You are on page 1of 27

Internship Report

On
PAKISTAN NATIONAL SHIPPING CORPORATION

VARIOUS DEPARTMENTS

Submitted to:
Capt. S. Hashim Hasnain
[Manager (ISM/TRG) CSO of P.N.S.C.]

Submitted by:
Shariq Khursheed

Date:
28-09-2009
P a g e |1

Acknowledgment

By the Grace of ALLAH, the most Merciful, the most

Beneficial, I am today submitting my internship report, at the end

of my first pragmatic experience and I am glad to have it with

PNSC, where you feel very friendly environment, either you are an

employee, customer or internee. Thirst of learning is inside you,

and whatever the environment, if you're willing to learn, you do.

At PNSC, I had a new, challenging, yet a perfect environment to

learn. My parents' prayers and their teachings were always with

me and hereby I will like to take this opportunity to show my

gratitude to all those who made my internship an adventurous

outwit.

Here I am. I never knew what it all going to be. As I enter

the PNSC workshop at west wharf Road on first floor, it took me a

minute to realize that the person who has very pleasant

personality is the deputy manager of SSD department. A t a

glance, I grasped the interesting personality of the deputy

manager and today at the end of my internship; he is one of the

persons I’ll always remember. Sir whatever I learnt from you is


P a g e |2

always going to be respected, no matter whatever business field I

choose. Those tips are always in my memory bag.

I have no words to gratitude to Mr. Rasheed Ahmed

Siddiqui (Assistant Manager) MIS department for their intellectual

guidance without which it could have been rather difficult for me

to complete this report. I'm really grateful to you sir for clarifying

my concepts and making me learn from your experience.

Whatever I learnt from you will definitely help me in my

upcoming study and the professional life ahead. Thank you so

much for being so co-operative and so helpful every time. I hope

sir I have been up to your expectations.

In the end, I'll like to thank all my other colleagues, Miss

Uzma, Mr. Ghafoor, Mr. Gohar, Mr. Fayyaz & Mr. Minhaj-ur-

Rehman, Deputy Manager SSD Department and all my other

friends and superiors i n PNSC, for their unconditional support

and help in making me learn in a good environment.

(SHARIQ KHURSHEED)
M.Com (Finance)-2009
University of Karachi, Karachi
P a g e |3

LIST OF CONTENTS

No. Contents Page No

1 Executive summary 4

2 PNSC introduction 5

3 Significant development 8

4 Vision/Mission 9

5 Brief history 9

6 SSD department 11

7 Commercial department 12

8 MIS department 21

9 Finance department 22

10 SWOT analysis 23

11 Conclusion 25

12 Bibliography 26
P a g e |4

EXECUTIVE SUMMARY

As we all know very well that time and tide wait for none.

So because this rapid change in time and era we have to cope

with it. During this era I got an opportunity of getting practical

knowledge about the shipping system in Pakistan. So to quench

the thirst of practical exposure and for getting the basic

knowledge about shipping industry I joined PNSC. During four (4)

weeks in PNSC, I gather all necessary information about PNSC.

Efforts have been made to compile this report in such a way

that activates its salient features that will support other trainee in

PNSC in future. I have divided this report into different chapter.

First chapter is about introduction of PNSC. Second chapter

is about the vision & mission. Third chapter comprises of brief

history of PNSC. Fourth chapter relates with the departments of

PNSC. Fifth chapter is concerned with SWOT Analysis, A very

strong analytical & hypothetical tool. Sixth chapter is conclusion.


P a g e |5

P.N.S.C. INTRODUCTION

PNSC is the national flag carrier managing a fleet of 12

vessels. The Corporation's head office is located in Karachi. A

regional office based in Lahore caters for upcountry shipping

requirements. The Corporation also has an extensive overseas

network of agents looking after its world wide shipping business.

Pakistan National Shipping Corporation (the Corporation)

and its subsidiary companies (together 'the Group') were

incorporated under the provision of Pakistan National Shipping

Corporation Ordinance, 1979 and the Companies Ordinance,

1984 respectively.

The group is principally engaged in the business of

shipping, including charter of vessels, transportation of cargo

and other related services. It also engaged in renting out its

properties to the tenants under the long term lease agreements.

Its registered office is situated at PNSC Building Moulvi

Tamizuddin Khan Road, Karachi.

Pakistan National Shipping Corporation "PNSC" is an

autonomous corporation, which functions under the overall


P a g e |6

control of the Ministry of Ports and Shipping, Government of

Pakistan. It manages a fleet of 14 ships, real estate and a repair

workshop.

Pakistan National Shipping Corporation (the Corporation),

its subsidiary companies and an associate (together 'the Group')

were incorporated under the provisions of the Pakistan National

Shipping Ordinance, 1979 and the Companies Ordinance, 1984

respectively. The Group is principally engaged in the business of

shipping, including charter of vessels, transportation of cargo

and other related services. The Group is also engaged in renting

out its properties to tenants under long-term lease agreements.

The Group's registered office is situated in PNSC Building, Moulvi

Tamizuddin Khan Road, Karachi except for Pakistan Co-operative

Ship Stores (Private) Limited which is situated at 70/4, Timber

Pond, N.M Reclamation Kemari, Karachi.


P a g e |7

The PNSC Group consists of subsidiary companies.

SUBSIDIARY COMPANIES

1. Bolan Shipping (Private) Limited

2. Chitral Shipping (Private) Limted

3. Hyderabad Shipping (Private) Limited

4. Islamabad Shipping (Private) Limited

5. Johar Shipping (Private) Limited

6. Kaghan Shipping (Private) Limited

7. Karachi Shipping (Private) Limited

8. Khairpur Shipping (Private) Limited

9. Lahore Shipping (Private) Limited

10. Lalazar Shipping (Private) Limited

11. Makran Shipping (Private) Limited

12. Malakand Shipping (Private) Limited

13. Multan Shipping (Private) Limited

14. Quetta Shipping (Private) Limited

15. Sargodha Shipping (Private) Limited

16. Shalamar Shipping (Private) Limited

17. Sibi Shipping (Private) Limited

18. Swat Shipping (Private) Limited

19. Pakistan Co-operative Ship Stores (Private) Limited


P a g e |8

The Group owns 55 percent of the share capital of Pakistan

Co-operative Ship Stores (Private) Limited and 100 percent of the

share capital of the remaining nineteen subsidiary companies. All

the fully owned subsidiaries of the Group operate one vessel /

tanker each with the exception of Karachi Shipping (Private)

Limited, Lahore Shipping (Private) Limited and Shalamar Shipping

(Private) Limited.

SIGNIFICANT DEVELOPMENTS
DURING THE PERIOD

During the period three vessels, MV Hyderabad, MV

Malakand and MV Sibi and one tanker, MT Lalazar were disposed

off. These ships had reached their useful lives and further

investment to maintain them was not considered worthwhile.


P a g e |9

VISION/MISSION STATEMENT

To develop and execute short-t e r m a n d l o n g -term

business plans to ensure sustainable growth of the Corporation

as the national flag carrier and a lead player in the shipping

industry.

BRIEF HISTORY OF P.N.S.C

In 1947 Pakistan inherited a fleet of four privately owned

cargo ships. In 1963, the National Shipping Ordinance was

promulgated and National Shipping Corporation (NSC) was

established which procured its first used ship, m.v. Rupsa in

1965. The national fleet comprised of some 53 vessels which

were owned by 10 private shipping companies.

The national fleet strength grew to a record 71 vessels just

prior to the separation of East Pakistan and its emergence as

Bangladesh in 1971. The fleet strength declined to 57 vessels

after the separation.


P a g e | 10

In 1974, nine private shipping companies, which had a total

of 26 ships, were nationalized. The national fleet strength

increased to 51 vessels including 26 with the nine nationalized

companies plus 25 ships with the state-owned NSC.

In 1977, 14 ships were inducted in the PSC during the Fifth

Five-Year Plan. Two years later, NSC and PSC were merged to

form the Pakistan National Shipping Corporation (PNSC) which

still remains the sole state-owned shipping corporation. The

total fleet strength increased to 60 ships with the induction of 14

vessels in late 1970s and early 1980s.

Currently, the PNSC manages a total of 12 vessels which

includes 8 Multi-purpose Cargo ships, 3 Aframax Tankers, and 1

Bulk Carrier and the Dead Weigh tonnage is 636,182. Pakistan

Tanker Company, a subsidiary of PNSC also has a single tanker

for crude oil imports.

PNSC enjoyed a complete monopoly till early 1990s when

the shipping sector was deregulated by the then Nawaz Sharif

government.
P a g e | 11

During my internship training I visited the following departments:

1. SSD DEPARTMENT

2. COMMERCIAL DEPARTMENT

3. MIS DEPARTMENT

4. FINANCE DEPARTMENT

1. SSD DEPARTMENT

The function of store and supply department is to store all

types of inventory in shelf through bin card system and requisite

the same inventory to the workshop and on vessel. SSD

department works on four (4) main heads.

1. Stock

2. Workshop

3. Vessels

4. Miscellaneous (provide technical & material support)


P a g e | 12

The department performs all functions involved procurement

through LT (lowest tender) and is charged with the custody and

control of all vessels stores and spare parts placed at store. The

department is responsible for the purchasing function, actually

what is to be purchased and in what quantity. The overall

responsibility of the SSD department is to support the material

needs of the ship. To do this, supply/goods must procure,

receive, inspect, store, issue, and account for general

stores, repair parts, equipage, equipment, ship’s store stock,

clothing, and subsistence items. SSD department divides the

inventory into 23 main groups and in various subgroups. Stock

outflow is taken place into two place, (1) Ship Repaired (issue

stock for the purpose of ship repairing) (2) Ship Supply (issue

stock for the onboard requirement).

2. COMMERCIAL DEPARTMENT

Commercial department is like a backbone of PNSC. A large

amount of revenue is generated by this department. Commercial

department performs worldwide tramping and chartering

operations. It also operates three Aframax tankers on regional


P a g e | 13

routes. The company manages the following fleet of 10 multi

purpose cargo ships, 03 Aframax tankers and one bulk carrier. In

FY06 MV Kaghan, a bulk carrier was added to the fleet making

the fleet size total of 15 vessels.

The total capacity of the PNSC managed vessels has now

increased from 570466 DWT to 636182 DWT. PNSC operates on

two major routes namely trade area west with regular calls at

Karachi, Dubai, Dammam, Abu Dhabi, Kuwait, Bander Abbas,

Genoa, Marseilles, Bremen, Antwerp, Tarragona, Casablanca,

East/West Africa and Brazilian ports and the other route called

trade area west with regular calls at Karachi, Colombo,

Singapore, Xingang, Shanghai, Yokohama, Osaka and Busan.

Commercial department can be divided into three main sub

departments.

2.1 Commercial/ Lines

Function of this department is to oversee the following sub

departments

(A)Trade Area West

(B) Trade Area East


P a g e | 14

(C)Tanker

(D) Chartering

(A) TRADE AREA WEST

Trade Area West encompasses in the following routes.

Regular calls at Karachi , Dubai , Dammam , Abu Dhabi ,

Kuwait , Bander Abbas , Genoa , Marseilles , Bremen , Antwerp,

Tarragona , Casablanca , East/ West Africa and Brazilian ports.

Other ports are also called sub to inducement.

(B) TRADE AREA EAST

Trade Area East encompasses in the following routes.

Regular calls at Karachi, Colombo, Singapore, Xingang ,

Shanghai , Yokohama , Osaka , Busan. Other ports are also

called sub to inducement.

Whenever any cargo imports &/or exports, following

different mode/capacity of container are used.


P a g e | 15

CONTAINER BY TYPE OF CAPACITY

FCL ----- Full container load


To load container at his maximum level/ volume/
weight.

LCL ----- Loose container load

To load container below his maximum level/ volume/


weight.

CONTAINER BY MODES OF SHIPMENT

CY ----- container yard

CFS ----- container freight station

CY/CY Container Service

The CY/CY (read as 'CY to CY') container service---door-

to-door container service or house-to-house container service--

-broadly means that the whole container received by the carrier

is packed at the shipper’s premises, and the delivery of that

same whole container to the consignee's premises.


P a g e | 16

CY/CFS Container Service

The CY/CFS (read as 'CY to CFS') container service (door-

to-port container service). The container is shipped by the

shipper to the consignee in a loose form. Whole container will

open at the terminal and The consignee arranges the delivery of

the loose cargo from the container freight station to his/her

premises.

CFS/CY Container Service

The CFS/CY (read as 'CFS to CY') container service (port-to-

door container service). Shipper has to make an arrangement to

ship the goods to the port and the delivery of the loose cargo

from the container freight station to the consignee's premises.

CFS/CFS Container Service

The CFS/CFS (read as 'CFS to CFS') container service---

port-to-port container service or pier-to-pier container service-

--broadly means that the delivery of the loose cargo to the

carrier's container freight station at the port of origin is packed

into the whole container, and that same whole container is


P a g e | 17

emptied at the carrier's container freight station at the port of

destination. The consignee arranges the delivery of the loose

cargo from the container freight station to his/her premises.

(C) CHARTERING / TRAMPING

Worldwide tramping operations includes (a) Time charter

(b) Voyage charter

(D) TANKER OPERATIONS

PNSC operates three AFRAMAX tankers on regional routes.

2.2 OPERATON

Operation department is also can be divided into three main

departments.

(A) PORT CAPTAIN DEPARTMENT

The primary job of the port captain department is the

stowage of cargo aboard ship, a complicated process explained

earlier (chapter 9). The position of the port captain has been
P a g e | 18

established at ports where large amounts of cargo are handled

in order to expedite the turn-around of vessels in port an to

assist the mates. The port captain at a particular port knows what

is on the dock and committed for stowage, matters that the

mates cannot know until arrival.

To plan the stowage, the port captain should know very well

the information regarding items b o o k e d , t h e i r p o r t s o f

destination, their weight and stowed tonnage, and the type of

stowage required.

(B) CONTAINER LOGISTIC

Key functions of container logistic department are:

Generate revenue and claim no expense towards the


container service.
Lease out the container.
Performs custom department formalities.
Facilitate own department in different location (Hulledge)
Performs stuffing/destuffing.
Slot charter vessels.

Container logistic department transports container worldwide

in different type of technology such as:


P a g e | 19

Bulk Cargo
In bulk cargo whole cargo is loaded openly without any

special arrangement. E.g. Wheat, rice, cotton and fertilizers are

loaded in bulk and openly.

Break Bulk Cargo:


In break bulk cargo technology cargo ships replace bulk

cargos. In cargo ships cargo is loaded in different sections (break

bulk cargo) in bulk. E.g. cargo is loaded in different sections like

cotton bails, industrial raw material and raw iron. All material is

loaded in packing of cartons.

Containerization:
Most recent mode of transportation stared in early 70s

available in different sizes. 20 feet and 40 feet containers are

most widely accepted size. Ship size is measured in TEU and

DWT.

(C) IMPORT & EXPORT DEPARTMENT.

Export unit is responsible for the shipping papers required

for export; in the import unit, for the documents required in

importing. In import & Export some documents are very


P a g e | 20

important, these documents includes t h e b i l l o f l a d i n g ,

permission from custom, SBP, mat receipt & manifest etc.

2.3 BILLS DEPARTMENT:

Bills department procures certification of freight invoices,

arrange for surrender of bills of lading, and facilitate collection &

payment of freight. Freight revenue arises from revenue tons

determined by the weights and measures of cargo and the dock.

The tonnage and rates are entered on bills of lading issued for

the given voyage. The freight cashier is required within a short

period to account for all moneys indicated on the manifest as

collectible from shippers or consignee at his port of the voyage

in question.

One the other hand bills departments concerns with the

accounts payable, trade accounts payable are rather closely

current, that no trade accounts payable ledgers of the usual

types are maintained by the unpaid invoices.


P a g e | 21

3. MIS DEPARTMENT

MIS department o f P N S C a s s i s t o v e r a l l a l l d i f f e r e n t

departments in many aspect. This department provides a bridge

through which all departments interact with each other. It

monitors information system and keep up to date all data base

through online transaction process (inside PNSC) and in some

area with batch processing (outside PNSC such as ship in transit).

Management information system section prepares the Trail

Balance via the posting of journal voucher through coding that

made in computer system by using the SES OFFICE software.

MIS section receives J V f r o m SSD department, Commercial

Department, Finance Department, Tax Department and post it in

specific code, these posting adjust in trail balance automatically

from programming.

Every section has coding system. They post these vouchers by

using these coding systems. Basic SES OFFICE converts it in to

Trial Balance by using these codes in specific heads. MIS

department also runs Score Card. Score Card is very important

software that records each and every thing either relates inside
P a g e | 22

t h e P N S C o r o u t s i d e . I t provides very important updated

information to Executive level officer including directors and

chairman etc in order they can make timely decision. MIS

department also provides the facility of programming.

In addition, MIS department gives technical assistant to all the

departments if they encounter with any system troubleshooting

either hardware problem or software problem.

4. FINANCE DEPARTMENT

Finance department is responsible to manage and allocate the

fund. Find the resources of obtaining fund and makes the best

possible strategy to invest those funds in order to get optimum

return t hat covers your cost of capital and provide future

benefits. It is also responsible for the overall direction and policy

implementation. It is also responsible for coordination of the

Finance Department, which includes budgeting, accounting,

purchasing and treasury functions. The Finance department also

provides financial advice to the top level of management.


P a g e | 23

Accounting section within finance department maintains the

accounting system, the payroll system, the fixed asset system,

reconciles bank accounts, and prepares various financial reports.

The Treasury Section provides centralized cashiering, collection,

collects all receivables, and audits various tax sources for

compliance.

Finance department also prepares Annual Budget. T h e

Purchasing unit procures all services, supplies, and equipment

for all departments of the PNSC, and surpluses items no longer

needed by the PNSC.

SWOT ANALYSIS

S: STRENGHT (relates internal environment)

W: WEAKNESS (relates internal environment)

O: OPPORTUNITY (relates external environment)

T: THREAT (relates external environment)


P a g e | 24

STRENGTH

A large capital investment

Worldwide operation

Skilled labor/employees

Having its own ships/vessels

Both marketing policy (skimming & penetrating)

WEAKNESS

Over staff organization

Lack of coordination between different departments

Lack of proper planning and absence of coordination with

other shipping companies

A bias policy of management towards the selected staff

Low level skill staff.

OPPORTUNITY

Lucrative strategic geographic location

Being a national flag carrier approximately 99% government

base organization hire PNSC services for their shipment


P a g e | 25

THREATS

Limited amounts of import and export due to financial

crunch in Pakistan

High charges as compare to other shipping companies

worldwide

High duty and taxes from the government

Dilapidated vessels.

Conclusion
For as long as one remembers, private sector is not allowed

to play any part in the shipping sector which enjoyed absolute

public sector monopoly. The number of vessels and Dead Weight

Tonnage (DWD) of the PNSC fleet has been on continuous decline

over the years.

Today PNSC fleet comprises just 19 vessels less than one-

fourth its fleet strength two-decades-and half ago. The break

bulk vessels have long past their economic lives. the average age

being over 18 years.

Ships and all floating crafts purchased or bareboat

chartered by a Pakistani entity and flying Pakistani flag will be


P a g e | 26

exempted from payment of income tax till 2020. Instead, they

will be liable to pay tonnage tax at the rate of one US dollar per

gross ton per fiscal year in lieu of income tax irrespective of the

earnings or whether the operator made a profit or incurred a

loss.

Despite enjoying absolute monopoly, PNSC has remained a

financially troubled organization during the big part of its

existence since it was established in 1979 when Pakistan

Shipping Corporation and the National Shipping Corporation

were merged. But since three to four year PNSC has improved

their performance inspite of old technology. For the year ended

June, 30 2008 PNSC Group achieved a turnover of Rs 10,754

million as against Rs 9,089 million last year with healthy growth

in freight earnings, both dry cargo and liquid cargoes. Healthy

Gross Profit of Rs 3,476 million was achieved as against Rs 2,593

million last year.

BIBLIOGRAPHY
www.pnsc.com.pk
www.pakistaneconomist.com/issue1999/issue35/cover.htm
http://books.google.com.pk/books”oceantransport”
www.scribd.com

You might also like