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29 November 2021 The on-line newspaper devoted to the world of transports 15:00 GMT+1

Levelling the seas

Shipping has always cultivated its distance from other industries, no doubt due to the fact that it ignored national frontiers even before the present lines were drawn on the map. Ships have always conjured up the sense of adventure, risk, possibilities of rapid fortune and conquests in every sort of commerce.

At the dawn of the third millennium, the world of shipping is seeking a proper recognition and appreciation for its fundamental role in the development of international trade. No longer a domain unto itself, the sector is in the midst of a sea of change, in an age when marine transport is under the ever-increasing pressures of the media, public opinion, international organisations, national and international policy makers. The commercial environment, in fact, is creating new pressures, compelling evolution through mergers and consolidations and integrating the shipping industry ever more closely with other sectors worldwide.

Safety first

Our Western society has reached zero tolerance for ecological accidents, and while one has the right to complain that an oil soaked seabird gets more media exposure than a list of third-world seafarers who perishes at sea, the fact remains that companies transporting, or just simply owning, possible polluting cargoes, must develop a "crisis management" plan and keep it on the desktop, ready for deployment. Communication skills must be learned by the shippers and owners of possible pollutants if they want to manage perceptions and protect their commercial image.

The debate on safety and the prevention of accidents has led to a fundamental change in the attitudes of operators. This discussion is no longer between a few shipowners and isolated policy makers. Safety is now a major concern shared by the entire maritime community.

Politicians, always prompt to react to public opinion, have been quick to introduce both in France and throughout the European Union a raft of legislation along with increased controls in European ports. The maritime industry is now compelled to participate, and take care that as professionals they maintain an active role in preventing short term solutions crafted by politicians seeking the favour of public opinion, or remedies based on unproven technology.

The imposition of double-hulled vessels is a perfect example of an uncertain technological solution. There is still lively debate on whether or not double-hulls makes the transportation of petroleum products any safer. Owners, managers, classification societies as well as port state control, will all have to pay particular attention as these double-hulled tankers advance in age.

In any event the advanced elimination of single-hulled tankers will at least contribute to the modernisation of the global tanker fleet, and can only have a positive impact on safety over the short and medium term.


The idea of "unfair" competition surfaced during the year in the shipbuilding sector. The question was raised by the European Commission at the request of some EU nations. In contrast to the situation of the early nineties when European shipbuilding was in the midst of massive restructuring and downsizing, today’s complaints come at a time of success, due in part to a competitive euro exchange rate but primarily as a result of the rationalised management achieving greater productivity by shipyards coupled with an increased specialisation on higher value niche markets.

Up to now the Commission’s investigations are far from complete, but irrespective of the ultimate results one can question the appropriateness of this action launched by an industry which itself was well supported by generous subsidies over many years. It has been observed by some, that the complaints of "unfair" competition are motivated simply as a late reaction to the European Union finally ending shipbuilding subsidies. The cries of "unfair" are reminiscent of the ex-smokers who become the strongest critics of those who still puff.

A major factor in the distortion of competition between the European shipbuilders and their Korean counterparts is to be found in the violent swings in exchange rates, a factor originating well beyond the realms of shipbuilding, but which merits a useful remedy being sought. Bear in mind that it was not long ago that currency devaluation was part of the industrial competition policy of some European nations. Unilateral devaluation helped certain European shipyards fill their orderbooks at one time or another. Without a doubt there are other factors, not always transparent, that have equally contributed to the emergence of Korea as a strong competitor. But is European shipbuilding industry in a position to preach a liberal attitude and entitled to rail against the possible support given to others, after years of being subsidised itself ?


The challenges of the "new economy" have not left the world of shipping unscathed. After overcoming an initial streak of conservative scepticism, the maritime industry quickly adapted the Internet’s new tools, with entrepreneurs emerging from the ranks of owners, brokers, bankers and charterers to contribute finance, innovation and demand for developing new systems. The initial vacuum was quickly filled by a wide variety of "federated sites" and other "market platforms". The unbridled enthusiasm that existed even up to few months ago has now given way to more calculated considerations, showing that the principles of the old economy have not been forgotten by the financial markets.

The question remains as to which economic model should be established for the electronic commerce of the maritime industry, a part of which is certainly destined to be conducted "virtually" over the "net". Will we see one immense exchange open to all where the majority of transactions take place, or a series of boutiques run by select or established cliques ? What will be the resistance from existing special interests, and who will add value, when and why ? The coming year may not bring answers to all these questions, but the continued survival of different business models testifies to the diverse needs that the "real" world imposes on the various players in the shipping industry.

For years, the shipping community has been searching for a means by which to monitor, measure and evaluate efficiently its activities. Having failed to find satisfactory self imposed mechanisms, the shipping industry is slowly having to accept standards and systems imposed from outside.

A favourable environment of high freight rates and fully-booked newbuilding capacity in a buoyant global economy have greeted these most recent evolutions, making it easier for the maritime market participants to incorporate these changes. However, each player knows from experience that the impact of the unpredictable price of oil, and the slowing down, softly so far, of the American economy along, with the level of the world’s newbuilding orderbook, are forces and influences that will dictate tomorrow’s maritime markets and rates.

The challenge of change is unavoidable. From the beginning of time, watching the horizon has been the essence of maritime survival and the success to levelling the perils of the seas.

Shipping and Shipbuilding Markets in 2000


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