Seascapes-World Fleet Ownership

Ownership of vessels is a concept hedged with complexities. We may think about the beneficial ownership of a ship; the company or individuals who derive the financial benefit from the operation of the ship. This may well be different to the nominal ownership , which may be a "brass plate" located in a convenient country where the ship register is open. Thus the United States, the world's biggest trading nation, "controls" the biggest merchant of merchant vessels, but most of those ships have their "nationality" elsewhere, being registered in Panama, Liberia, Bahamas or some other open register.The pattern of ship ownership has greatly changed in the past thirty or forty years. In the 1960s and 70s, the "traditional" maritime countries, which tended to be the industrialised and trading nations, owned and operated the lion's share of the world fleet. Then, over a relatively short period and during an era when the shipping industry was suffering prolonged recession, the fleets of these nations were "flagged out" to the open registers, where they could continue to compete with cheaper operating costs, largely caused by the cheaper crews their owners were able to employ.Thus between 1957 and 1997 Liberia saw its fleet increase from about 7 million tons to more than 80 million tons, while the UK saw its decrease in the same period from more than 20 million tons to less than 6 million.With regard to the companies which are involved in ship ownership and operating , this has been described as a "room with two doors" with people entering and leaving, but with roughly the same number of people in the room at any one time. Shipping as an industry is traditionally regarded relatively easy to join; with ship ownership divisible among large numbers of investors. Admittedly some types of shipping , such as passenger shipping or that involving very expensive or sophisticated ships, are difficult to enter.Today the shipping industry, which has been fragmented among this vast number of different owners, is undergoing a period of consolidation, with mergers and acquisitions being the order of the day. This itself is a phase that has been seen before, as the whole process is somewhat cyclical, nevertheless what we are seeing today is the emergence of a smaller number of very large companies, that will be in a better position to defend freight rates, and withstand the "divide and rule" policies of the charterers or the "users" of ships.Very large companies, like Maersk-Sealand on the container front, or P&O -Princess in the passenger liners or tanker owners Frontline - or V.Ships in ship management, stand to gain from scale economies in everything from the buying of fuel or stores to the purchase of ships themselves. They are described as the "mega" shipping companies and it is suggested that fewer, larger shipping companies are the future of the industry. It may well be the case that these large lines have a period of domination, but shipping history informs us that there will always be new entrants to the industry, from modest beginnings, who operate in niche markets, supplying shipping services to marginal trades that the giants do not bother with. And if world trade continues to grow , they hopefully will grow with it.

By BIMCO