Bill Gallagher, President, IRI, reflects on the evolution of ship registries and how the landscape has changed.
Over the past 50 years, the shipping industry has changed beyond recognition and so have ship registries. Where once there were two (2) dominant registries, today there are three (3). The jockeying back and forth in terms of vessels and tonnage will continue, but the duopoly enjoyed by Panama and Liberia has been consigned to the dustbin of history. The Republic of the Marshall Islands (RMI) Registry has evolved and grown under the guidance of International Registries, Inc. and its affiliates (IRI), who provide administrative and technical support to the RMI Maritime and Corporate Registries.
Evolution can be a slow and steady process. In history, as in life and business, we march towards something different to that which came before. The pace of change, however, is less consistent or predictable. At times it is turbulent, disruptive, or negative. But for the most part, evolution is a positive process which enables us to thrive as the environment around us changes.
It is an ambitious analogy, I admit, but I think the same is true of the shipping industry. The evolution of ship registries has been positive for the shipping industry. During the 1960s and 1970s, there were only two (2) major open registries, Liberia and Panama, combined with a handful of strong national flags. A vast array of new registries entered the scene in the 1980s and 1990s which brought forward more competition. In 1997, total tonnage flagged in open registries surpassed total tonnage flagged with national registries (source: International Shipping Statistics Yearbook 2006, image below).
Despite this competition, for decades, these two (2) open registries were perceived as much better equipped than their peers to operate and meet the demands of what was evolving into an increasingly interconnected, globalized shipping industry. But duopolies in any market do not encourage innovation. Duopolies are not drivers for change and they rarely act in the best interest of their customers and the industry they serve.
From this historical backdrop, only one of the new registries emerges to break this duopoly. The growth of the RMI Registry, which officially surpassed Liberia in terms of deadweight tons (DWT) this year, has happened at an astonishing pace. The RMI has caught up with and surpassed a registry that was eight (8) times its size on 1 January 2000 (6.7 million vs. 54 million gross tons respectively (source: Lloyd’s Register World Fleet Statistics 1999)). The growth momentum exhibited since the inception of the RMI Registry to its position of dominance today is simply unprecedented, and marks a critical juncture in our development.
Of course, this has not happened without growing pains. Being pioneers in the decentralization of maritime services, establishing 27 worldwide offices with full authority and decision-making power, and maintaining a quality status worldwide reflects the pure hard work of the whole IRI team. It is with thanks to the individual strength and determination of our exemplary personnel and their ability to work as a team towards a common goal that we have overcome the challenge of maintaining quality while experiencing such remarkable growth. The RMI is positioned on the major Memorandums of Understanding white lists and maintained United States Coast Guard (USCG) Qualship 21 status for 13 consecutive years. I am personally proud that our team has worked hard with our owners and operators to achieve this extraordinary goal.
The duopoly of dominance in the ship registry market has been replaced by a much more positive competitive environment, which provides the perfect habitat for our further development into the future. The competitive landscape has morphed and been reconfigured, and with it flag States and the services they provide have improved with new norms, practices, benchmarks, and expectations for the conduct and capabilities of business.
On the whole, the shipping industry benefits from the certainty that the trajectory of evolution and change will be upward. We now look forward to an even brighter and innovative future.