Shipping is on a turbulent course

Press, 25 February 1977, Page 13

Shipping is on a turbulent course

With politics stirring muddy waters and with new moves on safety standards, the shipping industry is at present steering a turbulent course.

Western governments and shipowners are waiting for a Russian move in the dispute sparked by the unprecedented growth of some merchant fleets, largely a: the expense of the fleets of the European Economic Community countries. The E.E.C. Commission has alleged unfair competition and discrimination, particularly from communist fleets.

At present, the West is waiting to see whether Russia is indeed prepared to work more within the Conference system (there are about 300 Conferences, groupings of lines from various countries in a region to carry manufactured cargo on regular runs). If the dispute continues, it seems that the E.E.C. will move towards concerted political action to protect its own fleets. Aggravating the situation is a root probelm: the lingering recession. Over-capacity affects the shipping industry as it does world shipbuilding. With not enough cargo for too many ships there is a very large volume of idle tonnage world-wide, perhaps as much as in the 19305.

The E.E.C. merchant marine represents only 24 per cent of world fleets compared with 40 per cent in 1959. During the past 15 years, world fleets have tripled, with the bu*k of growth in the fleets of the communist countries, the developing countries, or the flags of convenience.

Shipping is vital to the E.E.C. with 90 per cent of its exports alone going by sea, yet its share of world shipping has been eaten away by others. Fleets of communist countries increased 410 per cent from 1959 to 1975, and fleets of the countries of flags of convenience by 330 oer cent.

The growth of nationalism in world shipping is fuelled by three motives: prestige, to carry their own goods in their own fleets: a justifiable desire to carry more of their own trade: and a need the world over for hard foreign exchange. The E.E.C. says that in their efforts to get a bigger share of the shipping

cake, some governments have resorted to "measures which considerably distort the conditions of competition in the traffic market” — such as flag discrimination, dumping, subsidies, tax concessions, and laxity in applying safety regulations. There is a small but growing fear in the West that the communists are using their merchant fleets to undercut the West's in a long term strategy to undermine its trading operations. The E.E.C. Commission says: “There is also a political danger. If the fleets of the communist countries should ever achieve a dominant position they could one day impose their conditions on Community countries’ trade The political, economic, and even military consequences can be imagined ” A spokesman for the General Council of British Shipping in London said. “The West does not want a confrontation. Recent meetings at commercial level in Russia 'were designed to discuss mutual problems and I think that as a result there is a greater appreciation on both sides of each other’s attitude and concern.

“The Russian shipowners indicated their support for the Conference system and the desire in principle to work within it. The hope now in the West is that there may be a fresh approach to these problems, but if it is not possible to make progress, our view is that only concerted political action can protect the interests of national fleets.”

One major move in another direction has come from the International Labour Organisation at the sixty-second (maritime) session of the International Labour Conference in Geneva, where government, sh.powner, and seafarer delegates from 78 countries agreed on an international maritime instrument giving ratifying countries the right to report on substandard working conditions on ships calling at their ports.

They will also have the right to take action to rectify conditions on the ships which are “clearly hazardous to safety and health.”

Copyright. World Feature Services, Ltd, 1976.