Chairman's Synthesis




[as of July 2005]


Royal Association
of Netherlands' Shipowners


Lloyd's List




For sponsoring opportunities for this conference, please contact

Ms. Ruth Dalgethy
tel: +31 10 281 06 55

conference committee:

Peter Swift
Managing Director INTERTANKO

Roger Holt
Managing Director INTERCARGO

Paul Markidis
Director Oil Companies International Marine Forum (OCIMF)

Marianne Lie
Managing Director Norwegian Shipowners Association

Arthur Bowring
Director, Hong Kong Shipowners Association

Ugo Salerno

Henk Merkus
Deputy Head, Division for MaritimeTransport,
Dutch Ministry of Transport

David Row
Divisional Manager, Shipping Policy, Department for Transport, UK

Rear Admiral Robert C. North,
U. S. Coast Guard (Ret.)
President, North Star Maritime, Inc.

Nathalie Soisson
Transport Safety Group Coordinator, Total

Ioannis Kourmantzis
Senior -Vice -President
Regional Manager for
Maritime South Europe, DNV

Philippe Boisson
Communication Director
Bureau Veritas

Peter van Agtmaal
Managing Director, Royal Association of Netherlands’ Shipowners

Nicolette van der Jagt
Secretary General
European Shippers' Council

Alfons Gunier
Secretary General, European Community shipowners Association

Niels Bjørn Mortensen
Senior Manager, BIMCO

Gianfranco Damilano

Michael Grey
Commentator, Lloyd’s List,
Conference Chairman

Jannis Kostoulas
Managing Director, Mare Forum

Mare Forum 2005
Shipping in a Responsible Society
 Quo Vadis?

12 &13 September 2005

Hilton hotel Cavalieri
Rome - italy

Mare Forum 2005 Rome 12-13 September

Chairman’s synthesis

Shipping in a Responsible Society - Quo Vadis?

A record number of both sessions and speakers characterised Mare Forum 2005, which was designed to provide a comprehensive “progress report” on the central theme of ship quality, along with a range of associated peripherals affecting both the shipping industry and those who regulate it. The quality shipping debate which began with high level participants in the 1990s developed the concept of the “chain of responsibility” and in Rome, all links in that chain were fully represented, a measure, in itself, of progress that has been made. The account summarises the two day event, with due apologies to those who feel that their important contributions have been diminished or ignored.

Setting the scene

The debate has advanced a long way from the early emphasis on outlawing sub-standard ships and circular arguments upon what is meant by “quality” . Themes explored by keynote speakers ranged over issues of corporate social responsibility, governance, introduced by Mr Ugo Salerno and the need to satisfy the aspirations of a wide range of stakeholders which went far beyond those immediately concerned with the ship and her voyage. An industry which cared about wider social responsibility was also one which was by definition, highly professional and focussed on providing the precise logistic service demanded by customers, who themselves cared about their own social responsibilities for sustainability and reputation, in a virtuous circle.

But such an industry, as suggested by Mr Nicola Coccia, needed to acquire an identity and a good public image, which itself required proper promotion and enhanced transparency. So the theme of visibility and what others thought about the shipping industry was soon introduced and was one that permeated the whole meeting, virtually from beginning to end. Ministerial speakers all emphasised the issues of visibility and image. Italian minister Mario Tassone provided examples of how shipping might be promoted in the Mediterranean, because it was necessary to rebalance transport modes which had become over-reliant on road haulage , with its attendant congestion. UK Minister Stephen Ladyman suggested that this awarness and visibility bore strongly upon our committment to direct participation in a European shipping industry, rather than leaving the industry to those who might be able to do it cheaper. There was a downside to merely stepping back and becoming customers of others in marine transport.

The Dutch Minister Mrs Karla Peijs suggested that innovation and efficient use of transport were keys to a continued European presence in this industry , along with highly professional people operating in a sustainable fashion. She urged progress to improve the industry’s green credentials, which were , notably in the area of emissions and recycling, falling behind that demanded by modern societies.

High technology and innovation were clearly keys to the continued prosperity of the industry, although major shipbuilder Mr Corrado Antonini was concerned about regulatory fragmentation and the need for an international regulatory approach . He also worried about the way in which pressure was building in costs in a fiercely competitive industry , and the way in which this might impact upon the development of the more robust and better quality ships which were demanded. There was also need, he suggested, for regulators to focus rather more upon maintenance, which bore so strongly upon the ultimate quality of a shipping operation.

The need for an industry to be rather prouder of its achievements was the strong message of Mr Robert Somerville, who pointed to the unarguable statistical proofs of progress and improvement attributable to an industry that does not enjoy the credit it deserves for what it delivers to the world. Lay hold of such facts and let them be known more widely - was his recipe for dealing with those who seized upon the tiny incidence of loss or damage and made this the unwarranted story of shipping. Mr Guiseppe Bottiglieri emphasised the importance of owners being in the forefront of technical innovation, and broadened what had been a somewhat Eurocentric debate to encompass the great Chinese engine room pumping away on the other side of the world, and accounting for so much of the present maritime prosperity.

Freedom of the seas

The political and practical imperatives of regulation were dealt with in a session which asked whether regionalism could coexist with an international industry and an effective international regulatory regime, albeit one which was undeniably eroding traditional freedoms of the sea. The old order is changing , we have the anxieties and rights of coastal states to satisfy over issues which go far beyond navigation, to protection of the environment and security. But could regional regulation , as was suggested by Mr Fotis Karamitsos, not “add value” to international regulations, by sharpening up their implementation, for a start. Did not the EU produce harmonised and timely implementation of international regulations?

Or was the spread of regionalism, as pointed out by Mr Bill Gallacher, merely a recipe for bedlam? He suggested that positive public awareness of the shipping industry was growing, not least because of IPOs being publicised in city pages. And even negatives, like the aftermath of Hurricane Katrina , point to the importance of tankers , when fuel prices soared.

Crossing the whole spectrum of regulatory responsibility was the US Coast Guard and a synopsis of its current activity from Rear Admiral Thomas Gilmour was presented by Adm. Robert North. And once again there was a return to the importance of shipping to the global economy, in an integration of transport, trade and production as evidenced by Dr Hans Payer. Here were facts which could be laid hold of, by those wishing to inform the wider world about shipping in an era of fundamental change, when globalised existed because of precise and efficient shipping. He offered positive predictions for the future , as world trade, which itself generated demand for ships, increased.

There was considerable debate about the practicality of regulation, acknowledging the facts that politics (which drove regulation) tended to be local. But regulation also needs to be practical and “fit for purpose” while it is required to be “road tested” for the impact it would make. But there were reminders that regulation was a burden, and there was a desperate need to reduce “red tape”, something which had yet to manifest itself.

And above all was the absolute need for it to be international , a “coherent global shipping policy” for a global industry. Could regionalism coexist with an international industry ? With difficulty it seemed, although there was surely a case to be answered where “freedoms of the seas” impinged upon local sensibilities , as with pilotless tankers in the Danish Straits.

The search for quality shipping

Several Mare Forums have tackled the issue of the poorly performing flag state and Mr Brian Wadsworth suggested that regulators themselves need to justify what it is they do. There was the “power of a good example” provided by an efficient flag state , and the issue of reputation, which drove improvement to be considered. Audits it was suggested, have proved practical in trials , will become mandatory, and will attract good operators to efficient and well regarded registries, while such operators themselves will be rewarded by their association with the good flag.

The substandard ship remained a problem, said Mr Philip Embiricos, noting its ability for bending the rules, saving costs and competing unfairly. It was only by markedly raising the costs of this marginal tonnage that improvements would be made. The derogation of supervision by the state is a negative thing, said Senator Henri de Richment, who advocated national flag shipping , properly supervised, by a responsible state.

The vulnerabilities of class was explored by Mr Philippe Boisson, who pointed to the false public perceptions of what it is that class does, but which also explained why class was invariably blamed after an incident. Unlimited liabilities which could bankrupt a society would bring in their wake a huge increase in fees and a vast defensive bureaucracy. But there were plenty of other risks in 21st century shipping, which demanded management through risk reduction strategies. Others were less easy to either predict or defend against without the assistance of government, such as terrorists, pirates or security threats of various kinds, which range from hostage taking to more traditional villainy, all of which was , said Ineke Hamming, “not acceptable in the 21st century “ and which deserved much more public awareness.

The search for greener shipping

The conference considered the ultimate responsibility for environmentally friendly design, considering the through life of the ship from cradle to grave, or design stage to demolition. Companies could anticipate regulation with voluntary action, and minimise the use of hazardous materials. said Bob Smart. Treatment of existing ships, however, neeeded to be realistic.

Health and the environment were powerful drivers now pressurising the shipping industry, said William de Ruyter , who suggested that the shipping industry, “a big polluter in its field” , needed to follow industries like the petrochemical sector which had moved far to control its emissions. Action in this area, he said, could do much for the industry’s image. For its part, the European Maritime Safety Agency would be helping the industry with its own audit of port reception facilities, and would welcome reports about their adequacy.

There was a place for advanced technology , said Michele Sferrazza, who showed how the Aliswath project vessel, produced speed and efficiency through advanced hull design which reduced wash and other undesirable effects . Franco Porcellacchia explained how a large cruise ship could make as small an environmental impact as possible, through design, specialist personnel and reputation, which brought its own commercial reward.

The all-important human element

The human element strays into virtually every Mare Forum session, and this meeting was no exception, with perhaps the realisation that “people” factors are pressing in on the industry, with its demographic problems afloat and ashore, problems of sourcing and doubts about training and education. “Who are the people on our floating factories?” asked Mr Rajaesh Bajpaee, “what do we know about them?” Is the industry attracting the best and brightest? The availability of European seafarers was considered, as were the consequences, should Europe prove ineffective at attracting sufficient recruits. New EU legislation will not criminalise seafarers, asserted MEP Corien Wortmann-Kool , but broaden accountability and liabilities.

Such a view was not shared by shipmanager Roberto Giorgi, who worried about the scapegoating of seafarers, and aggressive measures actually proving counter-productive , in preventing people reporting non-conformities. “Seafarers must know that we respect them” he asserted, pointing out that there was a need to treat them as part of the maritime security chain, rather than potential terrorists.

But would there be sufficient numbers of them? Niels Bjørn Mortensen previewed the BIMCO/ISF manpower analysis , suggesting that the preliminary results indicated that the pattern of labour supply and demand would be far more complex than hitherto, when the report is published in November. And as for the type of person the industry needs, it would appear, suggested Umberto d’Amato, that both practical and intellectually sound people , with sea experience and university education, would be required for our complex and sophisticated industry. Once again, the image intruded, because the public perception of shipping is important in any consideration of its career opportunities. There was also a need to be realistic, if we were hoping to advance the careers of Europeans, with the present reluctance to employ EU junior officers regarded as a major problem.

The dash for short sea shipping

Optimism and pessimism competed for honours in a serious debate about this market sector, which, it was hoped might address the problems of landside congestion. Filip Beckers, who has current experience as a shipper showed that SSS could be attractive as a realistic option, but the sector was fighting for market share against ever cheaper road haulage, using east European drivers and who were competing aggressively.

Professor Harilaos Psaraftis worried that all the schemes that had been devised by the European Commission were failing to address the problems of an overaged fleet which was still losing market share to road, which was growing faster. A more energetic strategy would set measurement goals , provide adequate resources , modernise the fleet and remove the bureaucratic obstacles which still added to the cost and complexity of shipping operations, and scarcely affected road haulage.

There is concern that too many new sea routes are not sustained , that the level of intervention is insufficient, and that even in the Mediterranean, where there have been spectacular gains on the “maritime motorways “ promoted by the Commission, load factors are still too low. Incentives for truckers to use ships rather than the road could make a difference.

The shipping markets

The boom times in the shipping markets “were not dead yet” , said Martin Stopford, whose comprehensive tour through the supply and demand for ships still showed good earnings , a tight supply/demand situation, the continued effect of China and “wild cards “ such as hurricanes and political problems intervening on the world shipping stage. Worth considering that owners are players again, after many years as humble supplicants . But timing was still crucial , surpluses were growing in a cumulative fashion, and 2007-8 could usher in a difficult period.

Antonio Zachello , in considering tanker prospects similarly saw storms ahead , that would drive further consolidation . Bote de Vries saw increasingly sophisticated ways of investing in ships , although banks worried about dropping loan levels with cash-rich owners needing to borrow less. Others were concerned about the possible volatility of China , which had become so important to the rest of the world , and whether conservation driven by high priced energy will depress ship demand.

Money matters

Sessions on investments in liquid and dry bulk and the position of banks and shippers revealed a wide variety in financial products , from the now traditional long term investors within the German KG system, to IPOs and mezzanine finance , “the only alternative to the debt markets”. Finance was also “subject to fashion , its products driven by competition and demand, and the perceptions, at any one time of the shipping industry. Today, shipping was very much in the public arena, witness the number of IPOs although opinion within the industry is still divided as to whether it is “ready to go public”. Many traditional owners, with long term relationships with their bankers , would never consider such a strategy, worried about the loss of control they imagine would result.

Bankers, it is said, “are always willing to finance good shipowners”. Here too the issue of image cannot be avoided. If hapless investors lose their shirts when a shipping investment goes down, is the reputation of the shipping industry enhanced? Or will shipping be seen as little more than a collection of pirates, as were the dot-com entrepreneurs after the bubble burst?

Are banks an influence upon improvements in safety and quality? They are certainly part of the quality chain , and while those who financed a sub-standard ship might escape the opprobrium reserved for other players involved, they have, says Gust Biesbroeck, some limited scope to influence matters.

Image again

So to the final session, providing interactivity on the industry’s image. There is no shortage of ideas and people seem far from resigned to being in an industry with no hope for an image enhancement. Paul Slater introduced the Martitime Industry Foundation, a new educational tool that the whole of world shipping can feed into to ensure that better information about this most essential industry is made available to students, educators, researchers or the media.

Fotis Karamitsos urged less negativity towards regulators and the public , less opacity, more investment in the corporate image and an end to secrecy and protection. Delegates were urged by Julian Bray, and indeed others, to relate to media folk and not shoot the messengers. There was some encouragement taken from the increasing interest in improving the image of the industry, which was seen as important, and not, as was once the case, irrelevant.

Conclusions and recommendations -

The following eight points seemed to suggest themselves from this marathon meeting , which might be worthy of further consideration. They are offered as mere suggestions of industry “needs” , rather than policy proposals!

1. We need a collaborative, rather than individual effort on the issue of image , to protect the long term future of the industry.

2. We need to explain to a wider world what shipping does , and be prouder of our industry, as part of a continuous process of awareness enhancement, rather than a “sticking plaster approach” after an accident.

3. We need to convince the regulators that their regulations are valid and relevant , that their impacts are properly tested, and that their results are practical.

4. We need to break away from a compliance culture that resists change, to one of continuous improvement and proactivity.

5. We need to promote the shipping industry as a product with a much more professional approach , using all the expertise that is available.

6. We need to value our people more, train them better, offer them security and careers and defend them against societal pressures to blame them.

7. We need to remain alert to all that is going on in China (and other regions which clearly influence world trade) and understand the scale and the problems of that country.

8. We need to encourage innovation in every field, in technology, systems and finance , in an industry which has an undeserved reputation for conservatism, but in reality is one of the world’s most innovative.

Michael Grey
Conference Chairman

16 September 2005


Commentator, Lloyd's List
Conference Chairman
Managing Director

The conference programme
To  register for the conference please click here