SCI eyes exit from container business
State-owned Shipping Corp. of India is rumored to be considering selling off its container shipping division, according to a report this week in Mint.
SCI, India’s largest carrier and the 35th-largest globally, has seen its container activities beset by low demand and poor rates that have eroded profits from other areas of the business like dry bulkers and tankers. The report said the SCI board on Oct. 31 set up a task force to decide how the company should proceed forward, with at least a partial contingent intent on exiting the container shipping business.
SCI operates 11 vessels — five owned and six chartered — and provides services primarily between India and Europe and other parts of Asia. Earlier this year, it suspended a service linking the Indian Subcontinent region to the U.S. East Coast.
Shippers quoted in the report worry, however, that if SCI vacates the container-shipping arena, it would leave a vacuum with higher-priced foreign carriers would fill. Other than feeder operators, there are no other major container lines based in India. The shippers said rates could escalate quickly if other lines active in India pursue the business left behind by SCI.
In the first half of the Indian fiscal year, which runs April through March, SCI’s container business had losses of nearly $37 million. In the previous year, the losses surpassed $40 million, the report said.
SCI eyes exit from container business
