29 June 2023 (Lloyd's List) - CONTAINER lines and boxship owners continued to shuffle their fleets between flags during the pandemic, but the UK has been the hardest hit, with the impact driven more by its self-imposed exile from the European Union than by other causes.
An analysis of UN Conference on Trade and Development figures by Sea-Intelligence shows that the tonnage registered in various flag states altered significantly between 2019 and 2023.
“Malta is clearly seen to have grown the most, with Liberia coming second and then Portugal and Singapore as distant third and fourth, in terms of growing their tonnage,” said Sea-Intelligence chief executive Alan Murphy.
“But it should then be noted that during this period the total tonnage — in dwt terms — has grown 15%, making it clear that some of the countries have lost market share in terms of flag state tonnage.” Among the top 10 countries Denmark, Hong Kong and Marshall Islands had declined in relative importance, he added.
By looking at the total tonnage registered, it was clear that South Korea and Japan stood out as gaining substantially in the pandemic period, and while the UK drop is also clearly seen to be much larger than anyone else, at over 50%.
In the case of the UK, Brexit is clearly a more powerful driver than the pandemic — the whole drop seen in the UK takes place from 2019 to 2020,” Murphy said. “Actually, from 2019 to 2020 the magnitude of the container vessel fleet registered in the UK drops 54% in a single year — and has then since grown marginally.”
An assessment of Lloyd’s List Intelligence fleet data shows that since 2016, 81 containerships comprising 585,971 teu have left the UK flag. The bulk of those are from European container lines, particularly CMA CGM. Since 2016, the French carrier has removed 36 ships with a total capacity of 307,000 teu from the UK registry.
At the same time, the number has only risen by 16, comprising 169,801 teu have been added following 26 addition and 10 deletions, with the UK-flagged boxship fleet now just 48 vessels comprising 390,314 teu. The remaining fleet is in concentrated ownership and there are risks that the number of boxships under the UK flag could fall further.
Cosco has seven ageing panamaxes that will likely go to scrap soon, as all are over 20 years old. Evergreen has 18 vessels comprising 122,000 teu, but there are questions over how long they will remain with the UK flag, after moves in Taiwan to consolidate its shipowning operations as the family of former chairman, the late Chang Yung-fa, battle for control of the group’s assets.
In capacity terms, the Zodiac Group remains the largest owner of UK-flagged containerships, with 17 vessels, with an aggregate capacity just shy of 200,000 teu. Tonnage tax systems in Europe, which headquarters the top three container lines, as well as number five carrier, Hapag-Lloyd, require that 60% of tonnage be registered in EU member states, meaning the UK flag is no longer eligible or attractive for many carriers.
