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Regulatory Issues in International Martime Transport

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Regulatory Issues in International Martime Transport Organisation de Coopération et de Développement Economiques Organisation for Economic Co-operation and Development __________________________________________________________________________________________ Or. Eng. DIRECTORATE FOR SCIENCE, TECHNOLOGY AND INDUSTRY DIVISION OF TRANSPORT REGULATORY ISSUES IN INTERNATIONAL MARTIME TRANSPORT Contact: Mr. Wolfgang Hübner, Head of the Division of Transport, DSTI, Tel: (33 1) 45 24 91 32 ; Fax: (33 1) 45 24 93 86 ; Internet: [email protected] Or. Eng. Or. Document complet disponible sur OLIS dans son format d’origine Complete document available on OLIS in its original format 1 Summary This report focuses on regulations governing international liner and bulk shipping. Both modes are closely linked to international trade, deriving from it their growth. Also, as a service industry to trade international shipping, which is by far the main mode of international transport of goods, has facilitated international trade and has contributed to its expansion. Total seaborne trade volume was estimated by UNCTAD to have reached 5330 million metric tons in 2000. The report discusses the web of regulatory measures that surround these two segments of the shipping industry, and which have a considerable impact on its performance. As well as reviewing administrative regulations to judge whether they meet their intended objectives efficiently and effectively, the report examines all those aspects of economic regulations that restrict entry, exit, pricing and normal commercial practices, including different forms of business organisation. However, those regulatory elements that cover competition policy as applied to liner shipping will be dealt with in a separate study to be undertaken by the OECD Secretariat Many measures that apply to maritime transport services are not part of a regulatory framework but constitute commercial practices of market operators. Both formal regulations and commercial practices (a clear distinction between them being difficult to draw at times) have existed in the liner and bulk shipping sector for a long time, and have had a considerable impact on the development of these segments of the shipping industry. The report recognises that, in spite of a multitude of regulations and practices, the liner and bulk shipping sectors appear to be less regulated than many other service sectors; particularly other transport sectors. However, there is still scope for improvements in regulatory frameworks to improve economic efficiency to serve broad public interests, and desirable reform areas are pointed out in this report. 2 REGULATORY ISSUES IN INTERNATIONAL MARITIME TRANSPORT Table of Contents OBJECTIVES, EXECUTIVE SUMMARY AND POLICY RECOMMENDATIONS ............... 6 I. SECTORAL OVERVIEW............................................................................................. 12 1. Introduction...................................................................................................................... 12 2. The liner shipping sector................................................................................................... 13 2.1. General................................................................................................................... 13 2.1.1. Fleet development/ownership........................................................................ 14 2.1.2.Growth in container trade............................................................................... 15 2.2. The organisation of the liner industry...................................................................... 15 2.2.1. Liner conferences.......................................................................................... 16 2.2.2. The UN Convention on a Code of Conduct for Liner Conferences................. 17 2.2.3. Consortia ...................................................................................................... 18 2.2.4. Strategic/global alliances............................................................................... 19 2.2.5. Agreements between conference and non-conference members ..................... 20 3. The Bulk shipping sector .................................................................................................. 20 3.1. General................................................................................................................... 20 3.1.1. Fleet development and ownership.................................................................. 21 3.1.2. Growth in dry bulk and liquid bulk trades...................................................... 22 3.1.3. Growth in LNG and LPG trades .................................................................... 24 3.2. Organisation of bulk shipping................................................................................. 24 3.2.1. Bulk shipping pools ...................................................................................... 24 3.3. Application of competition policy to the bulk sector................................................... 25 II. THE REGULATORY FRAMEWORK......................................................................... 26 1. Introduction...................................................................................................................... 26 2. Rationale for regulatory action.......................................................................................... 27 3. Regulations and practices relating to the rights and obligations of states and to safety and the protection of the environment .......................................................... 28 3.1. The Law of the Sea – rights and obligations of flag states.......................................... 28 3.2. International safety and environment regulations ...................................................... 29 3.3. National environmental and safety regulations .......................................................... 29 3.4. Flag state and port state inspections .......................................................................... 30 3.5 International labour regulations.................................................................................. 33 3 4. Other regulations and relevant practices............................................................................ 33 4.1. OECD instruments................................................................................................... 33 4.1.1. The OECD Code of Liberalisation of Current Invisible Operations (CLIO) ... 33 4.1.2. The OECD Common Shipping Principles...................................................... 34 4.2. Bilateral cargo access regulations.............................................................................. 36 4.3. Equal access agreements ........................................................................................... 36 4.4. Agreements stipulating equal rights to participate in trade movements ...................... 37 4.5. Cargo reservation...................................................................................................... 37 4.6. Registration conditions ............................................................................................. 38 4.7. Cabotage................................................................................................................... 39 4.8. National security measures........................................................................................ 41 4.9. Cargo liability regimes ............................................................................................. 42 4.10.Overall assessment..................................................................................................... 42 III. ANALYSIS OF FREIGHT RATE TRENDS ................................................................ 44 1. Introduction...................................................................................................................... 44 2. Container ship freight rates............................................................................................... 44 3. Bulk shipping freight rates................................................................................................ 48 IV. MARITIME SAFETY AND THE ENVIRONMENT ................................................... 54 1. Introduction...................................................................................................................... 54 2. Environmental protection ................................................................................................. 54 3. The cost of safety ............................................................................................................. 55 4. The cost of not maintaining safety .................................................................................... 56 4.1. Vessels casualties ..................................................................................................... 56 4.2. Seafarer fatalities ...................................................................................................... 58 4.3. Environmental costs.................................................................................................. 59 4.4. Non-oil pollution ...................................................................................................... 62 5. Summary.......................................................................................................................... 62 V. OPPORTUNITIES FOR REFORM.............................................................................
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