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Running head: REPORT ON SHIPPING SECTOR IN OMAN
Report on Shipping Sector in Oman
Name
Institution
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REPORT ON SHIPPING SECTOR IN OMAN
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Table of Contents
Executive Summary ........................................................................................................................ 3
Introduction ..................................................................................................................................... 4
Overview of the shipping agencies ................................................................................................. 4
Current procedures to apply for a shipping agency' license in Oman............................................. 5
Challenges facing local investors to invest in shipping agencies sector in Oman .......................... 5
Factors that attract the local investors in shipping agencies' sector in Oman ................................. 7
Solutions of the challenges ............................................................................................................. 8
Conclusion ...................................................................................................................................... 9
References ..................................................................................................................................... 10
REPORT ON SHIPPING SECTOR IN OMAN
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Executive Summary
The shipping industry is one of the most evolving sectors globally. It has continued to attract
many players who have taken the world trade to greater heights. Shipping is defined as the usual
way of getting goods from one destination to another, or from one individual to another. This
mode of transport has proved to be efficient and cost-effective compared to road transport. The
shipping industry is the source of seaborne trades that accounts for more than 90 percent of
international trade. Because little is known about the shipping sector in the outside world, this
paper will focus on analyzing the shipping sector from the perspective of Oman. Evidently,
despite the many challenges faced by local investors in this field, the industry has continued to
grow at a significant rate. Toward the end of the paper, solutions for the underlying challenges
are provided, and if implemented, the industry will reap fruits. However, the essay shows that
much is needed to be done as long as this industry is to proliferate.
REPORT ON SHIPPING SECTOR IN OMAN
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Report on Shipping Sector in Oman
Introduction
Transportation is a key aspect of any economy, and it constituent many forms, including
freight transportation, road transportation, rail, and water transportation. Each of these forms is
critical as it helps in the transport of both people and goods from one destination to another.
Along this line, there is shipping that entails the transportation of items, mainly via water.
Shipping is essential as it is the usual way of getting goods from one destination to another, or
from one individual to another. Initially, shipping is associated with water transportation, but the
world has extended the term to include transport by air and land as well. According to Landen
(2015) shipping is viewed as the most cost-effective mode of transportation of commodities.
Seaborne trade accounts for more than 90 percent of the total global trade. Most importantly, this
form of transport uses seafarers to ensure trade is performed continuously without delays or loss
of commodities while on transit. Putting into account that most of the world's surface is covered
by water and countries are far apart, shipping is a justified mode of transport.
The economy of scale and industrialization, especially in Oman, has resulted in the
introduction of large ships to convey oil and other essential commodities such as raw materials in
order to keep the transportation cost low. Moreover, modern container ships are designed so that
they can transport a large number of containers with commodities to countries where they are
needed. To ensure effectiveness in the shipping industry, economies, including Oman, offer
maritime education and training (MET) (Gadhia, Kotzab & Prockl, 2011). This education and
training equip maritime personnel with the necessary knowledge and skills to handle activities in
this field. Although the owning and operation of shipping is yet to be on a meaningful scale,
Oman MET activities have made a name for the shipping industry globally. Since little is known
about the shipping industry to the outside world, an in-depth perspective of Oman's shipping
industry is presented in this paper.
Overview of the shipping agencies
A shipping agent is any individual or a business that is responsible for transacting on
behalf of ship-owner in each port the ship arrives at or docks. The shipping agencies are also
referred to as the Cargo brokers or port agents. The shipping agencies, together with a local
expert, represent the owner of the ship and conduct all crucial roles and obligations that are
needed by the crew. In most cases, the shipping agents are entrusted with caring for every need
and responsibility of the crew, including getting the mail, refilling the water and food containers,
getting local currencies as well as catering for repair in case the ship needs a major repair among
other roles that may arise. Furthermore, shipping agencies are required to ensure that all the
companies' dues are paid, and customs clearance has been processed.
At the same time, they ensure that individuals working on a contract basis are paid all
their dues after the contract has come to an end (Beškovnik, 2016). Therefore, the agency should
be up to date on all the activities and happening of a certain shipping consignment. In other
REPORT ON SHIPPING SECTOR IN OMAN
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words, the shipping agencies relieve the ship-owners of the responsibility of processing details of
the shipping consignments as the agents ensure that the entire process has been catered for. If the
shipping agents are not available, the ship-owner would be traveling from one port to the other
all over the world to ensure that all the activities are running as needed, but the process would be
running slowly. Since the shipping agencies are locally situated, they are able to process
documents and other activities on time, thus earning trust from the owner. The shipping agents
are required to understand its customers' needs and ensure they are met, thus being able to have
goodwill that enables the agent to get more clientele than others. Furthermore, they are well
conversant with the rules and regulations of a country, thus being able to process all papers that
are needed by the time the ship is docking.
Current procedures to apply for a shipping agency' license in Oman
When a person wants to apply for a shipping agency license in Oman, there is a
procedure that they must follow. At the same time, there are requirements that a person must
fulfill before the license is granted. The first step to write an application that indicates the name
and location of the company and all the other activities that the company undertakes. Then, a
person fills the license application form that should be submitted together with a copy of
commercial registration document and a copy of the identification card or passport of the
applicant, Bank certificate, A copy of the lease or title of deeds and approval on the CR on the
proposed trade names. The application letter and the attached copies are then subjected to several
ministries and different bodies that approve each of them (Lundberg, 2015). For shipping
agency, the documents are vetted by the Ministry of transport and communication, Ministry of
Environment and climate affairs, Ministry of Regional Municipalities Muscat Municipality,
Royal Oman police and Environment, and water resources. Lastly, the business should prove that
it has a rescue team who are well conversant with marine rescue and first aid, and the Captain
must possess the Professional Association Instructors Certificate (PADI). The license is issued
after paying the license fee (OMR 200).
Challenges facing local investors to invest in shipping agencies sector in Oman
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