Memorandum by the Retired Railway Officers'
Society (FUS 23)
THE FUTURE OF THE UK SHIPPING INDUSTRY
This memorandum has been written on behalf of
the Society by a member with experience of the general management
and operation of some 14 passenger and freight vessels during
the periods 1974-87 and 1993-95 and of port facilities and who
is currently involved in shipping and port projects. The writer
has also consulted colleagues involved in the shipping industry.
The five main areas of the UK shipping industry
which need to be addressed are:
1. A dramatic increase in the training of
seagoing officers (cadet training).
2. Incentives to encourage the registration
of vessels on to UK and other Category One Red Ensign flags.
3. The overhaul of the current regulatory
requirement and procedures for vessels registering on to the UK
4. A review of coastal shipping competitiveness
and in particular to see if it can achieve a transfer of freight
traffic from road to ship.
5. Investment and development of the UK inland
Responses to the Sub-Committee's terms of reference
are given below:
1. What action and partnership is required of
the industry and government to develop a sustainable, internationally
competitive shipping industry;
1.1 Whilst it has to be recognised that the
UK will never be competitive when compared against some crew options
notably from the Far East, it is argued that the quality of our
Seafarers and the quality of their training does mean that the
UK has a valuable resource in international terms. This is shown
by the fact that a majority of UK Officers are employed by companies
other than those based in the UK and on non UK Flag Ships.
1.2 With regard to ship tonnage, incentives
have to be introduced similar to those of other flag states which
will enable the Red Ensign to be marketed as a cost effective
option. The Dutch, for example, have introduced initiatives to
encourage the return of vessels to the national flag. This has
been very successful to the extent there are not the numbers of
Dutch Nationals within their industry to meet the crew manning
1.3 On the short sea trades, a level playing
field is needed so that the cabotage (reservation to a country
of traffic within its territory) operated by a number of EU and
other administrations within the coastal shipping operating sector
is preferably reciprocated or that a more vigorous attitude taken
towards the flag states which do not allow free trade.
1.4 There also needs to be a more user friendly
approach from the maritime and Coastguard Agency (MCA). Hopefully
this may happen as a result of the creation of this new organisation.
Simplified regulation and procedures are required without detracting
from the safety issues which remain paramount, and a means of
expediting enquiries is needed if ship owners are to be encouraged
to the UK National Flag.
1.5 It would be good business if the UK Government
could provide or procure funds or loans at preferential rates
of interest to improve and infrastructure of ports and their hinterland
(road, rail and inland waterways) in the way that other EU countries
appear to do.
1.6 International cargo carrying is now dominated
by a few large carriers such as Maersk, P&O Nedlloyd and Evergreen.
These companies are so large that it is hard to see how the UK
shipping industry can now re-enter the market. It is believed
that other countries (including those of the EU) subsidise their
shipping industries either directly or indirectly while the UK
has hitherto offered little incentive for companies to stay British.
2. The benefits of encouraging UK ship registration,
the extent and implications of flagging out, and the specific
position of the Isle of Man registry
2.1 It is in everyone's benefit to encourage
ship registration both in the UK and the Isle of Man. With the
benefits, of which the defence consideration is one, other positive
A major contribution to the UK's invisible earnings;
It will bring other revenue benefits;
Employment opportunities for UK Seafarers;
Opportunities for shore based associated industries;
Careers for school leavers;
2.2 With regard to "flagging out"
this was mainly brought about by the over regulation and tax burden
on UK Flag vessels. If incentives are introduced similar to other
flag states with a simplified and more user friendly approach
from the regulatory authorities, then there should be a return
to the UK Flag.
2.3 To increase UK registration more has to
be done to encourage UK ownership of ships. Bureaucracy has to
be reduced and the insistence that the UK MCA surveyors have to
carry out surveys anywhere in the world should be relaxed. Other
registries use classification societies or foreign registry administration
surveyors to act on their behalf. This reduces cost and problems
in getting a UK surveyor to the right place at the right time.
The popularity of the Red Ensign flagged out registries, such
as the Isle of Man, is a case in point.
Possibly the UK should follow Norway with its
Norwegian International Ship register (NIS) which has rebuilt
the Norwegian Fleet.
3. The contribution that shipping can make to
achieving the objectives of the Transport White Paper
3.1 The contribution that shipping can make
in achieving the objectives of the Transport White Paper are by
having a firm commitment to the operation of its vessels under
a Red Ensign accompanied with commitments to the employment and
training of quality British Officers and Ratings wherever possible.
3.2 A further contribution could be made by
opening up coastal shipping again. This will require modern, possibly
fast, cargo carriers with scheduled services, linking intermodally
by inexpensive transfer with road, inland waterways and, possibly,
rail freight services. This should not be limited to the UK and
Ireland but preferably should be EU wide.
4. Whether enough UK registered shipping is available
to fulfil the country's strategic needs and international obligations
4.1 Whether the UK has sufficient vessels of
differing capabilities to fulfil its strategic needs is questionable.
It is only by the right conditions being generated by government
that vessels will return and strategic needs and international
obligations met through the charter of national flag vessels.
4.2 There is some doubt that the UK shipping
can fulfil its strategic role. Ship chartering companies are frequently
being asked to provide tonnage on a short-term basis to move UK
troops. Hardly any UK company ever takes up the option as it rarely
has any spare tonnage. The troops are now moved in foreign vessels
notably other EU ships.
4.3 However, the international ship charter
market is such that given sufficient financial inducement a government
ought normally to be able to charter a vessel in the market.
5. The present level of employment of UK seafarers,
the effects of any present and future shortage of skilled personnel
in the shipping industry and in related on-shore industries, and
how the training and employment of UK seafers can be promoted
5.1 There is a general awareness of the present
levels and shortage of UK Officers given their employment demand
internationally. All companies within the industry must recognise
the need to increase cadet training in order to meet these demands
both at sea and to fill the large number of employment opportunities
within associated areas of the industry such as technical superintendents,
brokering and insurance.
5.2 To achieve an increase in numbers being
trained, more monies need to be injected into the SMarT (Support
for Maritime Training) scheme along with a more liberal approach
to the requirements to obtain the training subsidy. For example
the training officer should not necessarily be a UK National with
a UK Certificate, but an officer acceptable to the MCA with a
certificate reaching internationally recognised standards. The
current procedure for obtaining the training subsidies needs to
be addressed and simplified.
5.3 Market forces and governments led the industry
to be very lean and drove companies out of employing UK Seafarers
as they were and are too expensive on a world scale. However,
present salaries of UK Seafarers are low compared to national
standards and the dilemma is that this can only be solved by paying
reasonable and fair national salaries. People will not go to sea
unless they are adequately compensated. The "adventure"
attraction of the job has probably gone.
6. What the UK can learn from the experience of
other countries in dealing with similar problems, and the role
of the European Union;
6.1 The UK needs to look at the various initiatives
introduced by flag states elsewhere to encourage vessels on to
their own registers. It also needs to look at the accompanying
regulatory requirement to ensure the very best is adopted.
6.2 On coastal shipping, cabotage needs to be
addressed with the ability for any vessel of a EU country having
the ability to trade without restriction (see paragraph 1.3 above).
6.3 There should also be environmental benefits
of transferring carriage of goods from the roads to sea transport.
With an integrated transport policy, far greater benefit can be
achieved using coastal shipping in association with the inland
waterways of the UK. It is only with the commitment and partnership
of government and industry can this be achieved.
6.4 In the 1980's the writer worked with the
Tees and Hartlepool Port Authority on the study to develop coastal
shipping on the east coast between the Tees and Harwich. At the
time it did not prove economic but a number of factors have changed
such as increased road fuel duties and the possibility of road
pricing. It may now be worth revisiting the subject.
7. The role and importance of on-shore shipping
services provided in the UK, such as insurance and ship broking
7.1 The importance of the onshore shipping service
sector in supplementing UK and other ships cannot be overstated.
At the moment many of the personnel in these services are filled
by former seafaring officers whose expertise is difficult to replace.
With insufficient marine training the numbers available to fill
these vacancies will get fewer.
2 December 1998