Growth Of The Marshall Islands Flag and American Bureau of Shipping

Marshall-Islands-Flag-Ship-RegistryPhoto by Boat Nerd

Writing this just off the deck of a newbuild in South Korea I am amazed at the market advance of two organizations, the Marshall Islands Registry and ABS. Nearly every technically advanced offshore newbuild I have recently visited (and those on the AIS tracking site) in Korean shipyards carries the MI flag and AB on the Plimsoll mark. A quick look at each organization’s recent press releases tells us the full story:

From International Registries, Inc:

The Marshall Islands Registry surpassed the 50 million gross ton mark continuing a pattern of steady growth. In less than six years, the Marshall Islands fleet has grown from 18.5 million gross tons and 626 vessels at the end of 2003 to 50 million gross tons and 2044 vessels in July 2009 reflecting an average annual growth rate of 23% in terms of gross tonnage.  The Registry, which is administered by International Registries, Inc. (IRI), attributes its success to the decentralization of registry services to its 20 worldwide offices.

The milestone was passed last week when the 11,259 gross ton newbuild tanker SONGA EMERALD, managed by Songa Ship Management of the UK, was launched at Samho Shipbuilding in Korea. “This registration, like many in the past, has really shown the true worth of our efforts towards decentralization,” observed John Ramage, Director of Worldwide Business Operations, who noted that the Registry’s London office interfaced on the paperwork side of the registration transaction, while the Registry’s Singapore office handled the closing and mortgage recordation.  The Registry’s Special Agent in Korea attended the delivery meeting and provided the vessel’s certificate of registry. “Since close to 50% of the tonnage entering the Registry is newbuilding tonnage, our offices in the Far East are often involved in the closing and attending the delivery meetings in Asia. The interface between our worldwide regional offices is critical to ensure a smooth registration process,” commented Annie Ng, Managing Director, International Registries (Far East) Limited.

The 44,067 gross ton tanker MORAY, operated by Prime Marine Management in Greece was also registered in early July. “The Greek shipping community continues to be a major contributor to the growth of the Marshall Islands Registry. The full services offered by each local Registry office enables us to conduct timely registrations and provide first class post registration services to our clients without the direct involvement of IRI’s headquarters in the United States,” remarked Theo Xenakoudis, Managing Director of IRI’s Piraeus office.

“The Marshall Islands continues to steadily move up the list of the world’s top ten open registries in terms of quality and tonnage,” IRI President Bill Gallagher said, crediting the growth not only to the Registry’s decentralization but also to its dedication to safety, post registration services and overall response time to the customer. “The Registry’s methodologies have been constantly amended and evolved to meet the ever demanding issues confronting a flag state in the modern world. Therefore, our clients are able to truly receive the support they need to keep their ships moving,” he concluded.

From the American Bureau of Shipping:

With new deliveries still flowing out of the world’s shipyards, the ABS classed fleet has breached the 150m gross tons threshold for the first time in the 147 year-old society’s history. Latest fleet statistics show the fleet as standing at 10,615 vessels, aggregating 150.67m gt. This represents an increase of more than 6.5m gt in just the first 5 months of 2009.

The milestone also cements ABS’ position as the third largest class society in terms of aggregate gross tons, although the society believes it continues to be the largest society in terms of the number of vessels and offshore units in its class.

Industry statistics also show ABS to hold the largest orderbook of new construction contracts, comprised of 3,349 vessels aggregating 64.77m gt. “With virtually no orders for new ships being placed, we expect that the orderbook will slowly contract as more ships are delivered,” said ABS Chairman and CEO Robert D. Somerville. “But the size of our orderbook promises to keep us very busy for some considerable time to come, particularly as the number of cancelled and deferred orders has remained at a manageable percentage of our total contracts.”

Somerville also noted that “The continued increase in our fleet size means that we can expect to see an associated increase in the demand for our periodic in-service surveys over the next two years and we will be prepared to move survey staff as needed from the newbuilding to the repair yards as we adjust to the changing dynamic in our activities.”

The last decade has seen a steady growth in the size of the ABS fleet, rising year-on-year from 100m gt in 1999 to its current record level. “Our success in winning the class contracts for new ships – particularly tankers, bulk carriers, gas carriers and offshore drilling and production units – has also changed the age profile of our fleet from one of the older to one of the youngest classed fleets,” Somerville added. Continue reading…

What are your thoughts on the state of classification societies and registries? What do you see as the future of their role in the maritime industry?