Introduction: Pestel Analysis

Page |1 PESTEL Analysis of shipping industry
INTRODUCTION: PESTEL Analysis

There are many factors in the macro-environment that will affect the decisions of the managers of any organisation. Tax changes, new laws, trade barriers, demographic change and government policy changes are all examples of macro change. To help analyse these factors managers can categorize them using the PESTEL model.
B.R.C.M College Of Business Administration | 1
This classification distinguishes between:
Political factors These refer to government policy such as the degree of intervention in the economy. What goods and services does a government want to provide? To what extent does it believe in subsidizing firms? What are its priorities in terms of business support? Political decisions can impact on many vital areas for business such as the education of the workforce, the health of the nation and the quality of the infrastructure of the economy such as the road and rail system.
Economic factors These include interest rates, taxation changes, economic growth, inflation and exchange rates. As you will see throughout the "Foundations of Economics" book economic change can have a major impact on a firm's behaviour. For example:
Higher interest rates may deter investment because it costs more to borrow
A strong currency may make exporting more difficult because it may raise the price in terms of foreign currency

o
Inflation may provoke higher wage demands from employees and raise costs
Higher national income growth may boost demand for a firm's products
Social factors. Changes in social trends can impact on the demand for a firm's products and the availability and willingness of individuals to work. In the UK, for example, the population has been ageing. This has increased the costs for firms who are committed to pension payments for their employees because their staff are living longer. It also means some firms such as Asda have started to recruit older employees to tap into this growing labour pool. The ageing population also has impact on demand: for example, demand for sheltered accommodation and medicines has increased whereas demand for toys is falling.
Technological factors New technologies create new products and new processes. MP3 players, computer games, online gambling and high
definition TVs are all new markets created by technological advances. Online shopping, bar coding and computer aided design are all improvements to the way we do business as a result of better technology. Technology can reduce costs, improve quality and lead to innovation. These developments can benefit consumers as well as the organizations providing the products.
Environmental factors
Environmental factors include the weather and climate change. Changes in temperature can impact on many industries including farming, tourism and insurance. With major climate changes occurring due to global warming and with greater environmental awareness this external factor is becoming a significant issue for firms to consider. The growing desire to protect the environment is having an impact on many industries such as the travel and transportation industries (for example, more taxes being placed on air travel and the success of hybrid cars) and the general move towards more
environmentally friendly products and processes is affecting demand patterns and creating business opportunities.
Legal factors
These are related to the legal environment in which firms operate. In recent years in the UK there have been many significant legal changes that have affected firms' behaviour. The introduction of age discrimination and disability discrimination legislation, an increase in the minimum wage and greater requirements for firms to recycle are examples of relatively recent laws that affect an organisation's actions. Legal changes can affect a firm's costs (e.g. if new systems and procedures have to be developed) and demand (e.g. if the law affects the likelihood of customers buying the good or using the service).
Typical PESTEL factors to consider include: Factor Political Could include: e.g. EU enlargement, the euro, international trade, taxation policy Economic e.g. interest rates, exchange rates, national income, inflation, unemployment, Stock Market Social e.g. ageing population, attitudes to work, income distribution Technological e.g. innovation, new product development, rate of technological obsolescence Environmental e.g. global warming, environmental issues Legal e.g. competition law, health and safety, employment law
By using the PESTEL framework we can analyse the many different factors in a firm's macro environment.
INDIAN SHIPPING INDUSTRY

India has the largest merchant shipping fleet among the developing countries and ranks 15th amongst the countries with the largest cargo carrying fleet with 8.96 million GT till Dec 2008 and the average of the fleet being approximately 23 years. More than 90% by volume of the Indian registered fleet is used for overseas trade, with Bulk Carriers and Tankers making up the majority of the fleet by volume. On account of increasing offshore oil E&P operations, the offshore supply vessel fleet has grown in India. AHT (Anchor Handling Tug), AHTS (Anchor Handling Tug Supply), PSV (Platform Supply Vessel) and MSV (Multipurpose Supply Vessel) constitute nearly 90% of the 190+ supply vessels servicing the Indian offshore rigs. Of these, nearly 3/4th numbers of vessels are foreign registered. Some Indian owned fleets also service rigs in foreign fields, like in the North Sea. There are currently more than 4770 container ships in the world fleet with more than a 1000 new ships on order. Container freights, which had reduced even prior to the recession, are showing no sign of recovery. The fleet is young with more than 85% of the fleet by volume younger than 15 years.
Political environment
Indian shipping industry has over the years played a crucial role in the transport sector of India's economy. Approximately 95% of the country's trade by volume and 70% by value is moved through maritime transport. India is among the 20 leading merchant fleets all over the world. The country has 12 major ports and 200 minor ports. The twelve major ports are Kolkata (including dock complex at Haldia), Paradip, Visakhapatnam, Chennai, Ennore and Tuticorin on the east coast and Cochin, New Mangalore, Mormugao, Jawaharlal Nehru at Nhava, Mumbai and Kandla on the west coast. Following are some of the programmes undertaken by Government of India:
National Maritime Development Programme

National Maritime Development Programme has been formulated keeping in view the future traffic projections. The objective of the Programme is to bring up the levels of performance in the maritime sector to international benchmarks. Out of the total 387 schemes/ projects in major ports, shipping and IWT sector which have been identified under the Programme. The total investment envisaged in the programme is Rs.100,339 crores out of which Rs.55,804 crores is for
P a g e | 10 PESTEL Analysis of shipping industry
Major Ports and Rs.44,535 crores is for Shipping and IWT sectors. In the Port sector, a total of 276 projects have been identified under the programme for implementation by 2011-12. Out of these about Rs.34,505 crores is expected from private sector, Rs.3,609 crores is expected to be provided through budgetary support and Rs.13,772 crores is proposed to be financed through internal resources of the Major Ports and the balance from other sources. The objective is to upgrade and modernize the Port infrastructure in India and benchmark its performance against global standards. In the Shipping sector, a total of 111 projects involving total investment of Rs.44,535 crores over a period of 20 years have been identified for inclusion in the Programme. Out of this, Rs.13,775 crores are expected to be through budgetary support,Rs.17,460 crores through internal and extra budgetary resources and Rs.13,300 crores through private investment. The activities covered under the Programme include tonnage acquisition, maritime training, coastal shipping, aids to navigation, shipbuilding and building up of IWT infrastructure.
Recent Initiatives
Mode Concession Agreement (MCA) The Government has finalized a Model Concession Agreement (MCA) to ensure uniformity in the contractual agreements to be entered by the major ports with the selected bidders for the BOT projects to be developed through PPP mode. It will also enable the prospective bidders to have prior knowledge of the contractual obligations of both parties and, therefore, ensure transparency. New Tariff Guideline For fixing tariffs, the Department of Shipping has formulated new tariff guidelines, Tariff Authority for Major Ports (TAMP) an autonomous body under the Department of Shipping, shall now follow a normative cost based approach for fixing tariffs. These tariffs will act as a ceiling and will be indexed to inflation and the private operators are free to charge below these ceilings. Rail Road Connectivity of Major Ports The committee on infrastructure (CoI) headed by the Prime Minister has set up a committee of secretaries (CoS) under the Chairmanship of Member Secretary (Planning Commission) to review the rail road
connectivity of major ports which recommended that each major port should preferably have a minimum of a four-lane road and double line rail connectivity and these should be established within a fixed time frame. Ennore Port Ltd. (EPL) Ennore Port Ltd. (EPL) has also signed concession agreement with selected bidders for development of an eight million tonnes per annum (MTPA) iron ore terminal on BOT basis.The Government has approved the project for undertaking capital dredging phase-I by EPL at an expenditure of US $ 18.41 million. EPL will bear the entire expenditure for this capital dredging project for providing a depth of (-) 15 metre below CD for the new marine liquid, iron ore and coal terminals being developed on BOT basis. The physical progress upto the month of November 2008 was 80 per cent. Foreign Direct Investment (FDI) Policy Foreign direct investment upto 100 per cent under the automatic route is permitted for construction and maintenance of ports and harbours.
Cruise Shipping Policy-2008

Objectives To develop India as Destination as well as Source Market with state of art infrastructure and appropriate marketing strategy To increase the number of cruise ship calls and passenger arrivals in a sustainable manner To achieve a target of at least 10 lakh cruise passengers landings per year by 2010. To strengthen inter-sectoral linkages, whereby cruise liners source the requisite supplies of goods and services from local Indian suppliers To consolidate existing ports of call, explore other ports and suitable anchoring sites on the Indian coast with a view to making additional cruise ship calls to other areas of the country. To operationalise appropriate promotional programmes that would effectively convert cruise passengers to long stay visitors. To maximize the benefits from the cruise industry consistent with protection of environment. To ensure that the cruise shipping industry in India becomes internationally competitive with other destinations and contributes to the economy in terms of generation of foreign exchange, income, employment and business opportunities.
To attract the right segment of foreign tourists to cruise shipping in India To popularize cruise shipping with Indian tourists. To enhance absorptive capacity of the country by developing existing and new visitor attractions, including event attractions in line with Indias efforts to improve the tourism product. In order to realize these objectives various programmes, amendments in duty and taxation, promotional campaign are being undertaken.
Economic environment of shipping industry in India

Indian shipping industry has emerged out of a prolonged phase of slackness; the Indian shipping industry is poised to resume the growth path. The revival in fortunes has happened largely on the back of dramatically improved freight rates, which in the last one year has gone up by over 50 per cent in the tankers segment. The shipping industry is cyclical and its fortunes are linked directly to the level of activity in trade - global or domestic and the shipping tonnage. More than 90 per cent of India's external trade is by sea and the major products include crude oil, petroleum products, iron ore and food grains. There have also been changes in the Indian production pattern of oil and petroleum products - one of the major clients of shipping companies which has turned around the industry position. The sharp rise in oil refining capacity in India has lowered the demand for product tankers bringing petroleum products. This would be made up by demand for crude tankers to cater to the increased refining capacity. India imports about 70 per cent of its requirement of
petroleum crude. Shipping companies are also poised to reap the benefits of the growing demand for natural gas. Already, the demand for gas is far outstripping supply and the government is considering the option of allowing transport and import of liquefied natural gas (LNG). LNG is a very lucrative business and India is expected to become a major importer of LNG over the next few years. Also, LNG terminals are being set up in places like Kochi, Dabhol and Pipavav. The tankers segment has seen players concentrate on acquiring specialized vessels for carriage of specific products such as edible oils and acids. In fact, Shipping Corporation of India (SCI), which turned out a sterling performance in 2000-01, owes its showing in part to the performance of this segment. Besides, the huge addition to refining capacity with Reliance's Jamnagar refinery operating and expansion of the public sector refineries is likely to require significant movement of tankers.
Impact of inflation
Inflation and a weaker dollar have negative impact on costs for all shipping companies but some companies will face special challengers those adapted the business model of producing steady yields for their investors by investing in assets against long-term time charter commitments.
Management cost is generally assumed to be growing at 4% to 5% per annum but under the current very inflationary environment one really needs to scrutinize the traditional assumptions for each and every cost item making up the budget of a typical ship manager to see if they are realistic: Crewing costs this is the biggest item in the ship management costs. A leading Ship manager agrees that this cost has been increasing for over 10% for the past 3 years and it is expected to get worse when large numbers of new buildings are going to be delivered. Other cost such as repairs, dry docking costs etc. are increasing due to overall increase in inflation. This has resulted into increase in prices being charged for the services. Cost for steel/marine equipment/wages are increasing all across the board, which of course eats into margins.
SOCIAL environment analysis

Pressure for international action to combat climate change is building. Following the United Nations Conference of Parties on Climate Change (COP 15) held in Copenhagen in December 2009, the world has been awakened to the grim prospect of a warmer world which could wreak havoc on weather and atmosphere. If no concrete and sustainable measures are taken to address this issue, climate change could lead to adverse effects to the world and untold misery to human beings.
The issue of global warming and climate change has become a topic that requires urgent attention by the international community. Visible impacts of the phenomenon demand that concrete actions are taken to mitigate its risks. Everyone must make the issue of reducing carbon emission as a priority and must aim to put in place preventive measures to reduce carbon footprint. This applies to the shipping industry as well. One way or another, industry players must prepare themselves for a lower carbon future. That future could be here sooner than they think. Despite shipping contributing a mere 3.3 percent of the global total of carbon emissions (Lloyds List, December 2009), carbon emissions from
shipping are estimated to have doubled since 1990. It is projected that carbon emissions from shipping will grow by a factor of two to three by 2050 from 2007 levels if no regulatory measures are taken to lower the emissions.
The shipping industry, a key generator of global trade and economic activities, must also stand up and be counted to play its role to reduce its carbon footprint. The shipping industry is already in the midst of structural changes influenced by various global trends. In addition to these, concerns over carbon emission have reshaped the way industry players operate, think and plan. Meaningful efforts have been undertaken to lower shippings carbon footprint, but much more needs to be done for industry players to adjust to a low-carbon environment and be accountable for their carbon emissions.
In the face of this, it is crucial that studies are undertaken to make shipping more energy-efficient and cleaner. The International Maritime Organization (IMO) Greenhouse Gas Study updated in 2009 reported that the application of known technology and practices could make vessels more efficient between 25 percent to 75 percent, depending on vessel type. However, adopting such technology and practices may open a Pandora Box of other issues. In the event that shipowners pass
the costs incurred from going green onto their customers, the latter will in turn pass their costs down to end users and consumers of the cargo.
It can be debated that given the considerable costs involved in practicing green shipping, there may not be much of an incentive for shipowners to increase efficiency of their ships to a level that will make a difference on a global scale. Unless they can gain competitive advantage by going green, it is hard to imagine that shipowners are going to gladly start a voluntary technological revolution to change the entire shipping industry to a greener one. What more at a time when many of them are reeling from the crushing impact of global recession, credit crunch and falling demand for shipping services.
IMO would do well to set realistic and implement able emission measures and rally maritime nations to set national emission targets. The challenge is to get nations started with voluntary targets while working towards coming up with a set of mandatory regulations. This might take a while to come to fruition but the IMO and shipping industry stakeholders must work on low hanging fruits and quickly work on relatively easily attainable targets such as working on emission goals and implement able measures on an independent basis.
On the basis of following changes in the world arena one must be sure that variety of changes may be in form of law or other pressures are going to hit shipping industry. As an analyst one must be ready for these changes and more important strategies should be developed so as to convert these threats into opportunities. Social environmental analysis and international environment analysis has been clubbed together because both were concerned with similar issues.
Technological changes
There are few important intermediaries in shipping industries which have been affected by technological development. One broad aspect that has been important impact on various intermediaries and that seems to be information and internet development. E-commerce and especially B2B e-commerce has involved in the last decade which have changed to great extent the working of these intermediaries. Following research findings have been mentioned below to show the impact of technology in recent times.
The Japan Maritime Research Institute recently conducted a general inquiry on the development of information system. About 20 liner companies responded to the inquiry. The result showed that 23% of the companies had built up the central information-process system, 31% had built up regional information system, and the remaining 46% had both the two systems. 85% companies provided booking and inquiring service via Internet. 31% had yield management system; other companies were developing such systems. So information technology has become a key measure for shipping companies to cut management cost, improve service quality, and get competitive edge.
Effect of technological development on ship owners:

The owners side considers that technology has made an important contribution to communications within the industry. With the introduction of new technological developments communications have become a lot easier, much faster and perhaps less costly. From the perspective of the ship owners the most important technological development up to the present time has been the mobile phone because it allows the owner to reach and contact people anywhere at any time. One can get hold of anybody, anywhere and at any time. Especially get hold of the broker [any broker] all the time.
The ship owners did not perceive the effect of the Internet on business relationships any differently to the effect of previous technological developments such as the mobile phone. Internet technology seems to be largely conceived as an additional means of communication with an extra function of providing the ability to trace more information that is very cheap. The ship owners had faced serious difficulties in shipping insurance broking could be conducted through an on-line platform. The main reason that they stressed was the risk if a vessel was not correctly insured, which could lead to financial disaster. On-line platforms were
perceived as too impersonal for an owner to have confidence that no problems would occur and furthermore there are still serious problems with respect to the trustworthiness of the Internet as a means for conducting business overall.
Effect of technological development on brokers:

The brokers described technological developments as wonderful tools that have assisted them in doing their job. Their contribution to the industry cannot be contested, as they have enabled faster communications. The brokers consider the most important
technological development to be the Internet mainly because of the substantial amount of free information that it has made available to them. The main contribution of the Internet is the provision of a vast deal of information, which has allowed brokers to provide a better quality job. Through this information a chartering broker is allowed to have more up to-date information about the market background and its current position. Given, however, that the amount of information provided is very great some broker believes that there is a general call for research, i.e. for someone to collect all the information, filter it and provide the principals with the most relevant and important information.
On the contrary some brokers feel that the Internet has significantly increased the number of tasks they have to do at any one time. For instance, a telephone conversation needs to be backed up by a fax and, in recent times, by e-mail as well. Furthermore, the information load has increased and any information received needs to be scanned before it is discarded.
E-commerce has had an effect on business-to-business relationships between a ship owner, a chartering broker and a shipping insurance broker respectively. Internet technology is recognized as an additional enabling means of communication and as a valuable source of information that can allow a broker to provide a more efficient service. The better the service provided becomes, the closer the relationship. If parties are satisfied they engage in repeated business, repeated business means increased interaction and increased interaction brings the two parties closer together. As an enabler of informational and communicational improvements Internet applications have a positive effect on business relationships between a ship owner and the two kinds of brokers. Hence, managers need to recognize the benefits of using technology as a tool.
Internet technology in itself may not be able to function as an intermediary in shipping because it is lacking the direct human element that ship owners require. It has, however, additional values to offer. It offers speed and it offers more information. These values need to be recognized by the brokers and Internet applications will have to be incorporated into the traditional role of the broker. Therefore, it appears as if in the shipping industry the application of Internet technology is going to be realized in improved ways of performing old functions rather than in the creation of totally new products that have totally new values and which threaten previous technologies, products and service providers.
Environmental factors analysis:

Shipping, considered one of the most carbon friendly modes of transport, is now a growing threat in the battle against climate change.
A new report, published by the Tyndall Centre for Climate Change Research, suggests the global shipping industrys carbon emissions could account for almost all of the worlds emissions by 2050 if current rates of growth continue.
This would put the UKs target of an 80 per cent reduction in greenhouse gases by 2050, and other nations targets, at risk.
Dr Paul Gilbert, Lecturer in Climate Change at the University of Manchester, said: In terms of tones kilometers shipped, *shipping+ is the most efficient mode of transport, however the sector is predicted to grow by up to 150-250 per cent this will not be compatible with already high levels of climate change.
John Aitken, Secretary General of Shipping Emissions Abatement and Trading, (SEAT) said: Looking a current prediction if other industrial sectors continue to reduce emissions and shipping doesn't then the
shipping proportion of green house gasses will steadily increase. I have seen a graph that says it could be 20% 2050. This is not a situation that would be tolerated for long.
Currently shipping accounts for 2.7 per cent of global greenhouse emissions. If it was a nation, Aitken explains, shipping would lie behind Japan but ahead of Germany.
To avoid dangerous climate change, which is associated with a 2C temperature rise, the report stresses the urgent need for the shipping industry to start process of decarbonisation.
The International Maritime Organisation (IMO) is currently looking at an international deal to control shipping emissions, but experts warn decisions are slow.
Aitken explains the need for a trading scheme that applies to all ships with globally agreed emissions reductions targets. He told The Ecologist: This can be quite realistically brought about. It is only politics that is holding it back.'
Dr Gilbert warned: It will require a lot of behavioural change within the sector to reduce emissions A detailed discussion of this matter has already been provided in social analysis.
LEGAL ENVIRONMENT ANALYSIS

Shipping is a highly regulated industry due to its importance in a nations economy and also due to its impact on the environment, The International Maritime Organization (IMO) issues shipping regulations. These regulations are implemented by individual flag states on their ships. In India, IMO regulations are implemented by the Indian Register of Shipping (IRS). The IMO issues regulations concerning all aspects of shipping like vessel specifications, sea-farer safety, etc. Past IMO regulations have affected shipping in terms of operations, retrofits, new build costs, training, equipment, etc. Among all of them, the recently introduced single-hull phase-out regime is causing large-scale fleet renewal and
replacements, which ultimately affects the market. In India coastal shipping comes under the purview of the Directorate General of Shipping (DG Shipping). It frames and implements the policies regarding coastal shipping as well as the construction specifications of coastal vessels, cabotage laws, taxation, etc. Cabotage law in most countries reserves the movement of coastal trade to their own flag vessels. Policy measures involve crewing restrictions, ownership restrictions, provision for domestic fleet subsidy, reflagging
restrictions, etc. In India, the Merchant Shipping Act bars foreign bottoms from carrying cargo between Indian ports; exceptions are made if no suitable Indian vessel is available. The market of shipping industry being highly volatile, such protection creates a certain degree of stability for the Indian bottoms. Action plan for the development of coastal shipping is already on the anvil with the Central Government. With a view to promote coastal shipping and sailing vessel industry, the home trade vessels and sailing vessels have been exempted from the payment of lighthouse dues under the provisions of the Lighthouse Act, 1927.
CONTROL OF INDIAN SHIPS - STATUTORY AND EXECUTIVE ORDERS

With its vast coastline of over 5560 kms. 11 major ports and several intermediate and minor ports, shipping occupies an important position in the country's trade and commerce. The Second World War demonstrated in unmistakable terms the need for harnessing the transport resources of a country to meet the situation created by a war. It was, therefore, necessary to have some control over Indian ships.
1. The basic objectives of India's shipping policy since independence have been: i. To reduce the dependence of external sea borne trade on foreign shipping services; ii. To safeguard the imports of essential supplies especially POL, for the national economy; iii. iv. To reserve 100% coastal trade for national flag vessels; To ensure adequate provision of shipping services to meet the requirements of the national trade; v. To improve the balance of payments position through import substitution and export of shipping services; and vi. To develop merchant fleet, to act as a second line of defense to protect India's maritime interest and preserve its channels of communication. 3. To safeguard the basic policy objectives of Indian shipping, it is necessary to have some control over Indian shipping. Under the Indian law, the provisions relating to control of Indian ships are enumerated in Part XIV of the Merchant Shipping Act. The control over Indian Ships is exercised both by legislation as well as by executive orders. The present position of the control of Indian ships is exercised as
under: i. By a licensing system so that tonnage employed on a particular route is just that which is optimum and not more; ii. By issue of executive orders putting some restraint on the movement of ships; i. The licensing system envisages that an Indian ship or a ship chartered by a citizen of India or a company is not permitted to be taken to sea from a port or place in India except under a license granted by the Director General of Shipping or any officer authorized by Government in this behalf. ii. The coasting trade of India is exclusively reserved for Indian ships and for this purpose a ship chartered by a citizen of India or a company which satisfied the requirements laid down in section 21 of the M. S. Act, 1958 will be deemed to be an Indian ship. A foreign ship is not allowed to ply in the coasting trade of India except under a license granted by an officer authorized to issue it. iii. The categories of licenses, the form in which they are to be preferred by parties, conditions, subject to which they may
be issued and their validity period, where applicable are all laid down in the M. S. (Forms of Licenses) rules. The categories of licenses contemplated are: a. b. General License; A license for the whole or any part of the coasting trade of India; or c. iv. A license for a specific period or voyage.
The Director General of Shipping may, if the circumstances of the case so require, in his discretion, revoke or modify a license granted to a party subject however to the condition that the party in whose favor a license may have been so issued is given a reasonable opportunity to represent against such revocation or modification as the case may be.
v.
Licenses, which cease to be valid, are to be made over or cause them to be made over, within a reasonable time, to the Director General Of Shipping for cancellation.
vi.
A duty has been cast on the Customs Collectors not to grant port clearance to ships which are required to take out licenses under Part XIV of the M. S. Act, 1958.
vii.
In the case of an Indian ship or a ship chartered by a citizen of India or a company, Director General of Shipping has powers
to give directions with respect to all or any of the following matters: i. The ports or places, whether in or outside India, to which, and the routes by which, the ship shall proceed for any particular purpose; ii. The diversion of any ship from one route to another for any particular purpose; iii. The classes of passengers or cargo which may be carried in the ship; and iv. The order of priority in which passengers or cargo may be taken on or put off the ship at any port or place whether in or outside India. In the exercise of this power, Director General of Shipping will have to satisfy that it will be in public interest or in overall interest of Indian shipping to give such directives. b. Similar power exist under the Act which enables Director General of Shipping to give more or less similar directions to ships other than Indian ship or ships chartered by a citizen of India or a company.
5. Chartering: - The Director General of Shipping exercises control over the chartering of (a) foreign ships by Indian companies and (b) foreign ships by Indian parties. Charter transactions involving foreign exchange outgo are being cleared by an arrangement arrived at with the Reserve Bank of India. There are now two main classes of charter 1. Charters of foreign vessels by Indian shipping companies for employment in the overseas trade. 2. Charter of foreign ships for lifting export cargoes. The prescribed guidelines for clearing charter applications and objectives are detailed below: 1. Charters of foreign vessels by Indian shipping companies for employment in the overseas trade - to ensure that a. No Indian ship is available for the purpose of such time charter and the charter of a foreign vessel is considered necessary to supplement the existing vessels employed by the Indian shipping companies in the particular trade. b. The charter hire rates agreed to be paid by the charters to the owners of the foreign vessels are per se reasonable, having regard to the market condition.
c. The foreign earnings on the transport of cargo after deducting the charter hire and other payments in foreign exchange during the period of time charter of the foreign vessel would result in the net contribution to the country's foreign exchange pool. 2. Charter of foreign ships for lifting export cargoes - to verify that a. No Indian vessel is available for transport of the cargo in question b. Charter rates are reasonable c. The freight rate on the transport of the cargo after deducting the charter hire and other payments in foreign exchange would result in net saving of foreign exchange. For this purpose, F.O.B value of the goods to be exported is to be kept out of consideration altogether and thus a charter would be worthwhile only if there is net saving as compared to freight charters hire payable. The main aim in all cases is to ensure that: a. A foreign ship is allowed to be chartered if a suitable Indian ship is available for that purpose at
reasonable charter rates; b. The charter hire rate are reasonable having regard to the market conditions; c. The net result of granting permission to the proposed charter should be a saving or a earning of foreign exchange greater than if the permission were not granted. As a general policy, time charters are allowed only to Indian shipping companies operating owned ships.
Some of the important laws apart from Cabotage laws are as follows: Merchant Shipping Act 1958 Marine Insurance Act 1963 The Inland Waterways Authority Of India Act The Multimodal Transportation Of Goods Act, 1993
source
http://www.impgroup.org/uploads/papers/4613.pdf
date 24th September, 2010 26th September, 2010 27th September, 2010 29th September, 2010
http://www.cosco.com/en/pic/research/18031293448019015.pdf http://www.dgshipping.com http://shipping.nic.in/

Introduction: Pestel Analysis

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Introduction: Pestel Analysis

Uploaded by

Copyright:

Available Formats

Page |1 PESTEL Analysis of shipping industry

INTRODUCTION: PESTEL Analysis

B.R.C.M College Of Business Administration | 1

Page |2 PESTEL Analysis of shipping industry

This classification distinguishes between:

B.R.C.M College Of Business Administration | 2

Page |3 PESTEL Analysis of shipping industry

Page |4 PESTEL Analysis of shipping industry

B.R.C.M College Of Business Administration | 4

Page |5 PESTEL Analysis of shipping industry

B.R.C.M College Of Business Administration | 5

Page |6 PESTEL Analysis of shipping industry

B.R.C.M College Of Business Administration | 6

Page |7 PESTEL Analysis of shipping industry

INDIAN SHIPPING INDUSTRY

B.R.C.M College Of Business Administration | 7

Page |8 PESTEL Analysis of shipping industry

B.R.C.M College Of Business Administration | 8

Page |9 PESTEL Analysis of shipping industry

National Maritime Development Programme

P a g e | 10 PESTEL Analysis of shipping industry

B.R.C.M College Of Business Administration | 10

P a g e | 11 PESTEL Analysis of shipping industry

P a g e | 12 PESTEL Analysis of shipping industry

B.R.C.M College Of Business Administration | 12

P a g e | 13 PESTEL Analysis of shipping industry

Cruise Shipping Policy-2008

P a g e | 14 PESTEL Analysis of shipping industry

B.R.C.M College Of Business Administration | 14

P a g e | 15 PESTEL Analysis of shipping industry

B.R.C.M College Of Business Administration | 15

P a g e | 16 PESTEL Analysis of shipping industry

Economic environment of shipping industry in India

P a g e | 17 PESTEL Analysis of shipping industry

B.R.C.M College Of Business Administration | 17

P a g e | 18 PESTEL Analysis of shipping industry

B.R.C.M College Of Business Administration | 18

P a g e | 19 PESTEL Analysis of shipping industry

B.R.C.M College Of Business Administration | 19

P a g e | 20 PESTEL Analysis of shipping industry

SOCIAL environment analysis

P a g e | 21 PESTEL Analysis of shipping industry

P a g e | 22 PESTEL Analysis of shipping industry

P a g e | 23 PESTEL Analysis of shipping industry

B.R.C.M College Of Business Administration | 23

P a g e | 24 PESTEL Analysis of shipping industry

B.R.C.M College Of Business Administration | 24

P a g e | 25 PESTEL Analysis of shipping industry

B.R.C.M College Of Business Administration | 25

P a g e | 26 PESTEL Analysis of shipping industry

Effect of technological development on ship owners:

P a g e | 27 PESTEL Analysis of shipping industry

Effect of technological development on brokers:

P a g e | 28 PESTEL Analysis of shipping industry

P a g e | 29 PESTEL Analysis of shipping industry

B.R.C.M College Of Business Administration | 29

P a g e | 30 PESTEL Analysis of shipping industry

B.R.C.M College Of Business Administration | 30

P a g e | 31 PESTEL Analysis of shipping industry

Environmental factors analysis:

P a g e | 32 PESTEL Analysis of shipping industry

B.R.C.M College Of Business Administration | 32