Logistics & Transportation

China - Shipyards heading for stormy waters

Source: Xinhua Daily, 07 February 2012

The approach of spring hasn't brought good tidings for Chinese shipyards, which continue to struggle as a sluggish world economy, a glut of vessels and surging fuel prices hurt shipping demand. Some small Chinese shipyards, short of new orders, are on the brink of bankruptcy.

Rising costs for materials and labor, amid dull market conditions, have worsened the situation for small shipping companies and shipyards. Industry losses are widespread. According to the China Association of the National Shipbuilding Industry (CANSI), the volume of new orders in 2011 fell 52 percent.More than 30 percent of the country's small shipyards are likely to go bankrupt this year, industry insiders said.

India - India's logistics sector unlikely to see major changes, says Fitch

Source: The Hindu Business Line, 07 February 2012

The Indian logistics industry was poised for a significant change when the proposal for FDI in multi-brand retail was cleared by Cabinet, but with this major regulatory reform delayed, it is likely to be business as usual in the sector, according to a Fitch report.

It said while small unorganised companies would continue to provide stiff competition to the organised sector, large companies with a pan-India reach could benefit over the medium-term from potential regulatory changes from 2013 onward. The agency also said the impact of the slowdown in the country’s economic growth is likely to be offset by a rise in the use of outsourced logistics. This will result in a slight increase in revenues of third party logistics firms providing transportation and warehousing.

India - India Panel Recommends 49% FDI by Foreign Airlines

Source: The Wall Street Journal, 07 February 2012

A panel of Indian ministers has recommended allowing foreign airlines invest in the country's aviation sector and to let local carriers directly import jet fuel, Aviation Minister Ajit Singh said. Foreign airlines are currently barred from buying stakes in Indian aviation companies, but some carriers and several sections of the government feel they may invest if allowed to do so because of the long-term positive growth prospects of the industry.

Both proposals are meant to support local aviation companies, such as Kingfisher Airlines Ltd., which have been severely hit by losses due to high fuel costs and interest rates. The financial troubles have discouraged private-equity investors as well as lenders from putting money into the sector.

Visit our Logistics & Transportation practice