Hamburg, Singapore and Dubai: In so far as the structural changes in our organization is concerned, IRISL made a decision to establish regional offices in three major shipping focal points: Europe, Asia and the Middle East. Our European regional office is located in Hamburg and has jurisdiction over all European, North and South American regions; the Asian regional office will be in Singapore to cover all Far East and South East Asian sectors; and the Middle East regional office will be located in Dubai and will compass all Middle Eastern countries, India, Pakistan and the African Continent. These offices will supervise, coordinate, follow up and resolve all urgent commercial, operational and financial matters on behalf of the head office with the agents, shippers, forwarders, and local authorities. The regional office will facilitate prompt, effective and efficient working system and will eliminate one of the major difficulties existing in the communication process between Tehran and local agents. It takes prompt decision and action in all matters relating to the company’s business.
The European regional office in Hamburg has already started functioning quite successfully. In the next phase, the South East Asia regional office in Singapore will start its activities and hopefully the regional office in the Middle East will become operative subsequently.

Specialized Companies: As part of structural changes, we can refer to forming specialized companies. As a result, the activity of our container division will be established in the form of a new company which is in the final stage of formal registration and will start its function in the near future. In addition, the activities of our technical and crewing department will be under the process of becoming IRISL Ship Management Company. The same process will be applied for our bulk and break bulk departments. I hope this strategic plan will be completed within a one-year time.
To furnish and facilitate these strategic changes, we have invested in our human resources by acquiring a comprehensive training program.

In order to function successfully without relying on state funds, we have to make fundamental changes in our thinking, policies, approach and strategies.

Fleet Expansion: With regard to our fleet expansion program, the growing demand for container shipments in Iranian trade and the rapid growth in containerization universally necessitates us to increase our present container carrying capacity and we have accordingly decided to order new building of six new container vessels, each having a capacity of 2,200 TEUs. One of these vessels will be built overseas and one in Iran. The addition of these new container vessels to our fleet will enhance our container carrying capacity to 35,000 TEUs and the tonnage of IRISL’s fleet will stand at 3.2 million dead weight tons.
As we are a major bulk carrier in the region, we have already expanded our bulk cargo tonnage by acquiring six Panamax vessels and have the intention to continue the expansion of our bulk cargo fleet to enable us to carry up to 90% of the national cargoes. We are also seriously studying the feasibility of acquiring chemical tankers to enter the transportation of chemical products. We hope to increase our tonnage to about 5 million dead weight tons in the period of next three years which will provide us with the capacity to transport up to 25 million tons of cargo by our own fleet. In addition to acquiring new fleet, we have drawn up a plan for renovation and upgrading our existing tonnage, so as to have a fleet with an average age of 12 years.

The White List, Relative Success: We have made extensive efforts to attain the objectives laid down in the field of national and international maritime transportation. We have fulfilled the role assigned to us and have been relatively successful in our overall activities. Our major achievement in the current year include full compliance with the STCW 95 and enlistment of Iranian national fleet in the White List of IMO. This achievement is a source of pride both for our country and for IRISL.
But we have only achieved relative success in our activities which implies that we have not attained all that we had hoped for both in national and global transportation fields. According to available statistics, our share in the total transportation to Iran is around 60% while our target is minimum 75%. Whereas we are strong in the transportation of bulk cargoes, and relatively strong in the break bulk area, we are still behind in the container sector where our share to our own country is less than 45%. We carry less than 5% of the regional container trade and our share of break bulk cargo to the Persian Gulf states is also insignificant.
This situation is neither encouraging nor acceptable for a global shipping company as IRISL, having substantial resources and modern fleet of vessels.

Assignment for Agents: Our agents are expected to make far greater efforts to assist us increase the volume of our overall trade especially in the global arena. We expect similar strategic planning by our agents in their respective areas and would like them to set targets to be achieved. We welcome any sound proposals to achieve targets set by them as we have to show eventual profitability to our shareholders and safeguard their investment in the company. We cannot accept losses in our services. As such, we expect agents to not merely concentrate on filling of the vessels without considering the revenue and expenses of their wages. We are aware that our agents are sometimes complaining that some of their cargoes offers are being turned down by Tehran and there is a lack of interest for certain types of cargo or from certain areas. The severely competitive situation prevailing in the shipping industry should compel our agents to ensure cargoes are secure at reasonable freight levels.
It is acknowledged by us that the shipping industry is still faced with serious problems such as continuing over-tonnage, excessive competition, under-cutting freight levels to below running costs of vessels and increasing operational costs. All of these factors have exerted great pressure on the survival and profitability of shipping lines. It is therefore essential that lines and agents have to redouble their efforts not only to maintain the current share of the trade, but also to increase the lines’ share so as to enable us to operate viably with profitably. I would here draw your attention to another important issue which is fundamental to smooth operation of all shipping lines, and that is the need for factual cash-flow report reflecting prompt collection and remittances of their collected freights to the principal line.

Need for Assessment: There have been considerable developments in the shipping industry globally and domestically over the past year and there were signs of partial recovery in some segments of international transportation, especially in our region owing to a rise in international oil prices. But the recent events in the United States will undoubtedly have adverse repercussion not only in global economy, but will leave consequential effects on international maritime transportation. It is as such necessary that we jointly assess the prevailing and expected events in maritime transportation and ascertain appropriate ways to cope with the changing situation.

Aim for Global Ranking: Our basic objectives are to provide dedicated shipping services to customers and operate profitably. As a global carrier, we will not be satisfied only to being the dominant national carrier of Iran. But, we will aspire to be a ranking international shipping company. Our target is to carry minimum 75% of the total national sea-borne trade, including container, break bulk and bulk shipments. Out of these segments, our emphasis will be on the container trade which will be the dominant mode of sea transportation in the years ahead. We will also aim to increase our participation in the international maritime transportation, particularly increase our current share of participation in cross trade from less than 10% to a minimum level of 25% in the course of next year.
Our ultimate objective is to enhance our share of international transportation to 40% of our fleet capacity. Our general policies would be to achieve optimum loading on each voyage without neglecting the profitability of voyage cost to operate as a competitive carrier offering internationally accepted services in line with other major carriers and as per the prevailing market situation: to provide qualitative services to all our customers, to meet their reasonable requirements, to maintain a strong and effective relationship with shippers and forwarders and continuously strive to enhance the quality of our services in a manner that we gain the customers’ satisfaction and to develop their confidence in our organization.

Pursuit of Interests: Whilst we would participate and support the objectives and efforts of shipping conferences to create stability and increase freight levels, we will also pursue policies that would be in the best interest of the company . We would actively involve ourselves in the cross trading activities, especially in transportation for regional countries.
Our overriding strategy would be to strive aggressively, to campaign internationally, and to enhance the image of IRISL as a reliable global carrier based on our slogan: “IRISL Is Your Global Partner”.
Marketing vigorously in ports to increase our share in C&F shipment to Iran and also shifting FOB shipments of Iran to C&F shipments and at the same time aggressively pursuing for C&F shipments for non-Iranian destinations by offering services along with other international carriers are on IRISL’s agenda.
We shall consider collaboration with dominant international carriers in a specific sector of our trade. Most important of all, we shall try to remain abreast with all developments in international shipping arena, keeping pace with our competitors in all aspects of maritime transportation services.
With our large and modern fleet of ocean-going vessels and through our subsidiaries Irano-Hind and Khazar Shipping companies, we can effectively contribute to the development of north-south corridor trade.

Diversification on Agenda: IRISL should no longer be content with its ships operating from overseas ports only toward Iranian ports. But should also enhance its offshore activities and provide transportation services to its clients all over the world. In line with the country’s industrial and economic development plan, IRISL expects considerable increase in non-oil shipments to various countries.