Dear Friends & Colleagues, As would be expected in most publications such as our “Tidings”, undoubtedly the headlines and comments will mainly be about COVID-19.
The timing and sequencing seem to be tragically dramatic. It broke out just when the Chinese lunar year celebrations were underway and the holidays had to be extended. COVID-19 spread its tentacles from Wuhan to the rest of Hubei Province and then gradually to other provinces in China and also to Japan and Korea. Countries like Italy and Iran are heavily affected. The cruise vessel Diamond Princess is a stark reminder of the direct exposure of global shipping to the COVID-19. Our world was exposed to SARS in 2003, and it took a bit more than a year to find a cure and for normalcy to return.
The speed and the severity with which the virus spread from China, South Korea, Japan, and South East Asia to the Middle East especially Iran, UAE, etc. and then onto Italy and Spain, and then all over Europe is tragically staggering. Hundreds of thousands are affected and thousands have died. USA, Canada, and here we, in India, are in a complete lockdown mode. This is indeed unprecedented and the world is unprepared. At J M BAXI GROUP, each and every one of us have worked together to keep all our colleagues, clients and families safe. We continue to work with various authorities to cope with this disaster. After all, the nature of our business and activities makes it the most vulnerable to this gradually unfurling disaster.
At the time of writing this, there are mixed reports of the resumption of exports and imports through and from China. In the meantime, several of the large container shipping companies have cut services from and to China. The reports indicate that in TEU terms, 8% to 10% of the container fleet is idle or logged up. It has also been reported that in the petroleum sector, several refineries in China could not receive crude shipments, which has resulted in such cargoes being available to other markets, including India. The tanker markets worldwide certainly seem to be dampened. On the same note, the bulk carrier market has continued to be more than subdued. On the cruise shipping side, the impact of the coronavirus is expected to be devastating. So, all in all, the overall impact of the coronavirus may be a hard blow to all shipping sectors, with the impact lasting at least 3 to 6 months.
At the time of going into publication, the DG shipping of India has published guidelines for the handling, berthing, and quarantine of ships that arrive in India. The ports, which are “essential utilities” continue to operate but the trucking and transport industry remains under semi locked down condition. The proactive and strict clampdown by the governmental authorities is likely to result in successful prevention of a deadly spread of the Covid-19 thus preventing infection and fatalities.
This global crisis, disaster, emergency has had most governments also tackling the corresponding economic consequences that are following in the wake of this Covid-19.
News has shown that the US has announced US$ 2 trillion, UK £ 330 billion, various European countries including Germany, France, Spain, etc. with almost € 1 trillion. All governments are recognizing that the aftermath of this disaster is going to result in companies and citizens needing loads of help. We are at one of those times which truly seems to be existential quest and question. Some of the challenges that India will face is the existing banking and fiscal stresses in the system. These stresses have remained in the system which has effectively put stress on the companies which have managed to avoid the downturn due to prudent frugal and persevering governance and management. But there is certainly a limit to such ability to face downturns.
India’s annual budget 2020-21 focuses on slow growth rate, credit and liquidity issues, non-performing assets and streamlining taxes. The government’s commitment to privatize few non-strategic companies is expected to bring some positive developments, especially for companies like Air India, Shipping Corporation of India (SCI), Bharat Petroleum Corporation Limited (BPCL) and Container Corporation of India Ltd. (Concor).
Continuing on a positive note, let me share with you a recent inspiring event that occurred during our last review session at DICT Sonepat. We were privileged that the entire management team of the LT Overseas Food Company came to flag off their “export train” from DICT to Pipavav. It was incredible to learn from them about the range of products their company makes, mainly for the export market as well as their domestic market. Amongst many of their ventures, they also have an interesting joint venture with a Japanese company for ricebased snack products. They gave me generous gifts of their products.
- This event filled me with a deep sense of pride in two ways
- That an Indian company is taking global strides and paving the way for India’s significant participation in world trade.
- That we, as a company, have an opportunity to serve such jewels of India.
We, at J M BAXI GROUP, are continuing to uphold our commitments to our customers, our clients and our principals. Till the next time.
Krishna B. Kotak
Chairman - J M BAXI GROUP