Shipbuilding Policy

The Shipowner Perspective

Daniel Hosseus

International Chamber of Shipping

OECD Workshop

December 2009

What is ICS?

Principal international trade

association for shipowners

Represents all sectors and trades,

75% of world fleet

Membership of national shipowners’

associations from 33 nations

ICS Purpose

Representation of global shipowners

at IMO (and other international bodies

that impact on shipping)

IMO in session

in London

Growth of World Order Book

Source: Clarkson

Decline in Container Movements

Source: ELAA

Decline in container traffic: America-Europe Eastbound (Dry and Reefer)

Source: ELAA

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

Q3 2008 Q3 2009

TE

U

Order Book as % World Fleet

Source: Clarkson

Too Many Ships, Too Few Cargoes!

Avoiding Protectionism

Governments should avoid increasing

market share regardless of the

consequences!

History lesson

1970s – OPEC oil shock/recession/

reopening Suez Canal, large tankers

uneconomic

Yards slashed prices, often below cost

Switched to bulk carriers, flooded

market

Shipping took 15 years to recover

Ships Should Not be Sold Below

Cost

Meaning of ‘below cost’ difficult to

define

But danger of sophisticated vehicles

for absorbing new ships for which

there is no demand

Eliminating Subsidies

Most important – need for greater

transparency

A New OECD Shipbuilding

Agreement?

Need for normal market disciplines

Re-opening of negotiations would be

welcome

Failure of 1994 agreement

disappointing

Focus on subsidies not on prices

Maintaining Standards

IMO regulatory pressures should

encourage innovation

Designs that reduce fuel costs – and

CO2 – enlightened self interest

Ship Recycling

Surplus capacity could be converted

into ship recycling centres

Yards could seek certification under

new IMO (Hong Kong) Ship Recycling

Convention

‘Cradle to grave’ approach of IMO

Convention means shipyards have

responsibilities

Conclusion

Recession does not stop demand for

safety and environmental

improvements

New OECD agreement would be

welcome

Need for more transparency with

shipbuilding policy

Thank you

For more information visit

www.marisec.org