Dear Friends and Colleagues,It is with a deep sense of distress and despair that I begin this issue of the Quarter Deck. India has suffered and faced a virulent second wave of COVID-19 pandemic causing fatalities, infections and lockdowns but is now seeing a gradual decline in cases as well as fatalities. Our feelings of distress and despair are further deepened because there have been many infections and fatalities in our group of companies. These have affected our employees and also their dependent family members. I am sure each one of you will join me in condoling with the family members and in offering prayers for eternal peace to the departed souls.
Gajinder Singh Sahni, IAS(Retd.)(Consultant), Shekhar Kumar (CMT), Kishor Shegade and Dhawal Lalan (Diabos) Pravin Patil( J. M. Baxi & Co.), Parmod Kumar, Prabhat Gupta and Rohit Agarwal (ICTRIPL).
Deceased Dependents of J M BAXI GROUP employees
Aryacom: Hriday Narayan Mishra (Father of Shailendra Mishra), Asha Mahesh Shrivastav(Mother of Smita Shrivastav), Suneet Sharma(Spouse of Anju Sharma) and Saroj Kumar Upadhya(Father of Madhur Upadhya). BOXCO Logistics Infratrans: Sunita Raut(Mother of Paresh Sunil Raut and Savithri(Spouse of Srinivasa Rao), Diabos: Manjula Bai(Mother of Vimalnath C K), ICTIPL: Snehal V Ghugardhare(Spouse of Vinod Ghugardhare), Alex Fernandes (Father of Flavia Fernandes), Suvarna Darekar(Mother of Samir Darekar), J. M. Baxi & Co.: Ganpat Parab(Father of Anand Parab), Shubhangi Parab(Mother of Anand Parab), Chari(Mother of Praveena Chari), Narasimharao(Father of Venkatseetharaman), Anjali Mukherjee(Mother of Sumanta Mukherjee) and Ratnakar Acharya(Father of Prakash Acharya), KICT: Madhuri Devi(Mother of Sarvendra Kumar), PICT: Koppala LaxmiNarayana(Father of Koppala Ravi), Portall: Mohan Shah(Father of Sanket Shah), ULSS: Geeta R. Katira(Mother of Kumkum Lalwani), R. Vimala(Mother of R. Ganesh Sundaram), Mahohar Pawar(Father of Rina Chavan),VCTPL: K.Trimurthulu(Father of K.Nagendra Rao), D.Chittithalli(Mother of D.Kalyan Babu), R.Chinnammalu (Mother of R. Ramu), Sistla Narayana Murthy(Father of Sistla LaxmiNarayan Murthy) and J Chinna Rao(Father of J V Prasad).
We, at the J M BAXI GROUP, since the beginning of this pandemic in March last year, have been at the forefront of keeping the critical and crucial supply and transport chain going, as it forms the foundation of any economy, including the movement of life-saving medicines. No employee of the J M BAXI GROUP has shirked their responsibilities, as everyone has helped and assisted each other, as well as our principals, customers and clients. Our group of companies and each one of our employees have endeavoured to go above and beyond the call of duty. We have all tried to contribute substantially towards the emergency necessities. The J M BAXI GROUP of companies has spent a significant amount of money, for example by buying 1100 oxygen cylinders for the desperate and deprived population at large. We sincerely hope that the vaccination programme rolls out expeditiously and that our battle with COVID-19 will gain some traction. The only silver lining this time around has been that the doctors and the people sort of know what to expect and are trying to cope accordingly.
Translating the above into business and economics terms suggests, therefore, that there will be a delayed recovery. So, those who predicted that it would be a W-shaped recovery may well prove to be correct. India had to go into a lockdown last year, and 2021 seems to be mirroring the events of 2020.
For shipping, the last three months have been dramatic, to say the least. The headlines from the last week of March right up to April were completely dedicated to the grounding of the vessel Ever Given in the Suez Canal. To make the drama even more exciting, the ship is one of the largest container vessels in the world. With a length of 400 m, it blocked the Suez Canal. This crisis came on top of an ongoing lack of ship slots and a lack of containers for the trade in all the major trade routes. Several of the largest container ports in the world remained congested and some ports, especially, on the west coast of America, are seeing historic volumes of container trade, resulting in berthing delays of up to and beyond 10 days. One can well imagine what such delays are doing to sailing schedules and thereby to the rotation of ships and the actual carrying capacity of ships across their trade groups. All these events have contributed to skyrocketing charter rates for container ships, a continued skyrocketing of freight rates and a continued shortage of shipping slots and containers. Thus, each of the top 10 shipping companies have reported profits not only never seen before but also never dreamt of before.
It is expected that sooner, rather than later, orders for new ships will be placed, which should see something of a downward correction of freight rates. One of the interesting and encouraging trends has been the initiative to build ships running on newer fuels. To combat climate change, governments in various countries are aiming for zero-carbon footprints and are, therefore, moving away almost entirely from fossil fuels. So, several of the new ships will be powered by LNG and a few shipping companies are also working on ammonia, hydrogen and maybe, even methane or methanol powered ships.
The bulk carrier market has also seen a continued firming up of rates. Once again, there are several reasons for this, one of the main ones being the geopolitical tiff between China and Australia. Some of the commodities that China used to buy from Australia have been exported instead to South America and Africa, resulting in longer voyage times and therefore, more ships.
In the last few months, the tanker market has been the most affected. There has been a downward trend for rates as well as cargo volumes. With the pandemic affecting a large percentage of the world, any correction seems some time away. Thankfully, the gas carrier markets for both LNG and LPG remain in positive territory. The oil and gas exploration sector remains affected and the deployment of specialised craft remains under stress.
The India Meteorological Department has reported that the coming monsoons should be normal, and if that is so, then once again India can expect agricultural production to be healthy. As we all know, agriculture contributes almost 17% of India’s GDP and employs 65% of its population. It is also interesting to note that last year, exports of agricultural produce, and processed foods were substantial (approximately US$35 billion). Despite these difficult times, the J M BAXI GROUP and each of our constituent activities, such as agencies and services, logistics and terminals, together have seen a performance that can only be described as praiseworthy.
In the agency and service space, we have been able to prove to our principals and customers that, despite these difficult times of shortages, we always try to deliver. On the logistics side, once again, despite the challenges, we have been working closely with our clients while preparing for better days to come. On the terminals side, fortunately, we have seen our volumes hold at KICT in Kandla, RICT in Rozi, MICT-1 and MICT-2 at JNPT, PICT in Paradip, HICT in Haldia, DICT in Delhi and VCT in Vizag. The good and exciting news is that the first 100 m of our VCT expansion project have been built, commissioned and used. KICT has also ordered new equipment to enhance the capacity of our facility.
One of the significant achievements of the logistics division in the last month has been the transportation and forwarding of super heavy-lift packages exceeding 900 metric tonnes each. In time to come, capital expenditure and new projects will begin to roll out, increasing the demand for our specialised services.It is also my great pleasure to report that our incubating company, Arya Water Technologies, has made solid progress by implementing a creative and low-cost solution for city sewage and wastewater treatment. In Lonavala, Arya Water has installed six sewage and wastewater treatment plants in various parts of this small city. This solution, if adopted across India, would not only reduce treatment costs but also supply processed water for non-drinking uses. Such micro-solutions do not require large holding tanks, thereby releasing scarce land for uses other than water treatment.
In continuation of our previous reports from the Quarter Deck, due to the ongoing pandemic and the second wave, the privatisations of the Shipping Corporation of India and the Container Corporation of India are yet to find traction. With the fiscal challenges that will continually crop up, these ambitious privatisation programmes will eventually gather steam.
The areas that seem to be promising and exciting for the future are technology and digitisation. After a long period of assessment, Portall was selected to implement the much-awaited National Logistics Portal (NLP) (Marine). The efficient and expeditious implementation of this platform would be a unique game changer for our country. Just as PCS has propelled India into a very select list of countries, the implementation of the NLP would place India in a better position globally.
I conclude this issue of the Quarter Deck first with a message for each of you. One sure cure of COVID-19 is prevention, which is possible only through alertness and extreme care. Second, get vaccinated as soon as possible. Reach out to our pan-India helplines and make every effort to get you and your family inoculated. We all will need to work together to achieve this, and we need to help each other. Despite these difficult times, we remain hopeful and confident of the future, especially because of our teamwork, resilience and robustness.
Be safe, be healthy,
Krishna B. Kotak
Chairman - J M BAXI GROUP