Transport Corp. of India Looking to Place Cargo Ship Orders to Bolster Maritime Presence

In an exciting development, the homegrown logistics and supply chain management company Transport Corporation of India (TCI), is looking to place orders for two cargo ships in FY25. The company has allocated a budget of USD 35-40 million for these ships under its TCI Seaways business, which already has a fleet of 6 cargo ships with a total of 77,957 deadweight tonnes.

TCI is exploring options from shipbuilding operations in China, Japan, and Korea, expecting to finalize a deal in the second half of the fiscal year. Vineet Agarwal (Managing Director, TCI) shared that although they had placed orders during the previous financial year with a shipyard in Japan – Nakanishi Shipbuilding Co. Ltd. – things did not work out at the last moment and they had to be canceled.

TCI Group operates as a truly multimodal entity with arms spread across rail, road and water. However, to strengthen its seaway operations immediately, TCI is actively pursuing the purchase of a large second-hand cargo vessel, as new ships take around three years of delivery time. Moreover, three ships of TCI’s existing fleet will need to be replaced in the next few years.

Last October, Nakanishi Shipbuilding was commissioned by TCI to deliver 2 cellular container vessels of about 7,300 DWT each, totaling around USD 35 million. The cancellation of this contract led TCI to reevaluate its ocean fleet acquisition plan. It has allocated USD 75 crore in FY25 for its ship acquisition plan. This amount will be used to make payments to shipbuilders once the deal is struck, and rest of the amount shall be paid over the next few years through internal generation and bank credit. 

“We are looking overseas for ship acquisition as there is still a gap in what is available from domestic capacities. Shipyards in China, Japan, Korea and others are being explored,” Agarwal said.

TCI has also branched out to other parts of the world like Dubai, Nepal, Bangladesh, and an upcoming location in Sri Lanka. In FY25, TCI plans to invest INR 375 crore, out of which INR 75 crore have been allocated for ship acquisition to support its seaways operations, which currently contribute around 15% to revenue. 

“Our plan is based on following the customer strategy. So, we have set up our base in countries where our existing customers are demanding certain services. The expansion in the Middle East will continue in the next year or two with more business opportunities that are arising from there,” Agarwal said.

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