Internship Report On

PAKISTAN NATIONAL SHIPPING CORPORATION
VARIOUS DEPARTMENTS

Submitted to: Capt. S. Hashim Hasnain
[Manager (ISM/TRG) CSO of P.N.S.C.]

Submitted by: Shariq Khursheed

Date: 28-09-2009

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Acknowledgment
By the Grace of ALLAH, the most Merciful, the most Beneficial, I am today submitting my internship report, at the end of my first pragmatic experience and I am glad to have it with PNSC, where you feel very friendly environment, either you are an employee, customer or internee. Thirst of learning is inside you, and whatever the environment, if you're willing to learn, you do. At PNSC, I had a new, challenging, yet a perfect environment to learn. My parents' prayers and their teachings were always with me and hereby I will like to take this opportunity to show my gratitude to all those who made my internship an adventurous outwit. Here I am. I never knew what it all going to be. As I enter the PNSC workshop at west wharf Road on first floor, it took me a minute to realize that the person who has very pleasant personality is the deputy manager of SSD department. A t a glance, I grasped the interesting personality of the deputy manager and today at the end of my internship; he is one of the persons I’ll always remember. Sir whatever I learnt from you is

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always going to be respected, no matter whatever business field I choose. Those tips are always in my memory bag. I have no words to gratitude to Mr. Rasheed Ahmed Siddiqui (Assistant Manager) MIS department for their intellectual guidance without which it could have been rather difficult for me to complete this report. I'm really grateful to you sir for clarifying my concepts and making me learn from your experience. Whatever I learnt from you will definitely help me in my upcoming study and the professional life ahead. Thank you so much for being so co-operative and so helpful every time. I hope sir I have been up to your expectations. In the end, I'll like to thank all my other colleagues, Miss Uzma, Mr. Ghafoor, Mr. Gohar, Mr. Fayyaz & Mr. Minhaj-urRehman, Deputy Manager SSD Department and all my other friends and superiors i n PNSC, for their unconditional support and help in making me learn in a good environment.

M.Com (Finance)-2009 University of Karachi, Karachi

(SHARIQ KHURSHEED)

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LIST OF CONTENTS

No. 1 2 3 4 5 6 7 8 9 10 11 12

Contents Executive summary PNSC introduction Significant development Vision/Mission Brief history SSD department Commercial department MIS department Finance department SWOT analysis Conclusion Bibliography

Page No 4 5 8 9 9 11 12 21 22 23 25 26

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EXECUTIVE SUMMARY
As we all know very well that time and tide wait for none. So because this rapid change in time and era we have to cope with it. During this era I got an opportunity of getting practical knowledge about the shipping system in Pakistan. So to quench the thirst of practical exposure and for getting the basic knowledge about shipping industry I joined PNSC. During four (4) weeks in PNSC, I gather all necessary information about PNSC. Efforts have been made to compile this report in such a way that activates its salient features that will support other trainee in PNSC in future. I have divided this report into different chapter. First chapter is about introduction of PNSC. Second chapter is about the vision & mission. Third chapter comprises of brief history of PNSC. Fourth chapter relates with the departments of PNSC. Fifth chapter is concerned with SWOT Analysis, A very strong analytical & hypothetical tool. Sixth chapter is conclusion.

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P.N.S.C. INTRODUCTION
PNSC is the national flag carrier managing a fleet of 12 vessels. The Corporation's head office is located in Karachi. A regional office based in Lahore caters for upcountry shipping requirements. The Corporation also has an extensive overseas network of agents looking after its world wide shipping business. Pakistan National Shipping Corporation (the Corporation) and its subsidiary companies (together 'the Group') were incorporated under the provision of Pakistan National Shipping Corporation Ordinance, 1979 and the Companies Ordinance, 1984 respectively. The group is principally engaged in the business of shipping, including charter of vessels, transportation of cargo and other related services. It also engaged in renting out its properties to the tenants under the long term lease agreements. Its registered office is situated at PNSC Building Moulvi Tamizuddin Khan Road, Karachi. Pakistan National Shipping Corporation "PNSC" is an autonomous corporation, which functions under the overall

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control of the Ministry of Ports and Shipping, Government of Pakistan. It manages a fleet of 14 ships, real estate and a repair workshop. Pakistan National Shipping Corporation (the Corporation), its subsidiary companies and an associate (together 'the Group') were incorporated under the provisions of the Pakistan National Shipping Ordinance, 1979 and the Companies Ordinance, 1984 respectively. The Group is principally engaged in the business of shipping, including charter of vessels, transportation of cargo and other related services. The Group is also engaged in renting out its properties to tenants under long-term lease agreements. The Group's registered office is situated in PNSC Building, Moulvi Tamizuddin Khan Road, Karachi except for Pakistan Co-operative Ship Stores (Private) Limited which is situated at 70/4, Timber Pond, N.M Reclamation Kemari, Karachi.

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The PNSC Group consists of subsidiary companies.

SUBSIDIARY COMPANIES

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.

Bolan Shipping (Private) Limited Chitral Shipping (Private) Limted Hyderabad Shipping (Private) Limited Islamabad Shipping (Private) Limited Johar Shipping (Private) Limited Kaghan Shipping (Private) Limited Karachi Shipping (Private) Limited Khairpur Shipping (Private) Limited Lahore Shipping (Private) Limited Lalazar Shipping (Private) Limited Makran Shipping (Private) Limited Malakand Shipping (Private) Limited Multan Shipping (Private) Limited Quetta Shipping (Private) Limited Sargodha Shipping (Private) Limited Shalamar Shipping (Private) Limited Sibi Shipping (Private) Limited Swat Shipping (Private) Limited Pakistan Co-operative Ship Stores (Private) Limited

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The Group owns 55 percent of the share capital of Pakistan Co-operative Ship Stores (Private) Limited and 100 percent of the share capital of the remaining nineteen subsidiary companies. All the fully owned subsidiaries of the Group operate one vessel / tanker each with the exception of Karachi Shipping (Private) Limited, Lahore Shipping (Private) Limited and Shalamar Shipping (Private) Limited.

SIGNIFICANT DEVELOPMENTS DURING THE PERIOD

During the period three vessels, MV Hyderabad, MV Malakand and MV Sibi and one tanker, MT Lalazar were disposed off. These ships had reached their useful lives and further investment to maintain them was not considered worthwhile.

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VISION/MISSION STATEMENT
To develop and execute short-t e r m a n d l o n g -term business plans to ensure sustainable growth of the Corporation as the national flag carrier and a lead player in the shipping industry.

BRIEF HISTORY OF P.N.S.C

In 1947 Pakistan inherited a fleet of four privately owned cargo ships. In 1963, the National Shipping Ordinance was promulgated and National Shipping Corporation (NSC) was established which procured its first used ship, m.v. Rupsa in 1965. The national fleet comprised of some 53 vessels which were owned by 10 private shipping companies. The national fleet strength grew to a record 71 vessels just prior to the separation of East Pakistan and its emergence as Bangladesh in 1971. The fleet strength declined to 57 vessels after the separation.

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In 1974, nine private shipping companies, which had a total of 26 ships, were nationalized. The national fleet strength increased to 51 vessels including 26 with the nine nationalized companies plus 25 ships with the state-owned NSC. In 1977, 14 ships were inducted in the PSC during the Fifth Five-Year Plan. Two years later, NSC and PSC were merged to form the Pakistan National Shipping Corporation (PNSC) which still remains the sole state-owned shipping corporation. The total fleet strength increased to 60 ships with the induction of 14 vessels in late 1970s and early 1980s. Currently, the PNSC manages a total of 12 vessels which includes 8 Multi-purpose Cargo ships, 3 Aframax Tankers, and 1 Bulk Carrier and the Dead Weigh tonnage is 636,182. Pakistan Tanker Company, a subsidiary of PNSC also has a single tanker for crude oil imports. PNSC enjoyed a complete monopoly till early 1990s when the shipping sector was deregulated by the then Nawaz Sharif government.

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During my internship training I visited the following departments:

1. 2. 3. 4.

SSD DEPARTMENT COMMERCIAL DEPARTMENT MIS DEPARTMENT FINANCE DEPARTMENT

1. SSD DEPARTMENT
The function of store and supply department is to store all types of inventory in shelf through bin card system and requisite the same inventory to the workshop and on vessel. SSD department works on four (4) main heads. 1. 2. 3. 4. Stock Workshop Vessels Miscellaneous (provide technical & material support)

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The department performs all functions involved procurement through LT (lowest tender) and is charged with the custody and control of all vessels stores and spare parts placed at store. The department is responsible for the purchasing function, actually what is to be purchased and in what quantity. The overall responsibility of the SSD department is to support the material needs of the ship. To do this, supply/goods must procure, receive, inspect, store, issue, and account for general

stores, repair parts, equipage, equipment, ship’s store stock, clothing, and subsistence items. SSD department divides the inventory into 23 main groups and in various subgroups. Stock outflow is taken place into two place, (1) Ship Repaired (issue stock for the purpose of ship repairing) (2) Ship Supply (issue stock for the onboard requirement).

2. COMMERCIAL DEPARTMENT

Commercial department is like a backbone of PNSC. A large amount of revenue is generated by this department. Commercial department performs worldwide tramping and chartering operations. It also operates three Aframax tankers on regional

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routes. The company manages the following fleet of 10 multi purpose cargo ships, 03 Aframax tankers and one bulk carrier. In FY06 MV Kaghan, a bulk carrier was added to the fleet making the fleet size total of 15 vessels. The total capacity of the PNSC managed vessels has now increased from 570466 DWT to 636182 DWT. PNSC operates on two major routes namely trade area west with regular calls at Karachi, Dubai, Dammam, Abu Dhabi, Kuwait, Bander Abbas, Genoa, Marseilles, Bremen, Antwerp, Tarragona, Casablanca, East/West Africa and Brazilian ports and the other route called trade area west with regular calls at Karachi, Colombo, Singapore, Xingang, Shanghai, Yokohama, Osaka and Busan. Commercial department can be divided into three main sub departments.

2.1

Commercial/ Lines

Function of this department is to oversee the following sub departments (A)Trade Area West (B) Trade Area East

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(C)Tanker (D) Chartering

(A)

TRADE AREA WEST

Trade Area West encompasses in the following routes. Regular calls at Karachi , Dubai , Dammam , Abu Dhabi , Kuwait , Bander Abbas , Genoa , Marseilles , Bremen , Antwerp, Tarragona , Casablanca , East/ West Africa and Brazilian ports. Other ports are also called sub to inducement.

(B)

TRADE AREA EAST

Trade Area East encompasses in the following routes. Regular calls at Karachi, Colombo, Singapore, Xingang , Shanghai , Yokohama , Osaka , Busan. Other ports are also called sub to inducement.

Whenever any cargo imports &/or exports, following different mode/capacity of container are used.

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CONTAINER BY TYPE OF CAPACITY FCL ----- Full container load

To load container at his maximum level/ volume/ weight.

LCL ----- Loose container load To load container below his maximum level/ volume/ weight.

CONTAINER BY MODES OF SHIPMENT CY ----- container yard

CFS ----- container freight station

CY/CY Container Service The CY/CY (read as 'CY to CY') container service---doorto-door container service or house-to-house container service--broadly means that the whole container received by the carrier is packed at the shipper’s premises, and the delivery of that same whole container to the consignee's premises.

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CY/CFS Container Service The CY/CFS (read as 'CY to CFS') container service (doorto-port container service). The container is shipped by the shipper to the consignee in a loose form. Whole container will open at the terminal and The consignee arranges the delivery of the loose cargo from the container freight station to his/her premises.

CFS/CY Container Service The CFS/CY (read as 'CFS to CY') container service (port-todoor container service). Shipper has to make an arrangement to ship the goods to the port and the delivery of the loose cargo from the container freight station to the consignee's premises.

CFS/CFS Container Service The CFS/CFS (read as 'CFS to CFS') container service--port-to-port container service or pier-to-pier container service--broadly means that the delivery of the loose cargo to the carrier's container freight station at the port of origin is packed into the whole container, and that same whole container is

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emptied at the carrier's container freight station at the port of destination. The consignee arranges the delivery of the loose cargo from the container freight station to his/her premises.

(C)

CHARTERING / TRAMPING Worldwide tramping operations includes (a) Time charter

(b) Voyage charter

(D)

TANKER OPERATIONS PNSC operates three AFRAMAX tankers on regional routes.

2.2 OPERATON

Operation department is also can be divided into three main departments.

(A)

PORT CAPTAIN DEPARTMENT

The primary job of the port captain department is the stowage of cargo aboard ship, a complicated process explained earlier (chapter 9). The position of the port captain has been

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established at ports where large amounts of cargo are handled in order to expedite the turn-around of vessels in port an to assist the mates. The port captain at a particular port knows what is on the dock and committed for stowage, matters that the mates cannot know until arrival. To plan the stowage, the port captain should know very well the information regarding items b o o k e d , t h e i r p o r t s o f destination, their weight and stowed tonnage, and the type of stowage required.

(B)

CONTAINER LOGISTIC

Key functions of container logistic department are: Generate revenue and claim no expense towards the container service. Lease out the container.

Performs custom department formalities. Performs stuffing/destuffing. Slot charter vessels.

Facilitate own department in different location (Hulledge)

Container logistic department transports container worldwide in different type of technology such as:

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Bulk Cargo In bulk cargo whole cargo is loaded openly without any special arrangement. E.g. Wheat, rice, cotton and fertilizers are loaded in bulk and openly.

Break Bulk Cargo: In break bulk cargo technology cargo ships replace bulk cargos. In cargo ships cargo is loaded in different sections (break bulk cargo) in bulk. E.g. cargo is loaded in different sections like cotton bails, industrial raw material and raw iron. All material is loaded in packing of cartons.

Containerization: Most recent mode of transportation stared in early 70s available in different sizes. 20 feet and 40 feet containers are most widely accepted size. Ship size is measured in TEU and DWT.

(C) IMPORT & EXPORT DEPARTMENT.

Export unit is responsible for the shipping papers required for export; in the import unit, for the documents required in importing. In import & Export some documents are very

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important, these documents includes t h e b i l l o f l a d i n g , permission from custom, SBP, mat receipt & manifest etc.

2.3

BILLS DEPARTMENT:

Bills department procures certification of freight invoices, arrange for surrender of bills of lading, and facilitate collection & payment of freight. Freight revenue arises from revenue tons determined by the weights and measures of cargo and the dock. The tonnage and rates are entered on bills of lading issued for the given voyage. The freight cashier is required within a short period to account for all moneys indicated on the manifest as collectible from shippers or consignee at his port of the voyage in question. One the other hand bills departments concerns with the accounts payable, trade accounts payable are rather closely current, that no trade accounts payable ledgers of the usual types are maintained by the unpaid invoices.

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3. MIS DEPARTMENT
MIS department o f P N S C a s s i s t o v e r a l l a l l d i f f e r e n t departments in many aspect. This department provides a bridge through which all departments interact with each other. It monitors information system and keep up to date all data base through online transaction process (inside PNSC) and in some area with batch processing (outside PNSC such as ship in transit). Management information system section prepares the Trail Balance via the posting of journal voucher through coding that made in computer system by using the SES OFFICE software. MIS section receives J V f r o m SSD department, Commercial Department, Finance Department, Tax Department and post it in specific code, these posting adjust in trail balance automatically from programming. Every section has coding system. They post these vouchers by using these coding systems. Basic SES OFFICE converts it in to Trial Balance by using these codes in specific heads. MIS department also runs Score Card. Score Card is very important software that records each and every thing either relates inside

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t h e P N S C o r o u t s i d e . I t provides very important updated information to Executive level officer including directors and chairman etc in order they can make timely decision. MIS department also provides the facility of programming. In addition, MIS department gives technical assistant to all the departments if they encounter with any system troubleshooting either hardware problem or software problem.

4. FINANCE DEPARTMENT
Finance department is responsible to manage and allocate the fund. Find the resources of obtaining fund and makes the best possible strategy to invest those funds in order to get optimum return t hat covers your cost of capital and provide future benefits. It is also responsible for the overall direction and policy implementation. It is also responsible for coordination of the Finance Department, which includes budgeting, accounting, purchasing and treasury functions. The Finance department also provides financial advice to the top level of management.

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Accounting section within finance department maintains the accounting system, the payroll system, the fixed asset system, reconciles bank accounts, and prepares various financial reports. The Treasury Section provides centralized cashiering, collection, collects all receivables, and audits various tax sources for compliance. Finance department also prepares Annual Budget. T h e Purchasing unit procures all services, supplies, and equipment for all departments of the PNSC, and surpluses items no longer needed by the PNSC.

SWOT ANALYSIS

S: W: O: T:

STRENGHT (relates internal environment) WEAKNESS (relates internal environment) OPPORTUNITY (relates external environment) THREAT (relates external environment)

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STRENGTH A large capital investment Worldwide operation Skilled labor/employees Having its own ships/vessels Both marketing policy (skimming & penetrating)

WEAKNESS Over staff organization Lack of coordination between different departments Lack of proper planning and absence of coordination with other shipping companies A bias policy of management towards the selected staff Low level skill staff.

OPPORTUNITY Lucrative strategic geographic location Being a national flag carrier approximately 99% government base organization hire PNSC services for their shipment

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THREATS Limited amounts of import and export due to financial crunch in Pakistan High charges as compare to other shipping companies worldwide High duty and taxes from the government Dilapidated vessels.

Conclusion
For as long as one remembers, private sector is not allowed to play any part in the shipping sector which enjoyed absolute public sector monopoly. The number of vessels and Dead Weight Tonnage (DWD) of the PNSC fleet has been on continuous decline over the years. Today PNSC fleet comprises just 19 vessels less than onefourth its fleet strength two-decades-and half ago. The break bulk vessels have long past their economic lives. the average age being over 18 years. Ships and all floating crafts purchased or bareboat chartered by a Pakistani entity and flying Pakistani flag will be

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exempted from payment of income tax till 2020. Instead, they will be liable to pay tonnage tax at the rate of one US dollar per gross ton per fiscal year in lieu of income tax irrespective of the earnings or whether the operator made a profit or incurred a loss. Despite enjoying absolute monopoly, PNSC has remained a financially troubled organization during the big part of its existence since it was established in 1979 when Pakistan Shipping Corporation and the National Shipping Corporation were merged. But since three to four year PNSC has improved their performance inspite of old technology. For the year ended June, 30 2008 PNSC Group achieved a turnover of Rs 10,754 million as against Rs 9,089 million last year with healthy growth in freight earnings, both dry cargo and liquid cargoes. Healthy Gross Profit of Rs 3,476 million was achieved as against Rs 2,593 million last year.

BIBLIOGRAPHY
www.pnsc.com.pk www.pakistaneconomist.com/issue1999/issue35/cover.htm http://books.google.com.pk/books” oceantransport” www.scribd.com

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