A share-out of bulk cargoes and the complete abolition of the so-called convenience flags are the two major elements in the United Nations Commission on Trade and Development (UNCTAD) secretariat’s plans to boost Third World shipping.

The secretariat wants to see the carriage of bulk cargoes, which represents around 80% of seaborne trade, distributed “equitably” between the exporting and importing nations. It is also demanding that flag of convenience registers should be frozen; that moves to create new ones should be banned; and that existing open-register fleets should be phased out.

The secretariat argues that world shipping is dominated by shipowners and transnational corporations based in a small group of developed countries. Developing nations export 61 % of world seaborne cargoes yet they own less than 8 % of the world fleet, according to the report.

“The contrast is particularly marked in the bulk trades where developing countries export 90 % of tanker cargoes and over one-third of the main dry bulk cargoes, yet own less than 6% of the world fleet of tankers and dry bulk carriers”, it says. Many developed nations appear to treat their developing trading partners as if the latter had no right to take part in the transport of bulk goods. “In fact, world bulk transport is dominated by developed market economy countries, which own no less than 90% of the world bulk fleet”. This domination over bulk shipping, claims the secretariat, is maintained through the use of flags of convenience. Developed nations, it argues, are becoming increasingly unable to supply shipboard labour. It says that a logical result of this trend might have been the transfer of investment to developing countries which could supply crews. Instead, developed nations have used flags of convenience and labour from the world’s poorer countries to maintain their control over shipping.

“In recent years, there has been a steady transfer of shipping operations from the flags of developed market-economy countries to the flags of open-registry countries to the point where a third of the world’s fleet is now sailing under flags of convenience”.

The secretariat argues that developing States have two valid grounds on which to claim increased share in world shipping:

•They are trading nations which generate cargoes.

•Their ships can operate more economically than fleets flying the flags of traditional maritime countries.

“For many developing countries, entry into bulk shipping would offer a logical avenue for industrial development since it is a direct downstream activity for those countries which serve as quarries, mines and wells for the extractive industries of developed countries”, the report suggests. It divides the bulk market into three sectors—own-account transport, open-market charters and private fixtures. Fixtures reported on the open market are estimated to account for only 10% of the total tonnage carried by non-liner methods. The remainder is carried by industrial carriers or under private fixtures, according to the analysis.