ECONOMY

Security drives up shipping costs

During the recent Intertanko Forum in Athens, Kathimerini had the opportunity to speak to Peter Swift, managing director of Intertanko on the new conditions in tanker shipping. How has the shipping industry fared after September 11? The shipping industry could not have remained unaffected. After those events, our first concern was the safety of shipping. Proposals regarding safety measures concerning the entire spectrum of shipping are now in the final stage. Their implementation will have an impact on the tanker industry as well. Don’t forget that we are going through a recession now, which means less oil, less trade and less cargo. It’s a fact that shipowners and our members have suffered a significant drop in revenues in recent years. September 11 and the war against terrorism have led to a series of measures by Americans. What are the consequences? It’s understandable that the USA is considering new measures. However, it understands that the issue is one with a global, not regional, perspective and so it has submitted its proposals to the International Marine Organization, following the necessary international procedures, which I think is a very positive thing. The measures referred to concern the safety of vessels, their cargoes and ports. Proposals regarding cargo refer principally to containers despite the predominant concerns about petroleum or bulk cargo in general. Another issue is further training for the crew, enhancing security systems on vessels by enabling them to identify nearby ships. The IMO has already agreed to these requests for advanced information identity systems. The USA is also placing greater stress on port safety. It has suggested expanding the range of its jurisdiction to ports where their cargo is heading for. Other demands include more training and additional materials. It would be unfair for the extra costs to burden shipowners and we are prepared to deal with this. What is the European Union’s stand on this? The European Commission has given its broad support to the USA’s proposals but it has expressed concern over the US suggestion to extend its jurisdiction on safety issues to European ports. It has expressed its wish that European ports operate in an organized way with regard to the demands. The Commission is thus broadly supportive of the majority of issues on condition that the healthy competition among ports in the region not be disrupted. I have heard that Turkey is considering a new requirement for vessels passing through the Straits of Bosphorus. I’m aware of the issue and I can tell you that there have been strong doubts about it in recent weeks. It seems the Turkish authorities want to apply the new ruling to vessels 200 meters and longer which carry petroleum or dangerous cargo. They also want shipowners to submit additional documents on safety and other matters before the vessels can transport these cargoes. These measures could delay ships and add to their operational costs and in turn to the costs of cargo. Sources in the Turkish Embassy in London and the IMO, however, said these suggestions had been proposed by the Turkish maritime department and do not have the backing of the Foreign Ministry, which is in charge of Turkey’s international obligations. The maritime department is responsible for domestic matters and we know in the past decisions by various authorities are not compatible with the country’s international obligations. This is also the case now. Maybe September 11 is being used by others as an excuse for the implementation of tough measures? Maybe. One example is the Panama Canal. Recently, toll rates were increased on both legs. The first was a general increase and the second characterized as a safety charge, which we considered inexcusable. They said it was part of a package of new measures but it appears to be an opportunity to increase revenues. Turkey is giving an impression that it is using, in part, the safety issue as an excuse for new measures and this requires special attention. Are you concerned about the situation in Iraq? Iraq has the capacity for pumping 2 million barrels of oil daily, which is a significant amount if we consider the fact that 30 million barrels of oil are exported worldwide every day. It is, however, not critical. If we lose 2 million barrels, we still have reserves for 40-50 days. Given the fact that Saudi Arabia could pump some 7.5 million barrels a day and has the ability to increase this to 10 million barrels, it will take two months to reach this stage. The world has sufficient oil reserves in the short term. The impact on shipping is difficult to predict. Without a doubt, the price of oil will go up. There will be concerns about the share prices of oil companies and reluctance to use tankers in areas of conflict. So, we will see a short-term impact on the shipping industry. In the long term, regarding oil supplies and cargo, Iraq does not play such a significant role. What is the situation regarding ports of refuge for tankers? Last year we had the case of the Castor which had a leakage problem and no port would accept it. I think last year it constituted an issue for Europeans but not a priority. The European Commission is obliged to provide ports of sanctuary in all the member states. Obviously, we encourage this and we hope it will get the countries to recognize their obligations. We have raised the issue with the IMO and it is due to be discussed by the maritime safety committee. The pressure we are exerting is starting to produce results. What are your short-term objectives? What we have always wanted is a fair deal for shipowners. If we are able to secure this, then we can justify the massive expenditure that ensures the quality and good operational conditions of our vessels. These are thus our short-term, medium-term and long-term objectives. It is very important as everything, from safety to delays, burdens shipowners. We should acknowledge the fact that shipowners put their vessels and crew in danger for the benefit of their customers and consumers. In these days, when safety plays such leading role, shipowners should not shoulder the entire burden. We are talking about international terrorism, a global problem, and yet shipowners are prepared to risk vessel and crew in order to deliver a valuable cargo needed by the world. It is important that consumers, governments and regional authorities bear their share the costs.