Marshall Islands Registry to keep investing in the Greek shipping market

In Interviews 12/07/2016

The Marshall Islands Registry (RMI Maritime Registry) has kept growing steadily over the course of the past year, continuing its trend of attaining No1 status among the Greek ship owning community. In an interview with Hellenic Shipping News Worldwide (www.hellenicshippingnews.com), Mr. Theofilos Xenakoudis, Director, Worldwide Business Operations, Managing Director-Piraeus, Greece, International Registries, Inc., talks about its potential, the overall trends witnessed in the shipping market and the challenges lying ahead.

In terms of performance, how did 2015 fare for the Marshall Islands Registry, compared with previous years and which were the main highlights of the year?

International Registries, Inc. and its affiliates (IRI) provide administrative and technical support to the Republic of the Marshall Islands (RMI) Maritime and Corporate Registries. The RMI Maritime Registry (the “Registry”) is the third largest registry in the world. By the end of June 2016, the RMI Registry achieved significant fleet and service expansion and stood at more than 133 million gross tons (GT) and over 3,860 vessels.

As noted in the January 2016 issue of Clarksons Research’s World Fleet Monitor (Volume 7 No. 1), the Registry had a 12.5% increase in GT in 2015, the largest percentage growth of any of the top ten registries, with the youngest overall fleet age of 7.9 years. This growth is attributed in great part to IRI’s model of decentralization, which allows worldwide Registry personnel to provide quality services 24/7 from its 27 office locations. In late 2015, IRI opened their 27th worldwide office in Manila, Philippines, a major center for seafarers sailing on RMI flagged vessels. With the opening of IRI’s Manila office, the RMI Registry is better able to support the growing number of seafarer applications for those serving on RMI flagged vessels. More than 35% of RMI Seafarer’s Identification and Record Books (SIRBs) are issued to Philippine seafarers, making IRI’s Manila office a key location for issuing seafarers documentation.

Based on its overall quality and continuing compliance with port State control (PSC) activities during 2015, the RMI will continue on the United States (US) Coast Guard’s (USCG’s) Qualship 21 roster for the year 2016, making this the 12th consecutive year the RMI will hold this recognition. The RMI is the only one of the top three flag states that holds such Qualship 21 status, recognizing the RMI’s commitment to safety and quality.

Have you managed to increase your share among the Greek shipping market? Which were the most notable additions?

The Greek office’s strong long-standing relationship with Greek shipowners contributes greatly to the expansion of the Registry since the largest percentage of the RMI fleet derives from the Greek shipping community. According to the Shipping & Finance July 2016 issue, the RMI flag holds the top position for the Greek merchant fleet in terms of number of vessels and is now the largest foreign flag overall in Greece.

Greek owners and operators are an integral force behind the rapid growth the Registry has seen in recent years. Greek shipowners have been the largest shipowning group in the RMI Registry in terms of gross tonnage since 2009. By 2012, bulk carriers outnumbered tankers in the RMI fleet, largely due to the growth of dry cargo vessels owned by Greek shipowners. Today, dry cargo vessels remain the number one vessel type in the Registry, with Greek owners representing nearly 40% of the bulk carriers registered in 2015.

With personnel in IRI’s Piraeus office outnumbering all offices with the exception of IRI’s headquarters in Reston, Virginia, the amount of IRI staff outside of the US has surpassed those in the US. The highly experienced and qualified maritime experts provide Greek shipowners and operators with quality service regarding any operations or technical maritime matter.

Have you noticed a specific trend among the Greek ship owners over the past few months, in terms of leaving the Greek Registry as a result of fears of higher taxation? Do you think that we’ll witness Greek shipping companies exiting the local market, in search of friendlier business environments? Where does the Marshall Islands Registry stand among the Greek ship owners base, compared to other registries?

A major concern for the future of the Greek shipping industry remaining in its homeland is whether Greece can maintain a stable environment for business, particularly with respect to taxation. Posidonia took place successfully last month and the overall sentiment was positive about the future. Greece has a great opportunity to become a significant maritime cluster because of the expertise and long-standing experience of maritime personnel. The Registry will continue to invest in the Greek market by ensuring adequate resources are in place in order to meet the increasing demand for prompt and quality service. Communication and customer service have historically been hallmarks of the Registry and have contributed to the increase in Greek owners flagging their vessels in the RMI. The quality and timely service provided by a flag State is a vital component to the success of the Greek fleet. That’s why the RMI flag became the top foreign flag in Greece in a short period of time.

Since the start of 2016, newbuilding ordering activity globally has slumped exponentially, as owners have adopted a more conservative approach amid a crisis in the dry bulk and container segments. How do you expect this lull to impact new additions to the registry in the coming years?

Irrespective of the growing challenges faced by the global maritime industry, the Registry has surpassed another significant fleet milestone, exceeding 133 million GT at the end of June 2016. In early 2014, the RMI Registry celebrated the milestone of 100 million GT, marking the tremendous growth of the Registry in recent years.

The RMI Registry has continued to see an influx in newbuilding registrations. In the first quarter of 2016, over 9 million GT entered the Registry with 72% of the new registrations being newbuilds. This is a 2% increase from the same time period the previous year. Eleven percent of the newbuilds that entered the RMI Registry through March 2016 were Greek owned vessels. However, and as a result of the extensive network of Registry’s offices, worldwide maritime experts, exceptional service and recognized quality, the Registry expects further growth also from ships trading at the second hand market.

According to shipowners, a registry must be fast in its processes and offer the highest possible freedom when it comes to crew compositions. How does Marshall Islands fare in this area and how would you say you have evolved as a registry over the years?

The RMI does not restrict the nationality of seafarers serving on RMI flagged vessels. This allows operators the flexibility to choose the most appropriate seafarers and officers. Each crew member on an RMI flagged vessel must hold an RMI SIRB. One of the areas in which the RMI has developed non-bureaucratic procedures involves seafarer documentation. As a service to the international maritime industry, the RMI Registry provides an online officer/seafarer database that may be searched by maritime authorities, shipowners/operators, and crewing agents to verify the validity of RMI seafarer certificates. This highly secure, web-based external application system enables applications for seafarer documentation to be uploaded with supporting information and reviewed electronically, providing quick and accessible service to clients and eliminating heavy amounts of paperwork. IRI has proven itself capable of simplifying procedures so that documentation is processed swiftly. Clients appreciate the RMI Registry’s efforts to minimize bureaucracy, while at the same time maintaining quality service.

Which are the main regulatory changes which ship owners have to take into account moving forward?

One of the major challenges for the shipping community is the increasingly stringent international regulatory environment, in respect to crucial matters such as shipping emissions. The International Maritime Organization (IMO) plays the key role in the international regulatory framework and encourages harmonization and coordination of PSC activities. The RMI has an active delegation at the IMO, and maintains a significant role in the shaping of future regulations, particularly with respect to international regulations regarding the condition of ships, ships’ equipment, and operation standards. With an assigned permanent representative to the IMO, the RMI participates in all major committee and subcommittee meetings, handling leading industry concerns. The RMI Maritime Administrator’s technical team ensures that IMO codes and conventions are carried out to the fullest extent practicable by RMI flagged vessels. The RMI is a signatory to and enforces all major conventions and their related codes. IRI has been increasing its technical experts in its 27 offices available to owners and operators worldwide to support the Registry’s growth.

Nikos Roussanoglou, Hellenic Shipping News Worldwide