Huge oversupply of vessels in the market is impacting the business of Shipping Corporation of India (SCI). The company said although its vessels were fully deployed, it was not getting good freight rates.

"We're witnessing plenty of ships chasing little cargo," said AK Gupta, chairman and managing director of SCI, who was here last week for an orientation programme for officers of public sector enterprises.

According to him, the public sector enterprise has not performed well this year due to weak demand and low freight rates. "The recession has gone a bit too long," he said. This is the case world over for those involved in core shipping business, he added.

For the half year ended September 30, 2013, SCI clocked a total income of Rs 2,012.46 crore, 16.4 per cent lower than Rs 2,407.42 crore it posted for the same period in 2012. Net loss for the six-month period stood at Rs 222.23 crore as against a loss of Rs 242.39 crore in the previous year.

For the fiscal 2012-13, while the total income stood at Rs 4,360.60 crore, the net loss was at Rs 114.31 crore. It is yet to announce its third quarter results this fiscal.

Internationally, freight rates in the shipping business are governed by the benchmark London-based Baltic Dry Index (BDI). It provides an assessment of the price of moving the raw materials by sea.

However, Gupta said some of the shipping players, including Mercator Lines and Essar Shipping, had been able to weather the recessionary impact by diversifying into non-core shipping segments like coal, dredgers, mobile offshore protection unit and captive cargo. In the case of SCI, it has a huge presence in the core shipping business-bulk carriers and tankers.

SCI, which has 74 vessels with a dead weight tonnage (DWT) of 5.85 mt, has placed orders for 14 vessels, including a bulk carrier, two very large container carrier, and anchor handling, towing and supply vessels, totaling 986,800 DWT.

Gupta said the PSU had no plans to place new orders for vessels as it was dependant on improvement in cash flows. "It depends on our cash flows. Whatever cash flows we have we're able to meet the working capital needs," he said.