PNSC to expand dry cargo operations

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KARACHI: National flag carrier Pakistan National Shipping Corporation (PNSC) has devised a strategy to expand its footprint in dry bulk cargo transportation, mostly for public sector entities, and reduce reliance on the liquid segment like petroleum products due to the changing global shipping dynamics.

In its Annual Report 2023 sent to the Pakistan Stock Exchange (PSX) on Thursday, the corporation said “it seeks to reduce its dependence on the tanker segment by expanding dry bulk operations, particularly by securing long-term contracts, especially from public sector entities.”

“Global oil product shipping is expected to experience double-digit growth in 2023, while tonnage demand will only increase by 4%. This trend is also influencing crude oil trade and, to a lesser extent, impacting dry bulk shipping.”

The share of dry bulk cargo stood at 17% while the remaining 83% was held by liquid cargo in the previous fiscal year ending June 2023.

Pakistan’s total seaborne trade volume declined to 82.95 million tons in the previous fiscal year compared to 106.82 million tons in FY22. Of the total, PNSC transported 13.06% (10.83 million tons) in FY23 compared to 11.21% (11.97 million tons) in FY22.

Besides, “it strives to penetrate new markets domestically, such as container feeder service (running small ships to transport containers to and from large ships parked away from berths) and palm oil transportation,” the Annual Report said.

The logistics firm has set up a subsidiary to provide stevedore services of cargo loading and unloading to and from ships, and “aims to capitalise on the opportunities in the NVOCC (non-vessel operating common carrier) and slot business by targeting public sector entities.”

In line with its vision, PNSC aims to meet cargo carriage requirements for Pakistan’s tankers, with the specific target of transporting up to 40% of clean petrochemical products imported into the country. The corporation was able to secure a contract from Shell Pakistan for the international transportation of its cargo.

It said it had embarked on a strategic endeavour to expand its operations into the marine service business, a key focus being stevedoring and the management of essential maritime assets. To facilitate this expansion, the corporation has established a dedicated subsidiary, namely Pakistan Marine and Shipping Services Company (Private) Limited (PMSSC).

“After obtaining the necessary licence from Karachi Port Trust (KPT), PMSSC is now fully equipped to undertake stevedoring operations,” it said, adding “PMSSC has also ventured into agency operations for prominent entities, including the Trading Corporation of Pakistan and other lines.”

The corporation said freight charges had dropped substantially in the year under review compared to Covid-19 times when the charges shot up to skies due to lockdown and stuck containers in many countries.

The group achieved the highest-ever profit after tax of Rs29.99 billion in FY23, an increase of 431% as compared to last year, when it earned a net Rs5.65 billion.

During the year, the impairment loss on receivables from PSO amounted to Rs575 million whereas finance cost increased due to the rise in Kibor (borrowing cost) and loans acquired for procurement of vessels.

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