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Analysis for the course Analysis of Pakistani Industries taught at IBA by Dr.Khadija Bari. Done by BBA 4 students Adil yousuf,Hassan Khan and Saad Burney
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Shipping Industry
Why we chose this industry?
• Importance• History• Research methodology• Human Resource
Adil Yousuf
• Porter’s modelHassan Khan
• SWOT analysis• RecommendationsSaad Burney
Overview
Interviewed the key personnel manger, Shehrayar Hassan and the Executive Director Administration Brig. Rashid Siddiqi
Conducted a survey •Questioned twenty employees (both off-shore and on-shore) to find HR and job related information•Literature review
Research methodology
No informal sector One organization namely the PNSC The rest are foreign shipping companies like
DHL Global Forwarding and Maersk that handle 87% of Pakistan’s sea trading needs .
Structure of the industry
Post independence1950s
• Private ship owners built the national fleet from scratch that is nothing was inherited from the British
1960s
• In 1963 National Shipping Corporation(NSC) was formed
• Indo-Pak War in 1965 resulted in rerouting of ships due to security concerns
1970s
• 1971: Creation of Bangladesh reduced merchant marine ships from 71 to 57
• 1974:Shipping was nationalized. 9 private shipping companies were merged to form Pakistan shipping Corporation.
• 25+26 ships=51 ships• Merger in 1979 PSC+NSC=PNSC
History of the shipping industry
Significance of the industry
393.2 million rupees were paid
in taxes gainful utilization
of 1000 km of coastline.
Helps in foreign exchange savings
500000$/year
Since 90% of world trade is
carried through oceans therefore shipping industry is playing a vital
role in world economics. More than 95 per cent
of the total freight trade of Pakistan
is seaborne. “PNSC handles 13
% of it”
PNSC alone Provides
employment to 1112 people out of this 50% are
unskilled.and salaries of 940.2million
rupees were paid in the year 2011
National Flag carrier of Pakistan.
Engaged in transportation of
dry bulk and liquid cargoes globally
Management offices are located
in Karachi, Pakistan and are
listed on the Karachi Stock
Exchange since 1980
PNSC has 18 subsidiary companies
PNSC is an autonomous corporation
Functions under the overall control of the Ministry of
Ports and Shipping , GOP.
It manages a fleet of 09 ships, real
estate and a repair workshop.
Pakistan National Shipping Corporation
The Corporation is undertaking three main functions. These are:
I. Fleet OperationsII. Real EstateIII. Workshops
FUNCTIONS OF PNSC
OBJECTIVES OF PNSC
Carriage of National Trade by sea. Strategic Considerations.
Freight ships stability
Foreign Exchange Savings.
Managers at all levels must be qualified (have a degree in engineering or business administration) and have experience in relevant field.
Separate middle level on-shore and off-shore managers.
Strategic decisions made by top level management.
The rest by dept. heads.
Pyramid structure of management
“Untrained professionals mainly from Navy, Police and Army have lost some 64 large ocean-going ships lost due to
sinking and have caused colossal losses due to Inexperienced
administration and misuse of funds”
PNSC and its journey through the grey areas
Porters Model
Human resourceA survey
Employees questioned
Middle level managerTop level managerLower level managerNon-managers
Sample details
Q. How would you rate on a scale of 1 to 10, 1 being the least dissatisfying and 10 the most dissatisfying, the following factors are associated with job dissatisfaction?
Excessive pressure.____ Non-flexible timings.____ Lack of appreciation or rewards on good performance.____ Lack of additional benefits like being given a car and free
fuel.___ Lack of life or medical insurance.___ Longer than stated working hours.____ Sexual harassment.____ Not being able to carry weapons to defend myself in the
case of pirates attacking my ship.____ No being able to be with family because of long sea
journeys.________
The question asked
Top level Managers
Middle level managers
First-line managers
Non-managers
0 5 101520253035404550
Long working hours
not being able to be with family for long time
not being able to carry weapons
Sexual harassment
Lack of additional benefits
Lack of appreci-ation
Non-flexible tim-ings
Excessive pressure
Job dissatisfaction
PNSC has HR department and it has proper recruitment policies that are always followed.
Hiring is done like in any other firm although political pressure is always there.
Every job has unique requirements. It does send employees abroad. Last yr
0 and year before that 3 were sent abroad
It has a program of staff development in which job rotation, seminars, workshops are held by instructors.
General findings from surveys
PNSC has paid for its employees receiving degree in Marine engineering from NED.
PNSC does fire inefficient employees but still it has more than needed employees.
It has 1112 employees (off-shore and on-shore). 50% of these are unskilled.
During the past 2 years 30 to 40 employees were hired (onshore)
Most recruits are graduates.
%age hired from business schools=1 %age hired from medical universities=0% %age hired from engineering universities primarily
NED= 3 to 4% More people are preferred from armed forces
specifically Navy. Appraisal reports are used for employee
evaluation. Most think they are VALUED AS EMPLOYEES and
were unwilling to switch jobs if offered a higher pay.
For most employees shipping wasn’t first choice
Continued
Factor conditions
• Strategic location • Equipment• Blessed with long warm water coastline with
3 deep sea ports .
Deep sea Ports
Port Qasim Karachi Port Gawadar Port
Ports in Pakistan
Major ports • Karachi Port• Port Muhammad Bin Qasim• Gwadar PortSmall Ports • Jiwani • Pasni • Ormara• Kalmat• Keti bander
Length of Pakistani coastline : 1100 km
Length of Indian coastline : 7517 km
PORT QASIM:FACTS• Geography : 45 km Navigational channel that
can accommodate 75000 DWT • Located between Phitti ,Kadiro , Gharo Creeks• Pakistans first industrial and commercial port• Handles 35 % of seaborne trade • Named after general Mohammed Qasim of 712
CE• Pakistan’s first industrial and commercial port• Handles 35 % of seaborne trade
BERTH OPERATIONS AT PQ ACTUAL NO.OF BERTHS
SHIPS HANDLED IN 2010-2011
Marginal Wharf(1-4)
4 124
QICT(5-7) 3 627
Iron Ore and Coal Berth
1 17
FOTCO 1 166
Engro Vopak 1 123
PROGAS (LPG) 1 8
LCT 1 138
FAP 2 26
1229
TARIFF AT PQ
Cargo handled at Mumbai port over the last 5 years (‘000 Tonnes)
35.1 M
51.8 M54.5 M 54.5 M
CARGO TRAFFIC–A COMPARISONYEAR PORT QASIM MUMBAI PORT
2005 - 2006 1051 6787
2006- 2007 1155 6088
2007 - 2008 1139 6150
2008 - 2009 1230 5620
2009 - 2010 1187 5820
2010 - 2011 1240 5622
Traffic at Indian Ports –a comparison
Industrial and Commercial projects
• KESC thermal power • Indus motor automobile plant• Engro asahi polymer plant • ICI PPTA plant• Bin qasim fertilizer plant • Awam palm oil refinery • Mapak edible oil refinery • BOC gases
KARACHI PORT -FACTS
Pakistan’s largest and busiest port Operational since 1854 Operated by Karachi Port Trust Handles 65% of Pakistan’s seaborne trade Annual cargo tonnage 25 million metric tons Annual container volume 2.3 million TEUs
Berths at Karachi PortBerth activity
West wharf
13 berths + KICT
East wharf
17 berths +PICT
Liquid cargo berths
3 oil piers
BERTH OPERATIONS AT KARACHI PORT BERTH BERTH NUMBER
EAST WHARF 1 - 17 Off which 6 – 9 is PICT
JUNA BANDER 18 - 23
WEST WHARF 24 – 30 Off which 28 – 30 is KICT
OIL PIERS OP 1 ,OP 2 ,OP 3
KPT Tariff
Upcoming Projects • An increase the handling capacity of KICT from 300,000 TEUs to 400,000
TEUs per annum• Two new berths at KICT with 14 metres depth alongside and an additional
100,000 m² terminal/stacking area• A new bulk cargo terminal at East Wharf• Reconstruction of the oldest oil pier to allow tankers of 90,000 metric tons
deadweight (DWT) to berth• A new 100-acre (0.4 km2) cargo village to cater for containers and general
and bulk cargo• Reconstruction of the 100-year old NMB Wharf to enhance the berthing of
passenger vessels• The purchase of a new dredger, two hopper barges, two harbour tugs, two
water barges, an anchor hoist vessel, two pilot boats, and a dredger tender• A 500-foot (150 m) high Port Tower for commercial and recreational use
including a revolving restaurant• The construction of a 500 acre (2 km²) Port Town with 13,000 homes for
port workers at nearby Hawkes Bay• A new Port Club at China Creek adjacent to the East Wharf• On November 9, 2007, the Karachi Port Trust signed a US$1 billion
agreement with Hutchison Port Holdings to construct a new terminal called the "Pakistan Deep Water Container Port”, which would begin operations by 2010, and would have ten berths capable of handling Super Post Panamax container ships.[
GWADAR PORT
GWADAR PORT
It will act as catalyst for large number of related projects like:• Trans-shipment of bulk cargo • Oil storage, refinery and petrochemicals• Export processing and industrial zones • Export of minerals/livestock • Services (hotels, accommodation, tourism)
GWADAR PORT INFRASTRUCTURE 3 multipurpose 4.5 km long approach
channel dredged to 13.5m - 14.5m Terminal infrastructure, cargo handling
equipment, pilot boats, tugs, survey vessels etc.
Port can handle 50,000 DWT vessels.
EQUIPMENTSHIP TO SHORE
REACH STACKER
RUBBER TYRE GANTRY
EMPTY HANDLER
EQUIPMENT QICT PICT KICT
STS 9 6 7
RTG 27 20 23
Reach stacker 11 21 21
Empty handler 3 4 2
Fork lifter 1 1 1
QICT – FACTS• Largest port
privatization projects in Pakistan
• QICT operates at berth 5-9 at Port Qasim
• First and only terminal to achieve ISO 9001:2000 for information security management
• First terminal in the SUB CONTINENT to achieve ISO 28000:2007 certification for supply chain management
• Operating under the IC3 program
QICT – FACTS • Productivity : has
capacity of 850,000TEUs
• Total terminal size : 30 hectares
• Yard stacking area: 25 hectares
• Berth length :1327m • Only 13 km away from
national highway and connected to 6 railway lines
PICT –Facts and Figures • PICT operates at berth
no . 6-9 at Karachi Port • Productivity : Handles
50 container vessels per month
• PICT handled over 669,806 TEUs in 2011
• Night navigation available
• Only port infrastructure whose shares are quoted on the KSE.
Other Facilities at PICT PICT Power House
caters for the entire domestic and commercial power needs of the Terminal
Present Capacity is 10 mega watts, with eight diesel generators of 1.2MW each
Security at PICT • A state-of-the-art container scanner which
provides horizontal and vertical images (side and top views)
• rapid inspection of containers for detecting contrabands and undeclared items
• Latest technology of X-Ray Accelerator• Electron Beam Energy: 6MeV (Million Electron
Volts)• Beam penetration is through 340mm steel• Radio Activity Monitors for detection of
radioactive substances
KICT• Operations began in 1998• Operates at berth 28 – 30• Member of Hutchison Port holdings (worlds
leading port developer)• KICT is an ISPS code compliant and is ISO
9001:2008 certified. • located at the threshold of three strategic
regions – South, Central and West Asia• KICT has an ideal location and provides
shipping connections to leading hub ports in Asia ,middle east , Europe and north America
KICT – IT Facilities
• First terminal to implement Pakistan Automated Customs Clearance Systems(PACCS)
• KICT’s operating system was designed by Navis Corp EXPRESS database software interface
• Allows for real time communications• KICT’s site provides up to date information
on vessel container status and vessel schedule
STRATEGY STRUCTURE AND RIVALRYWhen shipping a product overseas, the exporter must be aware of• Packaging• Labeling • Documentation• Insurance requirements.
ROLE OF FREIGHT FORWARDERS Agent for the exporter Licensed by Federal Maritime Commission to
handle ocean freight. Help exporters in preparing price quotations
PACKAGING
Breakage Moisture Pilferage Excess weight.
LABELLING Meet shipping regulations Ensure proper handling Conceal the identity of the contents Help receivers identify shipments Insure compliance with environmental and
safety standards.
LABELLING ..CONT Country of origin Weight marking (in pounds and in
kilograms) Number of packages and size of cases (in
inches and centimeters) Handling marks (international pictorial
symbols); Cautionary markings, such as "This Side Up" or "Use No Hooks"
Labels for hazardous materials
INSURANCE Damaging weather conditions Rough handling by carriers Pilferage Shipments by sea are covered by marine
cargo insurance.
PNSC FLEET STRENGTH• COMBI VESSELS
Vessel name Dead weight
Gross tonnage
• SARGODHA,ISLAMABAD,MULTAN
18242 12395
TANKERSVESSEL NAME DEADWEIGHT GROSS
TONNAGE
QUETTA,LAHORE,KARACHI 107,018 58,118
BULK CARRIERSVESSEL NAME DEADWEIG
HTGROSS TONNAGE
KAGHANCHITRALMALAKANDHYDRABADSIBI
• 65 ,716 MT
• 46,710 MT
• 76,830 MT
• 52,951 MT
• 28,442 MT
• 36,098 MT• 26,395 MT• 40,040 MT• 29,365 MT• 17,018 MT
Fuel prices are rising hence causing cost of shipping to rise and so important to find alternatives.
“Our job is to provide good shipping services not to make ships , companies in US do this and they are researching in using biogas or solar and wind power for moving ships”
ALTERNATIVE SOURCES OF ENERGY
Points worthy of being mentioned.: Government not investing Reason: it is not a sick industry Implementation of landlord port concept Govt. regrets privatizing Resumption of shipping between India and Pakistan. Shipping is a capital intensive industry and the Government
alone cannot meet this sector’srequirements because of financial constraints and other
development priorities. Considering this aspect, anumber of incentives have been offered to encourage the
participation of the private sector 1975 Indo-Pak shipping protocol LETTERS OF APPOINTMENT TO LOCALS AT GWADAR-PORT
Government policies
SWOT ANALYSIS
STRENGTHS
• Pakistan’s geographical
location
• Three ports: KPT
Port Qasim Gwadar
• PNSC: Old company Experienced
staff Policy on
website
WEAKNESSES
• Shipment delays• Lack of facilities for
night navigation• Private investors
discouraged to invest• Inefficient post custom
clearance procedures• Corruption
• No effort on training and increasing
technical knowledge• Foreign companies
• Large vessels cannot be accommodated
• Higher age of fleet• PNSC:
Over-staffed Government forces to
do some tasks
Political pressure No containerized
vessels
THREATS
• Shipping industry down –
global threat• High duty and
taxes from the government• Political
instability and corruption
• Many countries are limiting
imports• Poor image of
our country• Increasing price
of oil• Increased
freight charges• Loss of foreign
exchange• Capital intensive industry
OPPORTUNITIES
• Geostrategic location of
Pakistan
• Gwadar port
• Investment opportunities
at ports
• PNSC:PNSC set to buy 5
new vesselsCan get into LNG Joint venture
with PSO PARCO joint
venture
RECOMMENDATIONS
• Government should attract
private investment
• PNSC needs to increase its
fleet strength• Port facilities
should be improved to
accommodate ships with
deeper draft• More terminals
• Integrated Cargo Container
Control (IC3) facility at more
terminals• Oil pollution
control equipment
THANK YOU!