Interview: Mr. Sohail Shams, CEO United Marine Agencies

SADAF AURANGZAIB, Senior Correspondent
May 28 - Jun 03, 2007

United Marine Agencies (Pvt) Ltd started its operations in 1988. Headquartered in Karachi, the company operates full-service branch offices in Lahore, Faisalabad, Sialkot and Multan. The shipping agency and agent for Hyundai brands, the company is also the exclusive Pakistani representative for other products such as Hamburg Sud, CCNI, RCL, Delmas and Ceekay. The company primarily acts as shipping agent for liner, container, bulk cargo, tanker and conventional vessels at both Karachi port and Port Qasim. PAGE conducted an interview of its CEO Mr. Sohail Shams.

PAGE: First of all tell us something about your company and its operations?

SS: We are representing the international shipping lines and we book cargo on their behalf. We also provide assistance to local clients from all parts of Pakistan. We also deliver all the imports arriving in Karachi to the different parts of Pakistan.

PAGE: While operating on the port, what facilities or difficulties do you usually encounter?

SS: Facilities are provided to us by the port authorities but these facilities need improvement. In order to provide premium services at low freight and low cost to the clients whether they are exporting or importing, there is a dire need to have the facility on the ports to handle the bigger ships. Globally, the freight rates are going down and today the international liners are operating bigger ships (4000 TUs) instead of plying the smaller ships (2500 TUs to 3500TUs). All the ports in the region like India, Colombo and Singapore are providing facilities to handle bigger ships. Here in Pakistan we have the length restriction as well as draft restriction so in order to bring in more business, the port authority should enable both Karachi and Bin Qasim ports with this facility so that bigger vessels can make their way to Pakistan. Then the feeder vessels and the transshipments that we presently have from Dubai and from other corners, these can be done here at normal cost which will also ease the cost of doing business for the trading community.

PAGE: As the chairman of the All Pakistan Shipping Association, what is your outlook on the shipping industry of Pakistan?

SS: When I talk of shipping industry, I mean the ship agents and not the ship owners. The way I am looking at ship agents is that we are a service industry; we are serving the trade and we are the backbone of the country as nothing moves without us. 70%+ cargo moves through the sea. Ship agents are the backbone of the economy as otherwise our country could not compete in the international market. On the part of government we have one suggestion to make our industry more competitive and that is to curb the tax (PTR) on the agency commission or on turnover/revenue and instead of that the tax should be charged on income.

PAGE: How do you see the growth of your company in view of the growth of the Pakistani trade?

SS: It's an awesome growth. During 2003-2004, Pakistan was shipping around 800,000 TUs and now in a span of four years we are shipping around 1.8 million TUs so it has grown tremendously and we have grown with it. Today we are capturing around 4-5% of the total market share.

PAGE: How do you see the freight expense for Pakistani trade?

SS: Freight expense depends on the supply and demand situation. Supply means that if the tonnage and ships are more then the ocean freight will be less but if the demand is high and supply is low then definitely the ocean freight will be higher. Globally, we have seen that the prices of oil are the major factor in determining the freight expense. We have seen that because of this factor several international lines go bankrupt; many got merged and now the demand is less while the supply is high. We have a mix flow of goods and mix of call on ships. Few of the liners are direct lines while many big vessels could not come so they are transshipping via Dubai, Colombo or Singapore. If our port will become capable of having a 12 meters draft, then I can say that 90% main liners will come directly and there will be no transshipment to any area. That will also do good to the traders as the transit time will also get reduced. Many foreign principals come to Pakistan but couldn't bring big vessels because of this restraint. If we supply our bulk directly to those countries in a lesser period of time, we will naturally be able to capture more of the international market as well.

PAGE: How do you see the public-private ownership in shipping?

SS: The basic reason is that the industry hasn't been able to attain the status of an industry. If you compare it with India, they have given it the status of an industry. Here the reasons are investment and confidence, which were badly shattered by the nationalization and still could not build up to that extent. Today Pakistani carriers are having other country's flags. The best way to build up the confidence is through awareness by using the channels of media, open house conferences, etc.

PAGE: Any proposal or suggestion that you would like to give?

SS: Firstly, I ask the government to curb PTR and secondly is that the process of clearance has to be made more responsive while dealing with containers, specially because of the hackneyed approach. If a container, by mistake, has to penalty the case should be dealt promptly and the containers should be given release after submitting that penalty to the authorities. This will save the time and expense both. The process of that interface should be reduced in time and prompt in action