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EXECUTIVESUMMARY

Premier mercantile services private limited is one of the oldest and largest stevedores and terminaloperators in Pakistan. pms was initially started by Mr. Haleem Siddiqui and his younger brother

Mr. Muhammad Shoaib Siddiqui in 1964. The inspiration and idea to start the project came from

Karachi port trust which lacked in efficiency and productivity, the brothers felt the need of private

stevedoring and terminal operating company to capture the large market by providing betterservices, improved quality and efficient handling by installing modernized equipments and latest

machines and by installing a computer based system.

Mr. Siddiqui has faced several challenges and problems in running the business. The intervention

of government has caused many obstacles for the company; to become proficient the company had

to set up modernized machines which required permission from the government, the company wasdependent on the govt. and this took a lot of time. Other problems, which they have to go through,

were malfunctioning of machines, accidents in handling which affected the productivity plus

customs obligations.

But, due to the hard work, commitment and expertise of Mr. Siddiqui in this field, he managed tocope with all the problems successfully and established PMS as one of the largest stevedoring

company at the Karachi Port at one point handling half the container traffic of Karachi Port.

According to Mr. Siddiqui there are three factors that play a significant role in leading the

company towards the path of success. Number one being the Services that are provided by thecompany, secondly, the commitment of the company in fulfilling its orders and promises with its

clients or customers and last but not the least, honesty of the company in terms of providing better

quality services.Today around 75% of the revenue in this industry is generated by PMS itself.

PMS now provides on-board stevedoring services to over 30,000 Container Units. Per months andprovides container handling services to several shipping lines calling at the Karachi Port. The two

major competitors of PMS are m/s badaruddin stevedores and friends corporation stevedores.

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INTRODUCTION

Premier Mercantile Services (pvt) limited was founded by Mr. Haleem Siddiqui and his younger

brother Mr. Muhammad Shoaib Siddiqui in 1964.

PMS has been engaged in providing cargo handling services at the Karachi Port since its inception

in 1964. PMS was one of the first stevedoring companies in Pakistan to invest in modern container

handling equipment. Through progressive investment and steady growth PMS is now one of the

largest stevedores at the Karachi Port at one point handling half the container traffic of Karachi

Port.

Equipped with the latest container handling equipment, PMS Provides on-board stevedoring

service to over 30,000 TUE (Twenty Foot Equivalent Container Units.) per month and provides

container handling services to several shipping lines calling at the Karachi Port. PMS has a

dedicated container yard at the East Wharf of Karachi Port used for stacking containers and

delivery to the trade/Shipping lines.

PMS also operated and empty container yard at TPX area outside the Karachi Port.

PMS is also the main sponsor and majority shareholder of Pakistan International Container

Terminal Limited which operates a state-of-the-art container terminal at the East Wharf, Karachi

Port.

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SALIENT FEATURES OF THE COMPANY

Following are the salient features of the company that makes it best among others:

PMS is the oldest and largest stevedore and Terminal Operator working on Karachi Port

Terminals on both East and West wharf for the handling of vessels as well as containers

Total area of around 70000 sq. mts at East wharf, KPT for handling of containers.

Total area of around 20000 sq. mts at West Wharf, KPT for handling and marshalling of

containers.

Total area of around 45000 sq. mts at TPX, Outside Port premises at M.T. Khan Rd. as well

for the handling and storage of empty containers.

Most modern equipments for the handling of containers which are:

Four Reach Stackers of 5 high

One Top loader of 4 high

Four Empty container handlers

One Heavy Fork Lifts (TCM)

Ten fully equipped hydraulics Trailers

PMS is the only company in the history of KPT to have its own State of art Shed for the

handling and storage of export cargo.

PMS is the proud sponsor of PICT which is the first Pakistan based state of art terminal

equipped with the most modern equipments for the handling of vessels in KPT

Skilled and efficient staff for the handling of cargo as well as containers

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ORGANIZATION CHART

Director

Operations

Secretary &

Off. Asstt

Chief

Accountant

Terminal

Manager

Chief

Engineer

Accountants

& Assitants

Commercial

Staff

Dy.Manager

Terminal

Equipment

InchargeOff. Asst.

Asst. Mgr

Admin & Claim

Dy. Manager

Operations

IT

Department

Drivers &

helpers

Onboard

SupervisorYard Foreman

Export

Consolidation

Hardware &

Network

Assistants

Computer

Data Entry

Staff

Tally ClerksOn board

checkers

Asst.

Foremens

Alongside

ClerksCheckers

STAFF HIERARCHY

SERVICES PROVIDING TO TRADE

Following are the esteem services that PMS are providing to their customers:

Vessels Stevedoring

Handling containers under hook

Terminal Operations for the cargo & containers of nominated customers

24 hrs Receive / delivery facility of Containers

De-stuffing of nominated Containers in KPT Sheds

Consolidation of cargo meant for export in very own state or art shed

Storage of Laden & Empty Containers

Maintaining of stock line/Customer wise

Transportation of Laden as well as Empty containers.

Prompt reporting to our customers through electronic media.

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One window Operation through efficient and friendly customer Service

Repairing and washing facility of dirty and damage containers

Office facility with all basic necessities like Telephone, Fax and computers with internet

facility etc.

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CLIENT LIST

PMS is very fortunate and feels proud that it has some of the big names of the trade in its clients

list such as HLL, Maersk, PIL and Safmarine. They are also the stevedore of countrys national

shipping line (PNSC). Following are their prominent clients in the trade which are using the

services of their company: AMI Pakistan

Anchor Shipping (Maruba & Emirate Shipping Line)

Buksh Investment (MNSL)

CIM Shipping (ARC & EM Key Shipping Line)

Consolidation Shipping and Logistics

Delta Shipping (PIL Shipping Line)

Delta Transport (HLL Shipping Line)

Globelink Pakistan (Pvt) Ltd.

IAL Pakistan (IAL Shipping Line)

ISPI Corporation (MISC Shipping Line)

Maritime Agencies Pvt. Ltd. (K Line )

Maersk Pakistan (Pvt.) Ltd. (Maersk Line)

Marine Services (Pvt.) Ltd. (Norasia, Transasia & Pollux & Castor Shipping Line)

Ocean Shipping and Logistics (Maxicon Line)

Pakistan National Shipping Corporation (PNSC Line)

Ravian International Agencies.

Riazeda Pvt. Ltd. (Balaji Shipping Line)

Safmarine Pakistan Pvt. Ltd (Safmarine Shipping Line)

Sea Hawk (Sea Hawk Shipping)

United Marine Agencies Pvt. Ltd (RCL Shipping Line)

Yaseen Shipping (STX Pan Ocean Line)

PROJECTS

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Below are some of the projects of the company which can clearly portrait the company image

regarding reputation, efficiency and professionalism:

Development of Software for the tracking and reporting of cargo as well as containers

Setting up a custom examination yard with all the basic requirements such as CCTV,

Computers with internet link via remote links and security guards Stuffing of Cargo on in reefer containers with the help of Stuffy at -65 temperature

Handling of Project Cargo Vessels

Handling of RORO vessels contains APV & APC

Consolidation of Export Cargo

FORTHCOMING PROJECT

To facilitate the trade one step further the management has decided to build a modern dry port in

Punjab at Prem Nagar near Raiwind in collaboration with Pakistan Railways. Currently the

feasibility work has been done and construction phase started, it provides a complete service of

marine and train/tailored to the customers specific needs, saving time, controlling costs, and

streamlining operations at Karachi Port and at Lahore ICD along with flexible and comprehensive

expertise.

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PROFILEOFTHE ENTREPRENEURS:

Name: Mr. Muhammad Shoaib Siddiqui

Age: 50

Family: Married and has three children.

Education: BA (private) from Pakistan, ITC (Inter transport course), ICD Course from UN and

CILT (Chartered institute of Logistic & Transport)

Last job held:No other jobs.

Designation: Director Operations of Premier Mercantile Services,

Personal funds invested: No personal funds, loan obtained from bank.

Other companies started: Started Al-Hamd Internatinal in partenership with a foreign company

but left it after a few years; Plans to establish another Inland Dry Port in Lahore.

Name: Mr. Haleem Siddiqui.

Age: 55

Family: Married and has three children.

Education: BA (private) from India.

Last job held: Worked in Navy as a Captain for 2-3 years, and then worked as a tele-contractor in

KPT.

Personal funds invested: No personal funds, loan obtained from bank.

Other companies Started: Mercantile Services ltd.

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INTERVIEW

About yourself and brief introduction of the business? What kind of services do you

provide?

Mr. Shoaib Siddiqui did private graduation and then started this company with his elder

brother Mr. Haleem Siddiqui.

Mr. Shoaib Siddiqui has a work experience of about 35-40 years. The company has bulid

many strong international contacts with the various countries, which helps in providing

better services.

PMS basically provides cargo handling services at the Karachi Port. PMS currently has

around 2000-3000 employees and four offices. PMS deals with the handling of 60,000

containers per month on average. Other than KPT (Karachi port trust), PMS is one of the

first stevedoring companies in Pakistan to invest in modern container handling equipment.

PMS is the only group in Pakistan involved in the handling of cargo, equipments and ships.

How was the firm created? How did you get the idea?

How did you get started:

How were the finances arranged?

All the initial investment was made by obtaining loans from banks as huge

investment was needed. It would not have been a wise decision to put personal

assets at stake.

Location of the company?

The companys first office was on rent in Wrighters Chamber, with the passage of

time, the company moved its offices at Business Center, now the company has huge

offices and stills plans to expand the business and establish a separate building for

PMS.

Basic competitors?

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In general there are 30 other stevedoring companies but following are the two major

competitors of PMS:

- M/S Badruddin Stevedore

- M/S Friends Corporation Stevedore (pvt) ltd.

Growth in terms of revenue?

75 % of the revenue is generated by PMS and the remaining is shared among the other

stevedoring companies.

What are the measures that your company takes to maintain stability?

The company believes in making less investment in order to maintain stability, to sustain

the environmental and other external factors and to keep up with the normal pace. To

maintain the stability, the company reduces the administration cost, management cost and

repairing cost of the machines to up to 60%. And the company cut downs it cost by renting

the equipment for handling the cargo instead of buying them.

Legal obligations?

The company faces major interference and involvement of customs and agencies. The

company is required to recieve permission from the customs after thorough investigation in

order to remove the threat of any suspicious movement of object. To make this method, less

time consuming PMS has installed scanners to detect any suspicious object in the

containers.

Documents are provided to the customs and KPT, beforehand to avoid any delay, and to

keep the track of the containers.

What are your company policies?

The company ensures to provide:

Complete handling of cargo, from uploading to discharging of containers.

The company aims to bear all the cost in case of damages and theft.

To prevent from losses, the company has insured itself.

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The company follows the organizational safety regulations from UN to protect

the staff.

The company is completely against downsizing; it wants to maintain the

current number of permanent employees (i.e. 3000); for extra workload it hires

temporary staff.

Transit claims: when the company exceeds the specified time they have to pay

extra charges.

In order to protect the activities the company records all the activities of the

employees.

Effect of political, economical situation on your business?

The economy of Pakistan plays a vital role in the stability of the company. As a matter of

fact, the import and export of the country always depends on the economy of the country,

and PMS basically deals with the import and export of cargo both outside and inside the

company. Presently the export and import of the country has reduced up to 35%, which has

also affected the company.

In adverse conditions, the export and import of container reduces, which lessens the

number of containers eventually. In adverse condition the company does not believe in

downsizing the employees, instead the company considers to cut the number of equipment

for handling of the cargo on port. The company avoids making any additional investments

in the period of recession. The number of containers due to the present situation has

reduced from 60,000 to 40,000.

What are the changes that came in the company over the years?

In the early period of 80s the operations of Premier mercantile services were basically

manual, as the containers were not containerized, the companies had to discharge the cargo

manually. With the passage of time they started to use crane-lifting and fork-lifting andnow they are using reach-stackers; also all their record keeping is computerized. The

company has brought many changes in itself from the time started, the company started

with the handling of general cargo but then in 1978 the company started the handling of

bulk cargo (which generally includes coal, wheat & sugar etc). In 2001, the modernization

in this field helped the company in cutting cost and to be more productive and efficient in

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terms of dispatching and uploading cargo from/on ships, which in result made the company

more successful. They have also installed scanners which make it a lot easier to scan the

containers for the Custom.

What are the success factors of your company?

Mr. Siddiqui believes that three factors play a significant role in companys success.

Services

Commitment;

And honesty.

Do you have any future plans/new business?

Mr. Siddiqui plans to start a mega project; an inland dry port in Lahore in the August 2009,

Inshallah!

Challenges of the new project: Government has played a major role, in delaying the Lahore

project. Mr. Siddiqui had planned Lahore inland dry port about 5 years ago, but the plan

took enormous time due to the inefficiency of the government managers, which in turn

caused delay in receiving loans from the banks.

Strengths of the new project: Government has dry ports but due to lack of marketing they

attract very few customers. This new dry port would offer efficiency and reliability to their

customers. They would provide guaranteed transit time, no fluctuation in freight charges,

no need of security deposits, one window operations; they would offer direct custom

documentation.

Marketing for the future project:

Personal marketing

Newspaper and magazine advertisement

Do you think your company is flexible in adopting change?

The company adopts new changes without any resistance. It even accepts changes easily;

as they installed computers with the changing demands of the time, hence they can claim

that they are the only stevedoring company which has complete computerized systems.

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Even now there are companies which are lagging behind as they havent accepted the

changes with time.

What are the challenges faced by the company?

The company has faced many hurdles from time to time; the interference of brokerage has

caused many problems for the company. And the government has also caused many

disturbances for the company; the involvement of the government in this business refrains

the company from bringing change in terms of modernization of equipments. The company

had to fight with the government for permission in this regard for a period of about 15

years (1980-1995) and had to go through a phase of constant struggle and fight. The delay

in the modernization of equipments, in installing new equipments effected the growth of

the company. The company is bound by law that they have to hire DLB (dock labor board).

What do you think is your companys competitive advantage?

According to them their competitive advantages are:

- The company has large amount of latest equipment which makes the

company more efficient as compared to its competitors.

- They have the expertise in this field. Mainly the extensive experience of the

entrepreneur Mr. Shoaib Siddiqui.

- Services_ they provide all three services in one package.- They charge relatively low prices.

How your company differentiates itself from its competitors?

Their cargo handling is very efficient they dont waste any time. Their prompt shifting of

unloading and loading the cargo is also another way they differentiate themselves. They

reduce the occurrence of damages by careful handling and even if any accidents happen

they compensate the damages.

How do you market yourself?

The company believes in word-to-word marketing of their services, their strong

connections and relationships build throughout the passage of time plays a major role in

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this regard. The company also markets itself through advertisements in newspapers and

magazines such as Murad Shipping Advertisment.

What do you think are the major qualities of an entrepreneur?

To become a successful entrepreneur, Mr. Shoaib Siddiqui believes that anindividual should be patient and calm. he should avoid hastiness and rapid success.

An individual should know how to manage his time efficiently.

And last but not the least; an individual should be committed to his work. He should

be committed and loyal to his words and fulfills his promises made to the

customers.

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Developments in Global Seatrade and ContainerShipping Markets: Their Effects on the Port Industryand Private Sector Involvement

Hans J F Peters

Baltic Maritime Advisers, 1444 Colleen Lane, McLean, Virginia 22101, USA

Abstract

During the past 20 years world seaborne trade increased by almost 40%.Liner shipping grew the fastest. Containerised cargo was clearly the mostdynamic sector of global seaborne trade. Containerisation has thus beena major and increasingly important element of not only maritime activity,but also of world trade and of entire global industrial structure. Thegrowing significance of containerisation is a reflection of the changesthat have occurred in the international organisation of manufacturing and

production. Container lines have moved through several organisationalphases in the search for profitability. Most of the advances incontainership design have been associated with the upsizing of vessels,both to accommodate trade growth and to offer economies of scale in ahighly competitive market. Information technology is now seen as thegreat battleground of the next decade among not just carriers, but alsoforwarders, logistics based integrators and, potentially, pure technologycompanies who may use their systems expertise to enter the industry atthe expense of traditional players. Container handling in ports is anotherarea where technical advance is noticeable. Increasingly larger tonnage,especially of vessels deployed in the container market, will havesignificant implications for ports. Massive investments and substantialproductivity improvements are generally required to enable ports to meetthe stringent service requirements of their customers efficiently. Thespeed of container handling and consequent vessel turnaround time is acrucial issue in terms of competition. The worldwide trend towardsgreater private sector involvement in ports has become apparent. Whilewholesale privatisation has occurred in a few cases, what is morecommon is the introduction of private finance, operation andmanagement in place of state funds and administration. The advent of theso-called 'global stevedore' in the 1980s has had a fundamental effect onport facility financing and management. The international stevedoringindustry is made-up of participants with a commercial remit. The bottomline with port facility acquisitions or new terminal developments is thatdevelopers of all categories look for annual pre-tax returns in excess of20% of turnover. While the acquisition and development of port facilitiesis a global business, it is one that is highly influenced by key individuals

within the international stevedores. Competition among internationalstevedores and between these parties and ocean carriers for portconcessions has never been stronger.

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CONTAINERSHIPPING AND PORTS: AN OVERVIEW

THEO E. NOTTEBOOM*Institute of Transport and Maritime Management Antwerp (ITMMA), University of Antwerp

The market environment in which container ports and shipping lines are operating is substantially

changing. One of the main driving forces to change emerges from the globalization process and the

large-scale adoption of the container since the late 1960s. Worldwide container port throughputincreased from 36 million TEU1 in 1980 to 266 million TEU in 2002. Forecasts point to between

432 and 468 million TEU in 2010 (OSC, 1997 and OSC, 2003). While the Atlantic Rim is thecradle of containerization, economically dynamic East Asia has become the worlds main container

region. The share of Asia in worldwide container port throughput rose from 25 per cent in 1980 to

about 46 per cent now, while Europe saw its share drop from 32 per cent to 23 per cent.

The rise of world containerization is the result of the interplay of macroeconomic, microeconomicand policy-oriented factors. World trade is facilitated through the elimination of trade barriers and

the liberalization and deregulation of markets. Practical evidence shows that the public sector has

redefined its role in the port and shipping industries through privatization and corporatizationschemes. Contemporary government intervention in an efficiency-oriented industry typically

focuses on the issue of market liberalisation and the creation of a level playing field for faircompetition, the monopoly issue and the public goods issue (see Goss, 1990; Baird, 2000; DeMonie, 1995; Notteboom and Winkelmans, 2001 and Everett, 1996). With the reassessment of the

role of the government much attention is now paid to governance issues in ports and shipping (see

Brooks, 2001 and Wang, 2003). Market liberalization revealed to enhance the development of

logistics throughout the world. International supply chains have become complex and logisticsmodels evolve continuously as a result of influences and factors such as the globalization and

expansion into new markets, mass customization in response to product and market segmentation,

lean manufacturing practices and associated shifts in costs. Customers need for a wider array ofglobal services and for truly integrated services and capabilities (design, build and operate)

triggered integrated logistics strategies (Christopher, 1992 and McKinnon, 2001) and a shift from

transportation-based 3PLs (Third Party Logistics) to warehousing and distribution providers and atthe same time opened the market to innovative forms of nonasset related logistics service

provision, that is 4PL (Fourth Party Logistics)2. Intensified competition at the supply side creates

pressures on cost management and on margins. The evolutions in supply chains and logisticsmodels urge container ports and shipping lines to re-think their function in the logistics process.

Recent literature has addressed the impact of changes in logistics on the functional role of ports

and shipping in value chains. Robinson (2002) places the role of seaports within a new paradigm

of ports as elements in value-driven chain systems. Notteboom and Winkelmans (2001b) andHeaver et al (2000) primarily discussed the changing role of port authorities in the new logistic-

restructured environment, while Martin and Thomas (2001) addressed structural changes in the

container terminal community. Slack et al (2002) demonstrates how the organizational

restructuring of the container shipping industry is taking place against the backdrop of logistics.

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