Tradewinds – World’s largest registry ups safety profile

(Written by Eric Martin)

20 February 2013 - The Panama flag is sitting pretty on the Paris MOU white list but its market share is falling

Efforts to boost the status of Panama’s shipping flag by pushing for a younger age profile is producing dividends but has not prevented the country from losing market share.

The Panama Registry was once on the Paris Memorandum of Understanding (MOU)’s black list but international shipping bodies now view it as having shed its negative reputation.

Not content to keep the black eye, the Panama Canal Authority (ACP) worked to climb its way up the performance ladder by culling substandard ships from the flag and improving the registration profile, after consultations with the Paris MOU.

“Now it is clearly up in the ranks of a respectable flag. It’s not among the very best but it is doing quite well,” said one source who tracks flag states.

The latest data from the Panama Maritime Authority (AMP), which runs the flag, show that just 11.3% of the flag’s new entries in the first three quarters of 2012 were older than 20 years, down from 14.1% in 2011.

Although the data does not show the latest average fleet age, the most recent numbers demonstrate continued reductions in older tonnage entering the flag’s rolls even after the country was upgraded from the Paris MOU’s grey list to the white list in 2011.

And the entry of ships younger than four years has increased, from 77.5% of the new additions in 2011 to 78.4% in the first three quarters of last year. At the end of September of 2012, Panama had more than 8,010 vessels with nearly 218 million gross tons (gt) on its books, making it still by far the world’s largest ship registry. That marked a 3.3% jump in tonnage since the same time in 2011.

Decline in market share

But its market share has declined to 20.4% from 22.6% at the end of 2009 as its tonnage growth has been sluggish compared to the likes of Liberia and the Marshall Islands.

Paris MOU secretary general Richard Schiferli tells TradeWinds that while Panamanian ships still appear on the organisation’s database of port-state control (PSC) detentions, the flag’s performance improvements continue.

“We’re very happy with that, especially because Panama is one of the largest shipping registries in the world,” he said.

But clearly, there is room for improvement.

Panama has just three negative marks on the International Chamber of Shipping (ICS)’s annual Flag-State Performance Table.

For example, the country remains on the list of flags targeted by the US Coast Guard (USCG) for safety reasons, in addition to not being on the agency’s Qualship 21 list, although the majority of flags do not meet that standard.

Panama also received a red mark for working with too many non-recognised organisations under International Maritime Resolution A.739, which sets requirements for delegating inspection and survey of ships.

Efforts to speak to AMP merchant marine head Alfonso Castillero were unsuccessful by press time.