Thank you, Sal, for the information. History is full of sea fairing pirates and the land lovers' ones as well. Somethings don't change well maybe a flag or two.
Sal, I would be curious as to what kind of inspection requirements the flags of convenience have? They require certification by a regulatory agency such as ABS, LRS, DNV, BV, etc. But, do they have their own inspection staff to assure compliance? Up until the end of the 20th century the USCG had their own inspection staff to assure US flag vessels complied with USCG rules. Towards the end of the 1990s the USCG delegated a lot of compliance inspections to the regulatory agencies. Gone were plan approvals for new construction and on-site inspection of vessels under construction In the early 2000s the OCMI's office might send an inspector for safety equipment inspection. But, for the most part the construction inspection and plan approval was being delegated to the regulatory agencies. In my career I worked for Shell, ARCO and ConocoPhillips. Shell at one time had vessels of various flags, crewed by individuals from various countries. ARCO had both US flag and foreign flag vessels. The US flag vessels were crewed by Americans and the foreign flag vessels were crewed by Italians. ConocoPhillips had US flag and foreign flag vessels crewed by Americans and Spaniards, respectively. In general, the number of crew members on the foreign flag was always greater. I believe this was a result of contractual agreements. I believe for the most part the US flag vessels were built to higher standards. The higher standards were dictated by compliance with USCG rules and because of the demands of operating in the Alaskan trade. At one time I believe that US flaged vessels and crews were held to a higher standard. Flags of convenience at one time offered the opportunity to reduce cost by reducing first cost by building abroad, by lowering registration and tax costs and by lowering crew costs. On the lighter side, at one time I had a sailboat when I lived in California. My parents and I, one evening, after a day of sailing were returning to San Diego Bay from the ocean. As we were entering the bay we heard a motor boat nearby and then heard someone yell for us to "hove to". We were boarded by the USCG for a vessel inspection. Two armed Coast Guardsmen came onboard for a safety inspection. I heard my mother talking to one while I guided the other on the inspection. After they were gone I asked my mother what she was talking about. She said the young man looked sick and she asked him if he was OK. She said he responded that it was his first day in the Coast Guard and that he was scared 'shitless'. I guess it was good I had a US flag vessel. Bob
The Classification Societies are not regulatory agencies. Their primary role is to verify that vessels are built and maintained to a certain standard (their class rules) for insurance purposes. They provide a secondary service as a Recognized Organization in issuing IMO required certificates but they only do this “on behalf of” the Flag State so while they do conduct inspections on behalf of the regulatory agencies they themselves are not the regulatory agency. All Flag Administrations are required to conduct their own safety inspections by the International Maritime Organization (IMO) and they are audited on this by the IMO
As a former British MN Deck officer from 19671979 I found this most interesting We were paid off in 1979 and if you wanted a shipping job in the UK after that you nocked on the doors of several agents. I went into the UK Road Haulage industry
Panama - easy to get through the cannal. Liberia - better and safe around Arab countries - Marshall Islands - aligned with Pacific group and SEATO and the US. Maybe ?
6/5/22; Sal, just watched Joe Blogs recent video on Europe preparing for LNG as alternative to Russian pipeline gas arising from Ukraine War. Joe Blogs shows pics of Norwegian vessel used in process of converting the liquefied gas back to the gaseous state. So could you do your magic 🎩 ✨ &tell us loyal viewers more info on these vessels? Which country has the most of these transport ships. Then show/tell us about the conversion vessels which are/will be positioned off Italy 🇮🇹, Germany 🇩🇪 & other European 🇪🇺 nations. Thx. Always enjoy your channel.👍👍👍👏
Awesome video Sal, so I don't know if it's me but when you're sharing your screen it's a little bit out of focus so the characters are fuzzy and little too small to actually read. Thanks Great topic
Here if a restaurant here fails an inspection essentially nothing happens except they have to post the score in a prominent place. What if a ship fails an inspection for safety, does it really make any difference? In case of war can we take over any of the foreign flagged ships?
Any serious issues found on ships are reported to the International Maritime Organization. This is also publicly available information and can be found for free on the internet. Too many “deficiencies” and it becomes more difficult to find someone to charter the vessel.
@@KiltedMariner how that insurance aspect comes to play? Peter Zeihan touted it is important thing, but can that inspection have effect on it? To my knowledge every ship needs insurance for their cargo and or ship itself.
@@effexon The Flag Administration requires certain types of insurance at certain levels, both of which must be recertified annually. The Classification society inspections/surveys are required by the insurance companies to validate the condition of the vessels. If you fail the survey bad enough you can lose your class status and then lose your insurance and then also lose your registration.
@@effexon Most of the insurers are not typical insurance companies but are “clubs” called Protection and Indemnity Clubs (P and I Clubs). They function where you pay for membership vs paying premiums. The insurers are more like the investors and the classification societies are the rating agencies. The classification societies write their own set of rules the vessels have to follow to be in good standing. The PandI clubs require a vessel to be in good standing with class to maintain their their membership. Typically a PandI club requires a class society be a member of the International Association of Classification Societies (IACS). There are only 12 IACS members. Both the Flag Administration and the PandI Club require a vessel to remain in good standing with class but for different reasons. Each Flag Administration chooses which class societies to “recognize”. Marshall Islands and Liberia recognize all 12 IACS members and only IACS members, Panama recognizes a bunch of non-IACS members. The US only recognizes I think 8 of the 12 IACS members. I may be off on the 8 but I know it is not all 12.
The video title is: "Why Is Nearly Half of the World's Ships Flagged in Three Nations? Panama, Liberia & Marshall Islands" That has a subject-verb agreement error and two punctuation errors. It should be: "Why are Nearly Half of the World's Ships Flagged in Three Nations: Panama, Liberia & Marshall Islands?"
Thanks for your efforts to present this interesting topic What about the cruise lines…shipping people around, human cargo so to speak. Do their flags follow the path that you presented here for goods shipping Thanks ⭐️
@@wgowshipping The majority are Panama and Bahamas. The number of cruise ships flagged in Liberia is in single digits. All are with minor, local cruise lines and zero trade in the US.
There are still registration and operating fees, but they are a lot lower and they eliminate the fees that manor nations have to operate consulates and embassies in other nations. Plus, minimal armed forces.
I'd like to see the US dissociate from foreign registries (i.e. not host their offices, not protect their ships) before we try cranking up subsidies if we want US vessels
Yeah he went to the naval academy I guarantee that at some point he has worked on or off the books for the CIA I wanted to see how he's covert ships that look like freighters a lot the CIA ships are flagged out of Liberia
@@wgowshipping thanks Sal.... all these places start running together when you get my age. hopefully Elon can get things rolling and you can branch out to keeping up with the freighters to and from mars.
Not bad but some of your info (not significant but easily verifiable) is very dated and you kind of overblow IRI and LISCR as if they ARE the Flag Administration vs. just running it on behalf of the governments they represent. Sure LISCR and IRI send people to IMO meetings but they do not represent their respective companies, they represent their respective country. They are both just contractors to the government and have no authority on their own. You kind of end with a suggestion that they are like some sort of international cabal running shipping as international corporations instead of just private companies acting as contractors. This is a little bit disingenuous or uninformed … not sure which. I also happen to know that at least one of them as several representatives with diplomatic status from their country in their offices every day who are very involved in what the company does on behalf of their country’s registry.
Not sure how it is dated as I referenced and sourced the info from their respective sites. That is a thin line as representing their countries vice their companies when the companies are the country's agents. I never used the phrase cabal because as I stated, this evolved over a set period of time and was not coordinated. However, you can not deny that Liberia or the Marshall Is in particular have minimal role in the running of their registry. If I had factual errors, please let me know and I can correct them.
@@wgowshipping Cabal was admittedly my word and not yours but I also did not quote you. I said you “kind of end with the suggestion”. They one thing that jumped out at me factually wise was at 19:30 when you said that if you travel the world you will see a lot of Liberian flagged passenger ships (not attempting an exact quote). Liberia has virtually no cruise ships, Bahamas and Panama have the market virtually cornered on that. Liberia USED to have a large number of cruise ships, I believe RCCL used to be all Liberia but almost everyone reflagged away from Liberia during the civil war in the 80s. I did say it wasn’t a significant piece of information but is non the less incorrect. I can deny that at least one of the mentioned countries has a “minimal role in the running of their registry”. I know for a fact that one of them, as I stated, has individuals with Diplomatic status sitting in more than one of their offices and that these diplomats are involved in decision making and not just figure heads. I also know they have nationals from that country doing some of the day to day grind. I have personal friends who used to work in at least one of the offices. I do like your videos Sal, I find them very informative overall.
While I dont doubt there may be some national representation in some offices, I am sure it is minimal and the bulk of the work is being done by non-nationals of the registry.
Thank you, Sal, for the information. History is full of sea fairing pirates and the land lovers' ones as well. Somethings don't change well maybe a flag or two.
Great explanation.. I was always wondering about the benefits of being foreign flagged..... Sure is interesting... Flags of Convenience...
Sal,
I would be curious as to what kind of inspection requirements the flags of convenience have? They require certification by a regulatory agency such as ABS, LRS, DNV, BV, etc. But, do they have their own inspection staff to assure compliance?
Up until the end of the 20th century the USCG had their own inspection staff to assure US flag vessels complied with USCG rules. Towards the end of the 1990s the USCG delegated a lot of compliance inspections to the regulatory agencies. Gone were plan approvals for new construction and on-site inspection of vessels under construction
In the early 2000s the OCMI's office might send an inspector for safety equipment inspection. But, for the most part the construction inspection and plan approval was being delegated to the regulatory agencies.
In my career I worked for Shell, ARCO and ConocoPhillips. Shell at one time had vessels of various flags, crewed by individuals from various countries. ARCO had both US flag and foreign flag vessels. The US flag vessels were crewed by Americans and the foreign flag vessels were crewed by Italians. ConocoPhillips had US flag and foreign flag vessels crewed by Americans and Spaniards, respectively. In general, the number of crew members on the foreign flag was always greater. I believe this was a result of contractual agreements.
I believe for the most part the US flag vessels were built to higher standards. The higher standards were dictated by compliance with USCG rules and because of the demands of operating in the Alaskan trade.
At one time I believe that US flaged vessels and crews were held to a higher standard. Flags of convenience at one time offered the opportunity to reduce cost by reducing first cost by building abroad, by lowering registration and tax costs and by lowering crew costs.
On the lighter side, at one time I had a sailboat when I lived in California. My parents and I, one evening, after a day of sailing were returning to San Diego Bay from the ocean. As we were entering the bay we heard a motor boat nearby and then heard someone yell for us to "hove to". We were boarded by the USCG for a vessel inspection. Two armed Coast Guardsmen came onboard for a safety inspection. I heard my mother talking to one while I guided the other on the inspection. After they were gone I asked my mother what she was talking about. She said the young man looked sick and she asked him if he was OK. She said he responded that it was his first day in the Coast Guard and that he was scared 'shitless'. I guess it was good I had a US flag vessel.
Bob
The Classification Societies are not regulatory agencies. Their primary role is to verify that vessels are built and maintained to a certain standard (their class rules) for insurance purposes. They provide a secondary service as a Recognized Organization in issuing IMO required certificates but they only do this “on behalf of” the Flag State so while they do conduct inspections on behalf of the regulatory agencies they themselves are not the regulatory agency. All Flag Administrations are required to conduct their own safety inspections by the International Maritime Organization (IMO) and they are audited on this by the IMO
Thanks for the great explanation! I have always wondered about these registries. :)
Thanks for the information...
Johnny Harris did a great breakdown of this! Probably not as comprehensively though.
As a former British MN Deck officer from 19671979 I found this most interesting
We were paid off in 1979 and if you wanted a shipping job in the UK after that you nocked on the doors of several agents. I went into the UK Road Haulage industry
What great info. Thank you so much.
Very interesting! I had a feeling it was money. It's similar to a lot of trucking companies registering their trailers in Maine. It's about money.
This is all about avoiding government regulations and safety measures, as much as possible, anyone who thinks different are fools.
Man this was Super! Still odd that the Ops are in NoVA.. Northern VA w/ US infrastructure.. Didn't seem like there where "flag fees"
Panama - easy to get through the cannal. Liberia - better and safe around Arab countries - Marshall Islands - aligned with Pacific group and SEATO and the US. Maybe ?
-Look up Marshall Islands MLP
I would say none of the above. Registry is a tax dodge.
6/5/22; Sal, just watched Joe Blogs recent video on Europe preparing for LNG as alternative to Russian pipeline gas arising from Ukraine War. Joe Blogs shows pics of Norwegian vessel used in process of converting the liquefied gas back to the gaseous state.
So could you do your magic 🎩 ✨ &tell us loyal viewers more info on these vessels? Which country has the most of these transport ships. Then show/tell us about the conversion vessels which are/will be positioned off Italy 🇮🇹, Germany 🇩🇪 & other European 🇪🇺 nations. Thx. Always enjoy your channel.👍👍👍👏
James...a lot of developments in this sector.
www.naturalgasintel.com/germany-confirms-four-fsrus-to-help-displace-russian-gas/
@@wgowshipping thank you.
It's not going to happen like that. Oil is fungible and EU is buying Russian oil after India refines it.
Awesome video Sal, so I don't know if it's me but when you're sharing your screen it's a little bit out of focus so the characters are fuzzy and little too small to actually read. Thanks Great topic
I will see if I can increase the resolution.
As you said in the video- Why ARE half the . . .
Thank you.
Here if a restaurant here fails an inspection essentially nothing happens except they have to post the score in a prominent place. What if a ship fails an inspection for safety, does it really make any difference? In case of war can we take over any of the foreign flagged ships?
Any serious issues found on ships are reported to the International Maritime Organization. This is also publicly available information and can be found for free on the internet. Too many “deficiencies” and it becomes more difficult to find someone to charter the vessel.
@@KiltedMariner how that insurance aspect comes to play? Peter Zeihan touted it is important thing, but can that inspection have effect on it? To my knowledge every ship needs insurance for their cargo and or ship itself.
@@effexon The Flag Administration requires certain types of insurance at certain levels, both of which must be recertified annually. The Classification society inspections/surveys are required by the insurance companies to validate the condition of the vessels. If you fail the survey bad enough you can lose your class status and then lose your insurance and then also lose your registration.
@@KiltedMariner thus by proxy insurance companies have similar effect in shipping as credit rating in investment banking (AAA rating etc).
@@effexon Most of the insurers are not typical insurance companies but are “clubs” called Protection and Indemnity Clubs (P and I Clubs). They function where you pay for membership vs paying premiums. The insurers are more like the investors and the classification societies are the rating agencies. The classification societies write their own set of rules the vessels have to follow to be in good standing. The PandI clubs require a vessel to be in good standing with class to maintain their their membership. Typically a PandI club requires a class society be a member of the International Association of Classification Societies (IACS). There are only 12 IACS members. Both the Flag Administration and the PandI Club require a vessel to remain in good standing with class but for different reasons. Each Flag Administration chooses which class societies to “recognize”. Marshall Islands and Liberia recognize all 12 IACS members and only IACS members, Panama recognizes a bunch of non-IACS members. The US only recognizes I think 8 of the 12 IACS members. I may be off on the 8 but I know it is not all 12.
thank you teacher Sal
The video title is: "Why Is Nearly Half of the World's Ships Flagged in Three Nations? Panama, Liberia & Marshall Islands"
That has a subject-verb agreement error and two punctuation errors. It should be: "Why are Nearly Half of the World's Ships Flagged in Three Nations: Panama, Liberia & Marshall Islands?"
Thanks!
Point of correction... Broad Street exist in Monrovia
By the way your shows are Tony the Tiger Grrrreat!
Very good video and info, do you have anyway to be contact?
Mercoglianosal@gmail.com
Thanks for your efforts to present this interesting topic What about the cruise lines…shipping people around, human cargo so to speak. Do their flags follow the path that you presented here for goods shipping Thanks ⭐️
There is one major cruise ship that is US flagged.
@@wgowshipping The majority are Panama and Bahamas. The number of cruise ships flagged in Liberia is in single digits. All are with minor, local cruise lines and zero trade in the US.
@@KiltedMariner 💯
If fees are waved how does it make money ? Initial registry ?
There are still registration and operating fees, but they are a lot lower and they eliminate the fees that manor nations have to operate consulates and embassies in other nations.
Plus, minimal armed forces.
well your not going to have the marshal islands much longer...kind of hard to do anything when the islands are no longer islands,
Why ARE nearly
I'd like to see the US dissociate from foreign registries (i.e. not host their offices, not protect their ships) before we try cranking up subsidies if we want US vessels
Three make an oligopoly, not a monopoly. :-)
You are correct.
Simply put $$$$ and Corruption.
Yeah he went to the naval academy I guarantee that at some point he has worked on or off the books for the CIA I wanted to see how he's covert ships that look like freighters a lot the CIA ships are flagged out of Liberia
Sal, sorry your Campbell baseball got beat. They had a good year.
I was hoping for a rematch with Tennessee, but it was not our day.
The bears made it a good game for a while. Vols are animals.
The Liberian Registry is...
isn't CHI-na and the Marshall now in bed together doing the wild thing?
where does that leave good ole uncle sugar?
China is working with the Solomon Islands.
@@wgowshipping thanks Sal.... all these places start running together when you get my age.
hopefully Elon can get things rolling and you can branch out to keeping up with the freighters to and from mars.
Not bad but some of your info (not significant but easily verifiable) is very dated and you kind of overblow IRI and LISCR as if they ARE the Flag Administration vs. just running it on behalf of the governments they represent. Sure LISCR and IRI send people to IMO meetings but they do not represent their respective companies, they represent their respective country. They are both just contractors to the government and have no authority on their own. You kind of end with a suggestion that they are like some sort of international cabal running shipping as international corporations instead of just private companies acting as contractors. This is a little bit disingenuous or uninformed … not sure which. I also happen to know that at least one of them as several representatives with diplomatic status from their country in their offices every day who are very involved in what the company does on behalf of their country’s registry.
Not sure how it is dated as I referenced and sourced the info from their respective sites.
That is a thin line as representing their countries vice their companies when the companies are the country's agents.
I never used the phrase cabal because as I stated, this evolved over a set period of time and was not coordinated. However, you can not deny that Liberia or the Marshall Is in particular have minimal role in the running of their registry.
If I had factual errors, please let me know and I can correct them.
@@wgowshipping Cabal was admittedly my word and not yours but I also did not quote you. I said you “kind of end with the suggestion”. They one thing that jumped out at me factually wise was at 19:30 when you said that if you travel the world you will see a lot of Liberian flagged passenger ships (not attempting an exact quote). Liberia has virtually no cruise ships, Bahamas and Panama have the market virtually cornered on that. Liberia USED to have a large number of cruise ships, I believe RCCL used to be all Liberia but almost everyone reflagged away from Liberia during the civil war in the 80s. I did say it wasn’t a significant piece of information but is non the less incorrect.
I can deny that at least one of the mentioned countries has a “minimal role in the running of their registry”. I know for a fact that one of them, as I stated, has individuals with Diplomatic status sitting in more than one of their offices and that these diplomats are involved in decision making and not just figure heads. I also know they have nationals from that country doing some of the day to day grind. I have personal friends who used to work in at least one of the offices.
I do like your videos Sal, I find them very informative overall.
You are correct that Carnival, RCL and Celebrity for a long time was under Liberia, but reflagged because of the Civil wars due to the Civil Wars
While I dont doubt there may be some national representation in some offices, I am sure it is minimal and the bulk of the work is being done by non-nationals of the registry.