March 1 consist of Clarkson Shipping Agency (Egypt), which will specialise in providing ship agency services in all Egyptian ports and Suez Canal transit, and Clarkson Shipping Egypt, which will concentrate on developing other shipping services including chartering. It will operate from offices in Alexandria, Port Said, Port Suez, Damietta and Safaga.

Commenting on the new venture, Clarksons chief executive Richard Fulford Smith said he was feeling bullish about the future, in particular, prospects for the Suez Canal with the rapid expansion of LNG market in the east. He added Clarksons welcomed the opportunity to work with an established and respected Egyptian agency.

INSA urges tax reform

The Indian National Shipowners Association (INSA) is urging sweeping proposals designed to restructure taxes for the shipping sector in a bid to generate big investment and improve competitiveness.

In a statement the association said it has called for a five per cent reduction in customs duty on the import of vessels and for ship operators to be exempted from paying customs duty on the import of repair materials. This, they say, will reduce the high costs of repair work and also boost the import of high-quality repair equipment.

The writer is a marine consultant based in Dubai.

By Frank Kennedy

Gulf News 2007. All rights reserved.