Bangalore: Chennai-based Caravel Logistics Pvt. Ltd on Thursday received a licence to operate a foreign-registered ship for coastal trade, overcoming objections of domestic shipping firms that delayed the decision by 10 months.
No objection: A cargo terminal at JN Port near Mumbai. Caravel will hire a China-registered vessel with a 500-standard container capacity. Ashesh Shah / Mint
“We have received a licence,” managing director Saju Chacko said by phone from Chennai. “During this period, we hope to learn the tricks of operating a ship so that we can buy our own ships later. That’s the idea.”
The firm will hire a China-registered vessel with a 500-standard container capacity to move cargo along India’s coastline. It will pay $3,700 (Rs1.9 lakh) a day for six months for operating the ship.
Before applying to the Directorate General of Shipping, India’s maritime regulator, for a licence, Caravel was granted a mandatory no-objection certificate (NOC) in March by the Indian National Shipowners Association (Insa). Foreign ships can be hired only when Indian ships are not available and only after the regulator approves it.
Caravel is finalizing a Rs25 crore private equity funding to be used for purchasing ships as well as setting up container freight stations to load and unload cargo into steel containers.
Caravel currently handles some 9,000 standard containers and uses container ships of state-owned Shipping Corp. of India Ltd to haul the cargo from northern India to Cochin via Mundra in Gujarat.
Initially, the local industry tried to block Caravel’s move to hire a foreign-registered vessel by invoking a rule that protects them from foreign competition in Indian waters.
Caravel had approached Insa for an NOC in June last year, which was granted but withdrawn a few days later, after an Insa member, Shreyas Shipping and Logistics Ltd, said it had a vessel similar to what Caravel wanted.
Insa had argued that Caravel could use Indian ships to help domestic shipowners, but Shreyas was asking for a day rate that was up to 25% more than Caravel would pay. “We told Shreyas very clearly that we will hire their ship only at the prevailing market rates,” Chacko said.
Caravel had approached the Bombay high court to settle the issue. “We will withdraw the writ petition as the regulator has now granted us the licence to hire the foreign ship,” Chacko said.