Ship Registration and Classification Learning (chapter 4)

Thoroughly understand the concept of ship registration and its flag state. Understand the differences between registering in the country of beneficial ownership, offshore registry and flag of convenience. Be aware of port state control. Understand the need for classification and the role of classification societies.

4 Factors affecting supply of ships

• Number of Ships

• Size of Ships

• Speed of Ships

• Time in Port

What has caused port competition to increase

• Intermodalism so one port can cover a larger area of the Hinterland

Reasons to Operate Ships

Profit, Gov Encouragement which includes:

• Conserving Foreign Exchange

• Control of trade and prestige

• Earning Foreign Exchange

• Strategic Needs

What strategic needs could be a reason to keep shipping

Need own shipbuilding industry in war time

How can having a shipping industry conserve foreign exchange

• Ships costs are normally paid in country they are flagged in

• if that is same don’t have to use foreign exchange to pay shipping costs

Earn Foreign exchange

Freight charges usually earnt in Dollars a source of forex for country’s operating their own ships.

Ship Registration

• Ship Has to register in a country and a home port to be legally recognised

What are flags of convienence and which flags are commonly used

Became too expensive to register in many countries therefore ship owners registered in countries like Panama and Liberia,

what is an open registry

An open registry is a system where a country permits foreign-owned ships to register under its flag with minimal restrictions, allowing shipowners to benefit from lower costs while the country earns revenue from registration fees.

Why would shipowner choose one flag over another

• Political reasons

• Increase labour laws in some countries e.g wages and conditions on board

• costs associated with registration itself (including Tax)

Port State Control

• shipping groups brought in to ensure the shipping rules are enforced in all areas

• divided into regions

Responsibilities covered by port state control

• Ensuring Ship Safety

• Preventing Marine Pollution

• Enhancing Security and combating Illegal activity

• Protecting Workers on port an on board

• Promoting global compliance

What body promotes crew welfare

• MLC (maritime labour convention) sets the guidelines enforced by PSC

What happens to ships that fail to reach standards

• flagged on published database and owners shamed

• Worst punishment is a complete ban from MOU

What is MOU

A Memorandum of Understanding is a non-legally binding agreement between parties that outlines their intentions and responsibilities in a cooperative arrangement, (in this case on PSC)

What governs security and combatting Illegal activity

• ISPS = international ship and port security code

• covers defense against piracy and smuggling and fake goods

Which code enforces marine pollution and what do they cover

MARPOL , ballast water, oil spills , waste treatment and harmful emissions

who ensures ship safety

International maritime organization

What is ship classification

process of a ship obtaining a certificate of quality without which it can not be insured.

How is ship classification being provided

• Provided by societies which can be government entities or commercial actors

What is offshore registry

This is a separate register set up by a country (or linked territory) that offers more flexible rules than its main registry. In order to stay competitive with open registry

How many total societies provide classification

• there are 50 that provide classification but largest and most trusted are in associations

What is the biggest association of classification societies and name 3 members and one expelled member

IACS : international association of classification societies

• Lloyd Register (LR)

• Indian Register of Shipping (IRS)

• China Classification Society (CCS)

Russian was Russian maritime Register of Shipping, known as RMRS or RS, was kicked out in 2022 after the Ukraine war.

How does a Ship maintain it’s classification

• undergoes regular surveys both drydocked and afloat

• Special Survey every 5 years where ship thoroughly examines (some extended to 7.5 years)

• Surveys and especially special surveys tend to become more strict as ship ages

What keeps track of ships and their class status, What is used to look up ships on it?

• Lloyd register can look up ship using name or IMO Number

• Shows whether class has been removed

• Note IMO number better as ship can’t hide under new name aliases

2 Key thing to note about PSC

• Target certain flags which are known to be shady

• don’t trust documents alone also check condition of the ship

What is an RO (recognised Organisation)

• Classification societies approved by the flag country that a ship is registered to

• IACS societies are approved by many

Can ship registration and classification be changed during it’s life

yes both can be changed

Cost saving potential of classification and registration

• significant for registration

• not so much more reputation for classification