RESTRICTEDWORLD TRADE
ORGANIZATIONS/CSS/W/106
4 October 2001
(01-4859)
Council for Trade in Services
Special Session
MARITIME TRANSPORT SERVICES
Background Note by the Secretariat
This Note has been prepared at the request of the Council for Trade in Services in its Special
Session held on 27-28 March 2001.  It updates and complements document S/C/W/62 dated
16 November 1998.
The Note includes 1997 data which were not available at the time of drafting
document S/C/W/62, and generally covers the period until 1999.  Additional elements are presented
on subsectors that,  due to lack of time , had not or only partially been dealt with before (e.g. liner ,
harbours , classification societies,  bulk , offshore , cruise , multimodal) .   Nevertheless, the Note cannot
be considered as reasonably exhaustive, given in particular the absence of a comprehensive database
on regulatory aspects, apart from the re plies to the questionnaire of the NGMTS , which are now
largely outdated, and the paucity of available information on developing countries.  Each of the two
parts of the Note – General Developments and Sectoral Developments – first addresses economic andthen regulatory issues and deals with classification questions when relevant.
Proposals concerning further improvements in classification and scheduling (paragraphs 43
to 68 of document S/C/W/62
) are not repeated , but simply expanded upon in the light of recent
experience.
_______________S/CSS/W/106
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TABLE OF CONTENTS
I. GENERAL DEV ELOPMENTS .............................................................................................4
A. ECONOMIC DEVELOPMENTS .......................................................................................................4
B. GENERAL REGULATORY DEVELOPMENTS ...................................................................................5
1. Market access and libe ralization is sues .................................................................................5
(a) Multilateral developments .................................................................................................. .......5
(i) WTO ........................................................................................................................ ..................5
(ii) United Nations ............................................................................................................ ...............5
(b) Regional de velopments ...................................................................................................... ........5
(i) OECD ....................................................................................................................... ..................5
(ii) APEC ...................................................................................................................... ...................6
(c) National de velopments ...................................................................................................... ........6
(d) Developments in non- governmental  fora ...................................................................................7
2. Government support .......................................................................................................... ......7
3. Safety measures ............................................................................................................. ...........8
(a) International Maritime  Organizati on (IMO) ..............................................................................8
(b) OECD ....................................................................................................................... ..................9
(c) Regional Memoranda of Understa nding on Port State Control ...............................................10
(d) European Union ............................................................................................................. ..........10
4. Electronic trade ............................................................................................................ ..........11
II. SECTORAL DEV ELOPMENTS .........................................................................................11
A. C RUISE SHIPPING ......................................................................................................................11
B. O THER PASSENGER TRANSPORT (FERRY SERVICES ) ................................................................13
C. B ULK SHIPPING .........................................................................................................................14
D. L INER SHIPPING ........................................................................................................................14
1. Market Access and Liberalization Policies ..........................................................................15
2. Competition policies ........................................................................................................ ......15
(a) Confer ences ................................................................................................................ .............16
(b) Consor tia .................................................................................................................. ................18
(c) Allian ces .................................................................................................................. ................18
(d) Agreements between conference and non-conference members (stabilization or
discussion ag reemen ts) ........................................................................................................ ....19
(e) Mergers .................................................................................................................... ................20
E. O FFSHORE OPERATIONS ...........................................................................................................20
F. O THER MARITIME TRANSPORT .................................................................................................21
G. P ORT SERVICES AND MARITIME AUXILIARY SERVICES ............................................................21S/CSS/W/106
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1. Economic developments ....................................................................................................... .21
2. Regulatory developments ..................................................................................................... .23
(a) International organizations ................................................................................................ .......23
(b) European Union ............................................................................................................. ..........24
(c) National de velopments ...................................................................................................... ......25
H. M ULTIMODAL TRANSPORT .......................................................................................................25
I. C LASSIFICATION SOCIETIES ......................................................................................................26
J. S HIPBROKERS ...........................................................................................................................26
K. C ONTAINER LESSORS ...............................................................................................................27
ANNEX 1 (World Seaborne Trade by Country Groups) .......................................................................28
ANNEX 2 (Shares of World Tonnage by Types of Vessel and Country Groups) ................................29
ANNEX 3 (Specific Commitments undertaken since November 98) ...................................................30
ANNEX 4 (Leading 20 Container Service Operators) ..........................................................................32
ANNEX 5 (A Comparison between the "OECD-DNME" Understanding) ..........................................33
ANNEX 6 (Offshore Services) ..............................................................................................................37
Table 1 (Possible Correspondence with CPC Provision of Offshore Activities) ..................................37
Table 2  (Major countries of registration & of Beneficial Ownership) ……………………………….  40
ANNEX 7 (Various Port Classification) ...............................................................................................41
Table 1 (IAPH Classification of Port Assets) .......................................................................................41
Table 2 (IAPH Classification of Port and Auxiliary Services) .............................................................43
Table 3 (OECD Classification of Port and Auxiliary Services) ............................................................44
Table 4 (EU Draft Directive List of Port Services)  ............................................................................. 45
ANNEX 8  (The Top 5 Worldwide Operators of Container Terminal) ……………………………….  46
ANNEX 9 (Elements on the Main Classification Societies) .................................................................47
ANNEX 10 (Possible Classification of Shipbroking Activities) ……………………………………....48S/CSS/W/106
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I. GENERAL DEVELOPMENTS
A. ECONOMIC DEVELOPMENTS
1. Shipping remained by far the most important mode of international transport of goods.  World
seaborne trade recorded its fourteenth consecutive annual increase in 1999, reaching a record high of
5.23 billion tonnes.  Annual growth rates, however, declined to 1.3 per cent, down from 2.2 per cent
in 1998 and 4.1 per cent in 1997.1  The figures reflect the Asian financial crisis, the following
recovery and the buoyant state of the US and European economies during those years.
2. The geographical pattern of trade has not  changed significantly between 1997 and 1999
(Annex 1).  Developing countries account for over 50 per cent of the goods loaded, and developed
countries for around 43 per cent.  This compares with shares of just over one-quarter for developing
countries and some two-thirds for developed countries for goods unloaded.
3. Figures on the evolution of freight rates as a proportion of the total value of imports (c.i.f) are
available only up to 1998.  No significant changes are discernable:
TABLE 1
Year WorldDeveloped
countriesDeveloping
countries
1997 5.24% 4.17% 8.04%
1998 5.06% 4.07% 8.06%
Source:  UNCTAD, Review of Maritime Transport.
4. The world merchant fleet tonnage has continued to expand, from 775.9 million dead-weight
tonnes (dwt) at the end of 1997 to 788.7 million dwt at the end 1998 (1.6%), and 799 million dwt at
the end 1999 (1.3%) .  Reflecting the buoyant state of the world economy, surplus capacities have
generally declined:
TABLE 2
YearWorld surplus tonnage
(in % of the world fleet)Tanker
surplusDry bulk
surplusGeneral
cargo surplusUnitized
fleet*
1997 3.7% 5.8% 3.9% 2.7% 0%
1998 3.1% 5.9% 2.3% 2.6% 0%
1999 3.0% 5.0% 3,2% 3.0% 0%2
*  Unitized fleet include fully cellular container ships, pa rtly cellular container ships, ro-ro ships and barges
carriers.Source:  UNCTAD, Review of Maritime Transport.
5. Recent structural indicators point out a gradual erosion of developed countries' registers (now
one-quarter of world tonnage) and a countervailing surge in open registries (now nearly one half of
world tonnage) .  Apart from a declining share of Central and Eastern European countries (from 3.1 per
                                                     
1 In ton-miles the picture is significantly different:  +3.6% in 1997;  -1% in 1998;  -0.05% in 1999.
2 Recent partial figures (July 2001) lead to think that this tendency has ended and that overcapacity will
reappear for the cellularized fleet due to the double effect of the slowdown of world growth and the entry inservice of new buildings, in particular of the very large units over 6, 000 boxes.S/CSS/W/106
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cent of the tonnage in 1997 to 2.3 per cent in 1999), the role of other country groups, including
developing countries as a whole, has remained largely unchanged (Annex 2).3
6. Taking into account the controlled fleet (i.e. ships owned nationally, but registered under a
foreign, mostly open registry flags), the ranking of the leading 35 maritime countries or territories
shows little change from 1997 to 1999.  The top-ranking six countries or territories (Greece;  Japan;
Norway; United States; China and Hong Kong, China) have remained the same.  While Germanyadvanced from the 9
th to the 7th rank, the UK fell from the 7th to 10th.  The average share of foreign
flags in the total fleet of these 35 countries and territories has clearly risen (from 58.8 per cent in
1997, to 62.5 per cent in 1999).
B. GENERAL REGULATORY DEVELOPMENTS
7. The following section deals successively with  liberalization policies, government support,
safety measures, and the role of electronic trade.  Due to sectoral specificities, competition policies
will be dealt with in the sector part of this Note.
1. Market access and liberalization issues
(a) Multilateral developments
(i) WTO
8. No new or improved commitments have been obtained from the initial WTO Members since
November 1998.  Ten acceding countries, however, have included maritime transport commitments intheir services schedules. Annex 3 gives an overview of these commitments in a format comparable to
the Tables contained in pages 11-17 of document  S/C/W/62.
(ii) United Nations
9. The number of countries that have ratified the UN Liner Code of Conduct for Maritime
Conferences (in force since 1983) has remained stable, at 78, during the period 1997-2000.  The UNConvention on the Carriage of Goods by S ea of 1978 (Hamburg Rules), in force since 1992,
registered one more ratification, totalling now 26 parties.  Other UN Conventions on Shipping have
not reached the number of ratifications required for their entry into force.  In some cases, the number
of parties remained unchanged (UN Convention on Conditions for Registration of Ships of 1986
, with
11 parties while 40 parties would be required;  International Convention on Arrest of Ships of 1999with no parties yet), in other cases, there were slight increases (International Convention on Maritime
Liens and Mortgages, 1993, from 3 to 5 parties while 10 would be required; UN Convention on
International Multimodal Transport of Goods, 1980, from 8 to 9 parties while 30 would be required)
.
(b) Regional developments
(i) OECD
10. The OECD Maritime Transport Committee initia ted in 1998 a review of its 1986 "Common
Shipping Principles".4  The Committee agreed in 1999 on three additional principles covering:
(i) access to and use of  maritime auxiliary services;  (ii) access to, use and provision of multimodal
transport services;  and (iii) measures related to safety, the environment and substandard shipping.  At
the end of 2000, the OECD Council formally endorsed the new principles.  A description is given                                                     
3For more detailed elements and figures on open registries see notably UNCTAD, Review of Maritime
Transport, edition 2000, pages 29-32.
4For the complete text of these principles see:  http://www.oecd.org/dsti/sti/transpor/sea/act/council.htmS/CSS/W/106
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below in the subsections on port services and maritime auxiliary services, multimodal transport and,
safety aspects.
11. In 1998, the Committee held a workshop with representatives of "Dynamic Non-Member
Economies" (Argentina;  Brazil;  Chile;  Hong Kong,  China;  Malaysia;  Singapore;  Chinese Taipei;
and Thailand) to consider a draft "OECD-DNME Understanding on Maritime Transport Principles".
12. This Understanding was finalized in 1999.  Its participants comprise all 29 Members of the
OECD plus Chile;  Hong Kong, China;  Malaysia;  Singapore;  Chinese Taipei and Thailand.  The
text is reproduced in Annex 5 with references to similar WTO/GATS provisions.  Unlike the revised
"OECD Common Shipping Principles", the Preambl e of the Understanding contains an explicit
reference to the GATS and the future maritime nego tiations ("This Understanding is without prejudice
to the General Agreement on Trade in Services, the 28th June 1996 Ministerial Decision on Maritime
Transport Services and to future negotiations on trade in services at the WTO").
13. The above Understanding is comparable  to the 1993 "Understanding between OECD
Members and "NIS-CEEC" (Newly I ndependent States and Central and Eastern European Countries:
Bulgaria, Estonia, Latvia, Lithuania, Romania, the Russian Federation and Ukraine).  Under the latter
Understanding, the Russian Federation reported in 1998 that, in respect of Principle IX,5 which deals
with access to inland waterways, full liberalizati on had not been possible because of the large number
of small river ports which had to be brought up to date.  The Committee agreed to extend the relevanttransition period on the understanding that the Russian Federation provide regular progress reports.
14. An electronic discussion group was set up to exchange information on four items, including
the resumption of the WTO negotiations on maritime transport services and preparatory work.
15. In 2000, the OECD Maritime Transport Committee extended invitations to Egypt, India,
Israel, the Philippines and South Africa to join future discussions on shipping issues.
(ii) APEC
16. APEC has a Transportation Working Group.
6  In the area of maritime transport it has
established an interactive web-based port database, a "virtual centre for transportation research
development and education" web site, a program to improve training and qualifications of seafarers,
"a forum on inter-modalism", and a project on "safer shipping in the Asia Pacific region".  One of itsprojects for the future is to develop examples and case studies of the benefits of regulatory and other
institutional changes aimed at maritime trade liberalisation and facilitation.  A meeting of the APEC
Ministers of Transport is scheduled in Lima in October 2001.
(c) National developments
17. The Republic of Korea modified in 1998-1999 its Maritime Transport Act by eliminating the
restrictions on ocean-going shipping businesses, the freight filing system, and the prohibition on large
                                                     
5 This principle stipulates:  "Parties to this Unders tanding, in accepting the provisions of Principle IX,
acknowledge that, because inland waterways are at presen t largely governed by specific national, bilateral and
multilateral regulations, there may be a transitional period between acceptance of the Understanding and fullimplementation of the provisions of this Principle.  Notwithstanding this acknowledgement, Parties agree to theprinciples of non-discriminatory treatment and reciprocity with respect to all seagoing vessels engaged in thetransport of commercial cargoes in international trade utili sing inland waterways. It must however be noted that
this Principle does not apply to cabotage".
For the complete text see:  http://www.oecd.org/dsti/sti/transpor/sea/index.htm;  on inland waterways
see also document S/C/W/62, paragraphs 46 and 61.
6 For more information see:  http://apecsec.org.sg/workgroup/transportation and
 http://www.apectptwg.org.au.S/CSS/W/106
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shippers from engaging in cargo transport.  The procedures and conditions for the vessel's registration
were relaxed.  Also, foreigners have been authorized, in addition to the pre-existing possibility of joint
ventures with 50 per cent participation, to engage  in Korea's ocean-going shipping business in the
form of mergers and acquisitions or through new establishment.  They will also be free to establish
branches, the approval requirement having been eliminated.  Foreigners may also own and register
vessels, provided they establish a commercial entity in Korea.
18. West African countries have pursued liberalization policies under the aegis of the World Bank
by disbanding or reducing the role of Shippers' Councils.  However, it appears that operations are still
affected by various day-to-day business problems.7
(d) Developments in non-governmental fora
19. The International Chamber of Commerce, in close cooperation with shipowners and shippers
associations, issued in June 2001 an "Issue paper on negotiations on maritime transport in the WTO"
(document 322-1/31 bis dated 29 June 2001).  The paper calls for "substantial liberalization within the
context of the GATS, based on the removal of remaining restrictive measures, unfettered market
access on a non-discriminatory asis for all international maritime related activity and the participation
of a significant number of countries".
2. Government support8
20. During the period under review, developed countries, but also in certain instances developing
countries, have continued to use various support regimes in order to protect their fleet under national
flag.  While certain measures have been terminated (e.g. direct financial contributions in Germany in
1998), others have been modified or introduced.  In general, tax incentives have been preferred over
direct subsidies.
21. A tonnage tax (i.e. a lump sum tax based on the tonnage of the ship rather than on profits) was
introduced in Germany in 1998 and in the United Kingdom in 2000.  Finland took the principle
decision to introduce such a tax in the near future, and discussions are underway in several other
countries, notably Denmark and India, to create similar schemes.
22. Other recent tax incentives, introduced by the German Government in 1998, is the possibility
for shipowners to withhold 40 per cent of the income tax to be paid by the crew.
23. Support policies may also be targeted at the seafarers directly.  For instance, to diminish
labour costs, Ireland instituted in 1998 a special £5,000 tax allowance for seafarers and amended its
foreign earnings deduction scheme with the sa me intention.  In 1998, Sweden prolonged its
repayment of seamen taxes and increased the coverage of social fees by the State.  In 2000,  Finland
extended the coverage of a parallel register subs idy with regard to cargo vessels.  In addition to
                                                     
7 http://www.ecsa.be/annualreport/item05.htm.
8This Section is based on the OECD Maritime Transport Committee's Annual Reports during the
period under review.  These reports are based on voluntary individual contributions, hence the fragmentary and
heterogeneous character of the information provided.  For more information on support schemes in the OECD
area, see document DSTI /DOT /MTC(2001)1 "Analysis of Selected Maritime Support Measures" dated1 December 2000.  Systematic and publicly available data for other regions are lacking.  DocumentsS/WPGR/W/25, dated 26 January 1998,  S/WPGR/W/25/Add.1, dated 29 May 2000,
S/WPGR/W/25/Add.1/Corr.1, dated 11 July 2000 and S/WPGR/W/25/Add.2, date d 12 December 2000, contain
some information on subsidy schemes operated by WTO Members in all services sectors, including maritime
transport, based on Trade Policy Review (TPR) Reports.  Of the eleven TPR Secretariat reports published since
S/WPGR/W/25/Add.2, only one, WT/TPR/S/88 (United States), dated 15 August 2001, deals with maritimesubsidies (paragraph 42).S/CSS/W/106
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amounts equivalent to sailors' taxes withheld in advance and social security contributions paid by the
employer, the subsidy now covers those parts of the sailors' pension insurance premiums that are fully
paid by the employer as well as certain Social Insurance fees.  In a reverse move, Norway reduced in
1998 the scope and extent of its seafarer tax reimbursement scheme.
24. The tendency towards establishing second registries and alleviating nationality requirements
in the first registries has continued.  For instance, in Germany, in addition to the captain, only one ortwo nautical or technical officers of German or European nationality are required to form part of the
crew, depending on the size of the vessel.  A second registry has been established in Korea in 1998.
This registry allows the hiring of foreign seafarers.  In addition vessels operated under this registry
enjoy tax benefits. Under an "International Ship System" introduced in Japan in 1996, Japanese flag
vessels meeting certain requirement are entitled to preferential treatment under the local-property and
ship-registration taxes.  The system was expanded in 1999 to allow foreign officers other than the
captain and chief engineer to be assigned with the approval of the Minister.
3. Safety measures
25. During the period under review, many safety-related policy initiatives were implemented as a
result of previous decisions or as consequence of recent maritime catastrophes.
(a) International Maritime Organization (IMO)
26. IMO legislative work normally proceeds by way of amendments to major conventions such as
the International Convention for Safety of Life at  Sea (SOLAS) of 1960, the International Convention
on Standards of Training Certification and Watch-Keeping for Seafarers (STCW) of 1978, the
Internationa1 Convention for the Prevention of Pollution from Ships (MARPOL) of 1973 and the
International Convention on Civil Liability for Oi l Pollution Damage (CLC) of 1969.  During the
period under review, several amendments came into force,
9 and new measures have been adopted but
not yet become effective.10  The latter include:
- Mandatory regulations requiring ships to carry voyage data recorders (VDRs)
i.e. "black boxes" (December 2000).  At the same date, IMO also agreed on a list of
parties deemed to be fully in compliance with the STCW, known as the "white list";
- the International Maritime Dangerous Goods Code (IMDG) was made mandatory and
a regulation prohibiting  new installations of materials containing asbestos in all ships
was adopted;
                                                     
9 The following Amendments relating to SOLAS came into effect during the reporting period:  the
1988 Protocol introducing a new harmonized system of surveys and certification;  the May 1994 amendments
making mandatory the International Safety Management Code (ISM);   the June 1996 amendments on life-saving
appliances and arrangements on the December 1996 amendments to on fire safety measures, on 1st July 1999 the
June 1997 amendments on vessels traffic services (i.e. traffic management system);   the November 1997
amendments on additional safety measures for bulk carriers;  the May 1999 amendments making mandatory theInternational Code for the Safe Carriage of Packaged Nuclear Fuel (INF Code).
  STCW  was once modified,
through  the 1997 amendments concerning training for personnel on passenger ships, the 1990 amendments to
the International Code for the Construction and Equipment of Ships Carrying Dangerous Chemicals in Bulk
(IBC Code);   the 1990 amendments to the Code for the Construction and Equipment of Ships Carrying
Dangerous Chemicals in Bulk (BCH);   and the 1997 amendment on stability criteria for double hull tankers.
10 For a complete list of IMO conventions and relevant data see:   http://www.imo.org.S/CSS/W/106
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- An amended regulation of the MARPOL convention, establishing a global
timetable to eliminate most single hull oil tankers by 2015 or earlier (April
2001).11  A "conditional assessment scheme" will be applied in 2005 and
2010 to the remaining single hull tankers.
27. Other important "post Erika" measures are th e amendments adopted by IMO in October 2000
in order to raise by 50 per cent the limits of compensation payable to victims of pollution by oil from
oil tankers under the International Convention on Civil Liability for Oil Pollution Damage
(CLC Convention) and the Interna tional Convention on the Establishment of an International Fund for
Compensation for Oil Pollution Damage (IOPC Fund) .
(b) OECD
28. While OECD shipping activities have traditionally centered largely on market access and
competition issues, safety matters have recently gained in importance.
29. In 1998, the OECD Secretariat circulated a Discussion Paper on "Possible Actions to Combat
Substandard Shipping by Involving Players other th an the Shipowner in the Shipping Market" which
recommend predominantly industry self-regulation .12  The Paper was discussed at a round table with
Member States and industry representatives;  results were consolidated in the form of an Action Plan
which received the endorsement of the Maritime Transport Committee (MTC) . 13  A progress report
on the implementation of the Action Plan was issued in 1999.14
30. Further, the MTC examined who effectively bore the costs of substandard shipping – the
owners concerned or, due to insurance arrangements, the industry as a whole.  The resulting report
issued in 2000 concluded that the majority of parties that are directly involved in the use of
substandard shipping did not apparently incur significant costs , principally because of cover provided
by the insurance industry.15  The Committee invited comments from industry and governments, and
decided to forward them to IMO.
31. The MTC also agreed to focus attention on ways to encourage the industry to participate in
the elimination of substandard shipping.  One area of investigation is current practices of providinginsurance cover to vessels that may be substandard. Discussions also include the possibilities of
incentives to promote higher standards, and enable shipowners and other parties to better combat the
competition from operators and users of substandard shipping.
32. In a parallel process, the OECD Council adopted in 2000 a recommendation on Measures
Relating to Safety, the Environment and Substandard Shipping.  Accordingly, the shipping policies of
OECD Member countries should be directed to:  involving all players in the shipping market in
creating a fair and transparent market;  ensuring that all vessels meet applicable international rules and
standards concerning safety of ships and persons and the prevention of pollution of the marine
environment;  and  properly exercise port state control.
                                                     
11 Double hulls are compulsory for new tankers since 1996.  The flag State may authorize a single hull
vessel to operate for up to 25 years until its 25th anniversary.  However, the receiving State can deny entry to
those ships after 2015 provided they notify IMO of their intention.  The European Community, Malta and Cyrusdid so.  Double hulls were already compulsory in U.S. waters following legislation Oil Pollution Act, taken after
the Exxon Valdez catastrophe.
12 Document DSTI/DOT/MTC(98) 10/final dated 8 July 1998.
13 http://www.oecd.org/dsti/sti/transpor/sea/act/substan.htm.
14 http://www.oecd.org/dsti/sti/transpor/sea/news/ACTIONPLAN.htm.
15 http://www.oecd.org/dsti/sti/transpor/s ea/prod/Cost_to_users.pdffolwiwng.th.S/CSS/W/106
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(c) Regional Memoranda of Understanding on Port State Control
33. Port State Control (PSC) is the inspection of foreign ships in national ports to verify that the
conditions of ship and equipment comply with inte rnational conventions and that the ship is manned
and operated in accordance with applicable international laws.  PSC is exercised under national law,
based on relevant Conventions.  While the relevant controls help to promote the safety of ships and
the protection of the marine environment, a regional approach would ensure that substandard shipsand operators have fewer places to hide.  Hence the multiplication of regional Memoranda of
Understanding on PSC (see also paragraph 30 of document S/C/W/62)
.   These Memoranda cover
exchange of information about ships, their records and the results of inspections carried out.  They
also ensure that port state inspections are carried out in a uniform manner, and that similar standards
are applied with regard to detention of ships and the training of inspectors.
34. During the period under review, three more Memoranda of this kind were signed:  the Indian
Ocean MOU on Port State Control, signed in Pretoria on 15 June 1998 by 15 countries;  the MOU forthe Western and Central African region signed in Abuja on 22 October 1999;  and the Black Sea
MOU signed in Istanbul in April 2000.  A similar MOU is in preparation for the Persian Gulf region.
35. On 28 June 2000, the United Kingdom, Spain, France, Singapore and the European
Commission signed a MOU setting up the Equasis In formation System, which is aimed at collecting
safety-related information on the world merchant fleet.  The US coastguards and the JapaneseMaritime Administration are reported to consider joining this MOU.
(d) European Union
36. Following the catastrophes of Ievoli Sun (October 1999) and of Erika (December 1999) the
Commission presented on 21 March 2000 a Communica tion on Safety of the Seaborne Oil Trade
(COM (2000) 142) together with legislative propos als to:  strengthen controls in ports (refusal of
access to substandard hips, more stringent inspections, greater transparency);   monitor more closely
the activity of classification societies to which Member States delegate their powers to verify the
quality of structure of ships;  and generalise the ban on single-hull tankers.
37. The European Parliament and the Council of Ministers acted promptly on those proposals.
On 21 December 2000, the Council reached agreement on:
- reinforcing controls over classifica tion societies and their responsibilities;
- setting a target of 4400 ships to be inspected on the basis of age, flag, results of safety
inspections;
- banning from European waters "high risk" and "very high risk " ships, notably those
that have been arrested and detained twice for safety reasons in the past 24 months;and
- setting a calendar for elimination of single-hull tankers to be, if possible, harmonized
with an IMO schedule.
16
38. On 8 December 2000, the Commission also presented a Communication (COM (2000) 603)
proposing a second package of measures to improve maritime safety, together with legislative
proposals to establish a Community maritime traffic monitoring, control and information system;  a
European oil pollution compensation fund;  and a European Maritime Safety Agency.
                                                     
16 See also section on IMO above.S/CSS/W/106
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4. Electronic trade
39. The performance of the shipping sector depends on information flows preparing and
accompanying the physical transport of the goods.  As in the case of air transport computer
reservation systems, e-trade on dedicated professional networks pre-existed the Internet.  The
commonly agreed format for professional message s, EDIFACT (Electronic Data Interchange for
Administration, Commerce and Transport) was completed in 1992 under the aegis of the UnitedNations.  Internet gave a new impetus to e-trade in shipping, and professional web-sites appeared as
early as 1995.
40. There is a multitude of possible applications for e-trade in shipping.  UNCTAD lists the
following examples:
For shipping lines:  on-line information on sailing schedules;  tariffs;  independent action rates
and service contracts;  rate changes;  surcharges;  calculation of rates;  negotiating rates;
sending shipping advice;  transmitting booking requests and booking confirmation; sendingpacking lists;  export declaration;  shipping instructions;  commercial invoices;  producing
bills of lading;  confirmation of loading;  authorizing payment;  tracking of shipments;  B to B
procurement platforms;  exchange of containers between lines;  and chartering ships or space.
For ports:  on-line notification of port tariff schedules;  control of shipping traffic;  guiding
into harbour ships of different characteristics;  information on incoming and outgoing ships;
information on dangerous substances and safety readiness;  information on cargo
characteristics.
41. Due to lack of harmonized data, it is difficult to assess the volume and identify the main
players of business through e-channels, and develop a view on the long-term viability of different
services.  Sites have flourished, some have gone bankrupt and many others have scaled down their
ambitions.  While some Sites had hoped to automatise negotiations of freight rates by the shippers,
and bypass freight forwarders, they have repositioned themselves as information providers financed
by advertisements and subscriptions.
42. Prominent Sites include Setfair, One Sea and shipVertical for procurement, Ocean Connect
and Smartbunkers for bunkering, ShipDesk and LevelSeas for chartering, GoCargo for cargo booking,
Synchronet and Interasset for equipment exchange ,  Bolero and tradiant for processing documents,
Portsnportal and Portnet for ports.  It is also likely that the Sites created by major shipping companies
will survive:  INNTRA founded by P&O – Nedlloyd, Hamburg Süd, CMA-CGM, Maersk Sealand,Mediterranean Shipping Company, Hapag Lloyd
,  Columbus line, Crowley, Safmarine, ANL and
Aliança (offering tracking and online booking services)  and of GT/Nexus founded by APL, ANZL,
Canada maritime, Cast;  Contship, Lykes Lines, TMM, Hanjin;  Hyundaï, K-line, Mitsui OSK lines,
Senator Lines, Yang Ming and ZIM.
II. SECTORAL DEVELOPMENTS
A. CRUISE SHIPPING
43. The cruise industry, emerging from what has been left of passenger shipping after the advent
of jets, has meanwhile become a major sector with positive growth prospects. In 1999, cruise ships
carried 8.75 million passengers, 12 per cent up from 1998.  North America accounted for 5.9 million
passengers, followed by Europe with 2 million.17
                                                     
17 Source:  G.P Wild (international) Ltd.S/CSS/W/106
Page 12
CHART 1
Number of cruise tourists between 1982-1999
∆United Kingdom
■Europe
◊North America
X World
44. The major host markets or sailing regions, in terms of capacity deployed are:
Caribbean/Bahamas (45%);  Asia/South Pacific (17%);  Mediterranean (13.5%);  Alaska (5.5%);
West Coast of Mexico (4.5%);  and Northern and Western Europe, (3.5%).18  Total turnover of the
industry was estimated at US$6.7 billion in 1998.  The sector employs over 90,000 persons directly
onboard who are mostly involved in hotel (70%) a nd entertainment activities (9%).  In view of
numerous impending ship deliveries, employment is estimated to increase by 40,000 to 60,000 by
2004.19
45. A study conducted in 1999 by Business Rese arch and Economic Advisors (BREA) and by
Wharton Economic Forecasting Associates (WEFA), concluded that the US cruise industry generated
almost 210,000 American jobs, that direct spending of cruise lines and passengers in US goods and
services amounted US$8.1 billion and that the overall economic benefit for the US totalled some
US$15.5 billions.20  The WTO Secretariat is not aware of similar studies for other countries or
geographical regions.
46. In addition to the 300-odd ships with 210,000 beds that are actually operating, 54 ships
(103,000 beds) are firmly ordered until 2004.  Positive marked expectations have been fuelled by two-digit growth rates over the past two decades.  Unlike  the freight market, cruise shipping seems to offer
significant potential for growth.  Conservative forecasts, based on a comparison of market penetration
ratios between the United States (1.95 per cent per head of population) and Europe (around 0.4 per
cent in France, Italy, Germany, Benelux and Scandinavia and 1.28 per cent in the UK) see an
additional potential in Europe of 5.5 million passengers.  Perspectives are also bright in Asia.
21
47. Continued market expansion was accompanied by a process of industrial consolidation.  For
example, in May 2000, Star Cruise from Singa pore took over Norwegian Cruise Lines (NCL) .   I n
                                                     
18 Source:  "Cruise Industry News Annual, 2000".
19 Source:  Jim Evans Associated Ltd.
20 Source:  http://www.icl.org/pressroom /press 39.htm.
21 Star Cruise has extended its operations from bases in Singapore and Malaysia to South Korea,
Thailand, Taiwan and Japan, and has made some limited moves towards India and the Middle East.  Otheroperators could soon emerge in Japan, South Korea and India.S/CSS/W/106
Page 13
July 2000, Royal Caribbean Cruise acquired 20 per cent of the capital of the tour operator First
Choice;  and in August 2000, Carnival Corporation t ook over 100 per cent of Costa Crociere in which
it had already held a 50 per cent stake since 1997.  The four leading companies - Carnival
Corporation, Royal Caribbean Cruises, Star Cruise s and P&O - represented 75 per cent of the market
in 2000.
48. For cost reasons, most of the cruise fleet operates under open registry flags, with ownership
concentrated in relatively few countries:  US, Norway, United Kingdom, Singapore, Greece, Italy,
France and Japan.  While high capital cost may deter new entrants, one economically potent
newcomer has appeared recently:  Walt Disney Cruise has been operating since April 1998 two 2400-
passenger ships between its Florida parks and an island in the Caribbean.
49. Recent economic and technical developments include the use of sophisticated computer
reservation systems using yield management techniques and adjusting tariffication to the load factor
of the ship;  the development of short-duration cruises;  the development of package including airtickets;  arrangements and of pure "fun cruises" with no specific destinations ("nowhere cruises"),
marketing efforts towards a younger clientele;  the construction of larger ships (now exceeding over
100,000 gross tons and 2000 passengers); 
  the globalization of the industry with mature US operators
taking over European companies; the emergence of strong Asian operators;  and the survival of niche
luxury operators.
B. OTHER PASSENGER TRANSPORT (FERRY SERVICES )
50. Ferry markets tend to be local or regional, and it is relatively difficult to find aggregated data.
According to sources quoted by OECD22, ferries carry annually over 250 million passenger worldwide
and the market is expected to increase at 10 per cent per annum.  Fleetward Associates estimates the
worldwide fleet of ferries at 1110 units at present, 60 per cent of which are in Europe. 23  The abolition
of duty-free sales inside the European Union and the creation of fixed links (between UK and France
and between Denmark and Sweden) has led to significant withdrawals of fleet and a departure from
previous trends towards ever larger units.  Another significant development is the growing number of
fast ferries, notably fast car ferries of which over 100 are currently in service, mostly in Europe.
51. From a geographical point of view, the Baltic region, Northern Europe, the Mediterranean,
South East Asia and Japan are the main ferry markets.  A large part of the fleet providing international
links (e.g. across the Channel or between Italy and the French island of Corsica) uses open registry
flags for cost reasons.  Ferries operating only in national waters are subject to cabotage laws which
generally, but not always, prescribe the use of national flags and recruitment of national seafarers.
Services to remote locations are often subject to public service obligations, with the costs oftencovered by subsidy schemes.
52. An important regulatory development during the period under review is the termination on
1 January 1999 of an exemption granted under Article 6 of Regulation No. 3577/92
24 to five Southern
EU Member States.  The exemption concerned regular passenger and ferry services as well as island
trades and allowed Member States to reserve cabotage traffic for national flag ships.  This traffic is
now open to vessels registered in other Member States and participants of the European Economic
Area .25
                                                     
22 "Setting the Scene, the Challenge Ahead" by Danny Scorpecci at the Symposium on "Port and
Shipping on Millennium", organized by the Lloyd's list.
23 The figure does not include the large number of small passengers and mixed vessels serving islands
and coasts  all over the world.
24  Official Journal, L364, 12 December 1992.
25 An exemption for regular passenger and ferry services provided by vessels of less than 650grt
remains in Greece until 1 January 2004.S/CSS/W/106
Page 14
53. A draft Community Directive seeks to regulate the terms of employment of third-country
nationals onboard passenger and ferry services be tween Member States.  They would be guaranteed
the terms and conditions laid down by law and/or collective agreements which are applicable to the
residents of the Member State where the vessel is registered or otherwise the terms and conditions of
one of the Member States between which the vessel operates.
C. BULK SHIPPING
54. Bulk shipping consists of carrying single cargoes  in large volumes.  For analytical purposes a
distinction is normally made between principal types of commodities:  dry bulks (industrial raw
materials e.g. coal, iron ore and bauxite/alumina, and foodstuffs such as grain and sugar) ,  petroleum
(crude oil , condensates and refined products) ,  liquefied gases (LNG and LPG), and liquid chemicals.
Developments during the period under review are pr esented in Annex 2;  apparently, no significant
structural changes have occurred in this subsector.
55. The fleet continues to be in the hands of a large number of small owners with one or two
vessels.  However, many of these "single-ship companies" are beneficially owned by larger groups,
with the legal separation being aimed at safeguarding the rest of the fleet in the event of significant
losses.  This applies particularly to the tanker sector.
56. Competition has remained intense, leading to lo w freight rates even if a large part of the
traffic is carried under long-term contracts (iron or e, LNG, LPG and chemical trades).  Unlike in the
liner sector, cooperation among shipowners tends to be limited to rudimentary forms of pooling,
which are not normally stable over the business cycle.  During the period under review, the Secretariat
is not aware of any competition cases involving the bulk sector.  Stiff competition explains why the
sector has relied earlier and more widely than liner shipping on open registries and low-cost seafarers.
As shown in Annex 2, this tendency has continued during the period under review.
57. Given the volatile nature of bulk traffic and the relatively low value of the cargo involved,
governments have not generally operated cargo reservation schemes.  In 1998, one of the few such
schemes was abolished;  Korea removed the last three items (liquefied gas, iron ore and coal) from a
list of products it had undertaken to liberalize when acceding to OECD in 1996.
58. A previous trend towards ever larger units has apparently come to a halt and has sometimes
been reversed (e.g. there are no more Ultra Large Crude Carriers, written over 500,000 dwt, as there
were in the seventies).   Shipowners do not have the same "scrap and build policy" as the liner
shipowners;  the average age of the fleet is higher (over fifteen years in certain subsectors) while the
goods transported are potentially more pollutant (oil, chemicals).  Safety and pollution problems are
thus more acute in the bulk sector which, as result, has attracted more attention from regulators.
D. LINER SHIPPING
59. Concentration in the sector has continued in the period under review.  The top 20 liner
operators, 11 of whom are based in Asia, accounted for close to 70 per cent of capacity in 2000, up
from less than 50 per cent in 1997 (see Annex 4).  This trend is likely to continue with the entry into
service of ships that were on order at the end of 1999 with an additional capacity of 325,000 TEU.
60. Operators grouped in alliances accounted for 45 per cent of the capacity available in 2000.
They are highly concentrated on the three main north-north routes:  Asia/North America;  NorthAmerica/Europe;  and Asia/Europe.  Apart from the commercial advantages of hub-and-spoke
operations, one of the main factor driving the expansion of alliances are the costs associated with
movements of empty containers. Cooperation among shipping lines helps to diminish these costs.
Membership of alliances has remained surprisingly stable compared to traditional liner conferences.S/CSS/W/106
Page 15
1. Market Access and Liberalization Policies
61. "Traditional" access issues linked to the implementation of unilateral cargo reservation or
cargo sharing provisions have continued to loose relevance during the period under review.  They
have increasingly been replaced by a stronger focus on the scope of admissible business operations
and of onshore establishment rights.  This focus is reflected both in pure maritime bilateral treaties
and in the shipping provisions contained in broader trade and economic integration agreements.Examples include the Europe Agreements between th e EU and Estonia, Latvia and Lithuania (1998),
the EU's Partnership and Cooperation Agreemen t with Ukraine (1998) the Poland-South Africa
Maritime Agreement (1999), the Poland-Morocco Maritime Agreement (1999), the Free Trade
Agreement between Mexico and the EU (2000),  and the Agreement between the Asia-Pacific-
Caribbean (ACP) countries and the EU (2000).
62. Liner shipowners have continued to complain about trade barriers.  For instance the European
Community Shipowners Association lists in its Annual Report for 2000 the following restrictions
faced by its members:
26  foreign equity ceilings;  restrictions on establishment of own branch offices;
limitations on government cargoes;  discriminatory taxation and port charges;  restrictions in the
feedering of international cargoes between national ports;  cumbersome procedures and/or personal
harassment during port calls, as well as unrealistic and unjustifiable liability claims by customs
administrations.  Apart form these more general observations, there are country-specific complaints
about:  discriminatory lighthouses dues;  and discriminatory anchorage and waterfront operations.
Many of these complaints concern measures or practices in developing countries.
63. Section 19 of the US Merchant Marine Act provides, and has been used as, an instrument to
address perceived market access restrictions.  In 1998, the US removed an exemption from the
payment of a special tonnage tax previously granted to Brazilian ships.  This was in response todiscriminatory tax and duty preferences Brazil had extended to imports carried on ships in the second
register, REB.  The issue was solved in consultations.  In October 1999, the two countries signed a
new three-years Maritime Agreement granting equal access for each other's carriers to government
cargoes and providing for non-discriminatory treatment with respect to maritime services and other
matters such as shipping taxes.  In 1998, the Federal Maritime Commission (FMC) opened aninvestigation into laws, rules, and policies of China that appear to have an adverse impact on US
shipping, and may merit further action under Section 19 of the Merchant Marine Act, 1920, or the
Foreign Shipping Practices Act of 1988.
2. Competition policies
27
64. As a first approximation, five forms of cooperation among shipping lines can be
distinguished:28  conferences, consortia, alliances, agreements between conference and non-
conference members (discussion or capacity stabilisation agreements), and mergers.  As a general
feature, it appears that the number of conferences and their impact on prices has decreased in recent
years.  Coincidentally, new forms of cooperation, such as consortia, alliances and mergers, have
emerged.  They are generally regarded favourably by competition authorities in view of expected
productivity gains.  Opinions are more diverse with regard to discussion or stabilization agreements.
                                                     
26 http://www.ecsa.be/annualreport/item05.htm.
27 This section draws largely on the descriptive part of OECD document DSTI/DOT/MTC(99)8
"Discussion Document on Regulatory Reform in International Maritime Transport".
28 Different approaches may coexist or overlap, and the relevant legal definitions and concepts may
vary significantly between jurisdictions.S/CSS/W/106
Page 16
(a) Conferences
65. Conferences, the oldest form of shipowner co operation, first appeared in the 1870s.  They can
be defined as groups of two or more vessel-operating carriers which provide international liner
services for the carriage of cargo on particular routes for which they have agreed to apply uniform or
common freight rates and any others conditions (e.g. coordination of sailing dates and dates of call,
determination of frequencies, regulation of capacity, and allocation of cargo and revenues).29
66. The share of conferences in liner trade has continued to decline.  Although detailed figures are
lacking, it is now estimated at 50%;  independent operators or "outsiders" account for a similar share.
As already noted, the number of conference seems to have declined as well.  For instance, while for
traffic involving the United States, 32 conference agreements were filed with the Federal Maritime
Commission in 1997, only 22 were filed in October 2000.  Only one conference operated in the major
East-West trades.30  The two conferences operating on the US-Asia route chose to dissolve themselves
on the day of entry into force of new US competition legislation, the Ocean Shipping Reform Act(OSRA).  Apparently all conferen ces are now open, i.e newcomers cannot be denied entry.  While
open conferences have always been mandatory on US trades, close conferences are not banned in
many other jurisdictions.
67. Conferences that pre-existed competition legislation, have generally enjoyed antitrust
immunity.  This lenient approach is based on the assumption that the industry needs flexibility to
weather the endemic volatility of prices and demand.
31  The introduction of progressively larger ships,
imbalances and seasonal fluctuations in trade flows, and the influence of non-commercial factors such
as national prestige and security has led to chronic overcapacity.  As a result, carriers have tended to
compete aggressively and bid rates down to levels below cost.  A degree of antitrust immunity is thus
intended to prevent over-adjustments in the market and, in addition, to allow for a range ofefficiency–enhancing arrangements.  Carriers may team up to share larger and more efficient vessels,
terminals and other assets.  Such cooperation may facilitate entry into new trades.  Alternatively,
carriers might consider mergers which appear less desirable from a competition perspective.
68. During the period under review, antitrust immunity of conferences was discussed in various
fora and contexts.  Whenever challenged under competition law, it has been confirmed by thecompetent authorities, subject, however, in many in stances to the conclusion of confidential services
contracts between the shippers and individual members of the conference.
69. In 1999, the OECD Secretariat circulated a Discussion Paper on "The Review of Regulatory
Reform".32  It recommended, inter alia,  to remove immunity from the ap plication of anti-trust law for
                                                     
29 See Articles 1.3(b) and 3 of Council Regulation (EEC) 4056/86 of 22 December 1986 "Laying Down
the Detailed Rules for the Application of Articles 85 and 86 of the Treaty to Maritime Transport" , Official
Journal  L378 of 31 December 1986.  Definitions in other juri sdictions are similar.  However, US legislation
increasingly denies conferences price fixing authority.
30 Speech delivered by Harold J. Creel, Chairman of the Federal Maritime Commission, before the
1st Lloyd List International Shipping Convention on 19 October 2000.  See http://www.fmc.
gov/speeches/creel/london%2010-19.htm.
31 According to a speech of the Chairman of the US Federal Maritime Commission delivered in
March 2001 before the 4th Annual Conference of Containerisation International (see:
http//:www.fmc.goiv/speeches/Creel/london-Mar27.htm).  Similar views can be found in the 6th and 7th recitalsto the EC Council  Regulation 4056/86 or in the 1999 review by the Australian Productivity Commission of the1974 Trade Practice Act (see http://www.pc.gov.au/inquiry/shipping/index.html).
32 DSTI/DOT/MTC(99)8 "Discussion Document on Regulatory Reform in International Maritime
Transport".   In 2000, a World Bank Research Paper, based on econometric modelling, developed similar ideas.
"Trade in international maritime services:  how much does policy matter?" by Carsten Fink, Aaditya Mattoo and
Cristina Neagu, World Bank Research Group.  For a conflicting opinion see "A review of trade in internationalmaritime services" by the World Shipping Council, May 2001.S/CSS/W/106
Page 17
common rate fixing by conferences.  In May 2000, a joint workshop involving the industry considered
the findings of this paper.  Shipowners and a number of OECD Governments noted that the current
system was working, that the liner industry was stru cturally different from other industry sectors, and
that the exemptions were necessary to ensure the stab ility of services to shippers;  the need for change
had to be established by the proponents.  Reportedly, several OECD governments recently re-
examined their position vis-à-vis  the exemptions and saw no compelling reason for change.33
Following the workshop, the OECD Secretariat decide d to further study the implications of common
pricing.  A further workshop is scheduled for December 2001.
70. In the United States, the Ocean Shipping Reform Act (OSRA) became effective on
1 May 1999.  The Federal Maritime Commission issued its final rules of implementation on 1 March
2000 and circulated an interim status report on implementation in June 2000.34  The OSRA continues
to provide antitrust immunity for conferences and, more widely, for agreements between ocean
carriers, but imposes significant constraints.  In particular, it eliminates conference control overservices contracts, i.e. over the individual medium-to-long-term contracts between carriers and
shippers.  The rates agreed to by the parties are no longer made public and carriers are no longer
required to offer the same deals to other shippers.  Carrier conferences must not prohibit or restrict
their members from offering services contracts, but they are allowed to issue "voluntary guidelines"
for such contracts.
71. In the European Union, the legislative framework remained unchanged during the period
under review (Regulation 4056/86 of 22 December 1986), but the Commission issued several
Decisions.  In September 1998, the Commission imposed fines of US$251 million on the 15 parties of
the TACA conference, for inland price fixing, the fixing of brokerage and freight forwarder
remuneration, a collusion and abuse concerning the terms and availability of individual servicescontracts, and for attempts to alter the competitive structure of the market.
72. The Commission also held discussions with carriers and shippers with a view to resolving
conflicts and creating a more open and competitive environment for liner shipping.  These discussions
resulted in a tentative set of principles calling on conferences operating on Community trades to place
no restrictions on the right of their members to enter into confidential services contracts, and nolonger fix inland prices in Europe.  The latter principle was combined with the possibility of adopting
a "not-below-cost " clause.  At the beginning of 1999, the Commission received the notification of the
revised TACA Conference Agreement based on these principles.  While the maritime aspects of the
Agreement are still under review, the Commission appr oved its inland-related part in August 1999.
73. These developments point to increasing regulatory convergence between the US and the EU,
but certain differences of positions have remained.  Inland price fixing by conferences or carrier
agreement is allowed in the Unites States, subject to filing and control by the FMC. The filing
requirements, review and waiting periods provided for in US legislation, do not have a counterpart in
the EC, where the Block Exemption granted under Regulation 4056/86 dispenses conferences from
filing.
74. Japan reviewed previous a exemption system from the Anti-Monopoly Law  and amended the
Marine Transportation Law in 1999.  The changes are intended to promote "fair and free competition
among carriers as well as to secure a stable supply of ocean going shipping services".  While
maintaining a system of block exemptions, the amendments introduced an examination procedure
which enables the Minister to take correcting measures against individual agreements which are
deemed not in compliance with certain criteria (e.g. no undue restrictions of competition or
impairment of user interest).
                                                     
33 For details on individual positions see the report DSTI/DOT/MTC(2000)2 dated 27 November 2000.
34 http://www.fmc.gov.S/CSS/W/106
Page 18
75. In 1999, Australia conducted a review of its competition legislation governing liner shipping
(Section X of the 1974 Trade Practices Act).  The review led to certain amendments, including the
application of Section X to inward conferences, the creation of new investigatory powers in case of
refusal of new members in a closed conference, a nati onal interest test to better take into account the
interests of shippers, and a greater range of sanctions.35  These amendments came into force on
2 November 2000, except for those concerning inward conferences (2 March 2001).
76. Canada also begun a review of its 1987 Sh ipping Conference Exemption Act (SCEA) in
January 1999.  On 2 March 2001, the Government introduced a bill (Bill C-14) providing for various
amendments to the SCEA, including the abolition of a tariff-filing requirement with the Canadian
Transport Agency, the shortening from 15 to five days of the period during which a member has to
notify other members of its intention to take independent rate action; the right for individual
conference members to negotiate confidential services contracts;  and the increase of fines in case of
non-compliance with the Act from Can$1,000 to Can$10,000 a day.36
(b) Consortia
77. Consortia are agreements between liner shipping companies aimed primarily at operating joint
services by means of technical, operational or commercial coordination (e.g. joint use of vessels, port
installations, marketing organisations, etc.).  The regulatory treatment of consortia may vary from
jurisdiction to jurisdiction.  Under the legislations of Australia, Canada, Japan, New Zealand and theUS, they seem to quality for immunity from anti-trust law, without regulating whether ship operators
apply uniform or common freight rates. 
37
78. In the European Union consortia are not granted price fixing authority, except if they obtain
an individual exemption under Regulation 4056/86 to that effect.  Regulation 870/95 allows group
exemptions for consortia whose market share does not exceed 35 per cent if members are not part of aconference (30 per cent if members are part of a conference).
 38  For market shares between 30-35 per
cent and 50 per cent, a simplified opposition procedure applies;  the consortium benefits from the
group exemption unless the Commission objects within six months of notification.  In the event of
higher market shares, the consortium may apply for an individual exemption.  The provisions
governing the granting of block exemptions were renewed in April 2000 under CommissionRegulation 23 /2000
39 for five years with no significant changes.
(c) Alliances
79. Strategic or global alliances, which became operational at the beginning of 1996, establish a
framework for cooperation on a Worldwide scale among the same group of companies.  Such
alliances typically embrace at least two of the major east/west trade routes (Europe/Asia, Asia/US, orUS/Europe) served either by combined services on each route or round-the-world services.  The
parties agree, inter alia,  on utilization of vessels, including joint vessel route assignments, itineraries,
sailing schedules, the type and size of vessels to be employed, additions and withdrawal of capacity,
ports and port rotations on a global scale.  The agreement typically covers charters, space charters, use
of joint terminals and containers, pooling of containers, establishment of container stations, vessel
feeder routes, co-ordination (where permitted) of inland services, information exchanges and relevant
procedures.  In other words, each participant's services are fully integrated into one operating
                                                     
35 See: http://www.dotrs.gov.au/media/anders/archive/1999/dec_99/a207_99.htm.
36 See. http://www.tc.gc.ca/releases/nat/01_h033e.htm.
37 Source: OECD DSTI/DOT/MTC(99)8, "Discussion Document on Regulatory Reform in
International Maritime Transport".
38 Official Journal L89, 21 April 1995.
39 Official Journal L100, 20 April 2000.S/CSS/W/106
Page 19
system.40 Participants in alliances include may national and cross-traders, as well as conference and
non-conference lines.
80. From a legal perspective, global alliances are no different from consortia or carrier
agreements.  Parties have thus far implemented their alliances by way of route-specific agreements
taking into account the regulatory regimes or transport conditions on individual routes.  Competition
authorities have not yet challenged alliances, but are closely monitoring them.  The US authoritiesseem to have developed a positive view of the effects of alliances in terms of rationalization and
customer benefits.
41  On both the US and the EU sides, alliances are seen as a way to avoid mergers
which could lead to increased concentration and oligopoly situations.42  Nevertheless, the EU
authorities are considering whether the definition of the relevant market,  which is so far on a "trade-
by-trade" basis, should be extended or complemented by a more global approach.43
(d) Agreements between conference and non-conference members (stabilization or discussion
agreements)
81. Efforts by conferences to regulate capacity may be thwarted, in certain instances, by
competition from non-conference operators.  Such situations have resulted in "stabilization segments"
across trade or regions, or in looser, non binding "discussion/talking agreements" and the like.
82. In Australia, Japan, New Zealand and the US, conferences or individual members of
conferences are allowed to enter into agreements with non-conference shipping lines;  no particularrestrictions apply.  In Australia, such agreements must be registered, however and are subject to
reinforced oversight since the 2001 amendment of Section X of the Trade Practices Act.  In the US,
such agreements are subject to the same procedures as any other form of agreement between carriers.
This relatively lenient approach may be explained by the agreements' perceived positive impact on the
stability of services and efficient capacity management.
83. Other countries have adopted a different stance;  Canada has agreements exempted only inter-
conference agreements, but not agreements between conference members and non-conference
operators from the relevant competition provisions.
84. In the European Union, such agreements do not benefit from the Block Exemption, and the
Commission has recently issued several Decisions against them.  In the EATA case, it prohibited acapacity-management programme between conference and non-conference lines, which was
combined with direct price-fixing.
44  At the beginning of 2000, the Commission launched surprise
inspections of shipping companies suspected of fixing prices outside the scope of the conference
                                                     
40 By contrast, strategic or global alliances do not cover:  joint sales, marketing or joint
maritime/multimodal pricing;  joint ownership of vessels or maintenance or insurance;  joint or common bill(s)
of lading;  common tariffs;  joint management and executive functions;  revenue pools or cargo pools;  andsharing of profits/losses.
41 See, for instance, the statement of the Chairman of the Federal Maritime Commission before the
Committee on the Judiciary of the House of Representatives on 22 March 2000
(http://www.fmc.gov/speeches/creel/creel.htm).
42 See http://www.fmc.gov, and "Liner shipping:  Market Developments and Government Action – the
EU Competition Policy Perspective" speech delivered by Jean François Pons, Deputy Director-General of the
Competition  Directorate of the European  Commission at the 1st Lloyd List International Shipping Convention,
18-22 October 2000.
43 Ibid.
44 Official Journal L193, 26 July 1999.S/CSS/W/106
Page 20
block exemption.  In May 2000, the Commission's FETTCSA Decision came against an agreement
between conference lines and independent operators not to grant discounts on published tariffs. 45
(e) Mergers
85. In the mid 1990s, the liner shipping industry started a process of transnational consolidation.
Mergers and acquisitions were already common before, but remained generally confined to the
national level.  The most significant mergers and acquisition in the sector occurred before the periodunder review (P&O from UK and Nedlloyd from Netherlands, and the acquisition of the US carrier
Sealand by Maersk from Denmark).
86. The acquisition of DSR/Senator Line from Germany by Hanjin from Korea is probably the
first case where a line from a developing country, although member of the OECD, has taken over a
line from a developed country.  In the United States, most of the major international liner shipping
companies have passed under foreign control, involving Singaporean, Danish, German and Anglo-
Dutch companies.
46  The Federal Maritime Commission (FMC) has repeatedly stated in this context
that it would not change its policy with regard to the use of the section 19 of the 1920 Shipping Act
and its related instruments47, the mission of the FMC was not limited to pursuing US beneficial
interests in shipping, but more widely to defend US flags and maritime trade objectives.
87. Where mergers have been submitted to competition authorities for authorization, subject to
the relevant thresholds, they have not so far been objected to.  This is probably due to the fact that, byother industries' standards, the liner shipping sector is still not very concentrated.  For instance, at the
time of the merger, the combined fleets of Maersk and Sealand represented 12 per cent of the capacity
Worldwide and a 30 per cent market share on the transatlantic routes.
E. O
FFSHORE OPERATIONS
88. Little information is available on this subsector, which has not been the subject to focused
negotiations during the Uruguay Round and since.48  It has, however, been mentioned recently in the
context of discussions of energy-related services and negotiating proposals regarding maritime
transport. Elements of a possible sector definition are contained in the "Guidelines concerning the
transport activities of mobile offshore vessels" , which are annexed to the OECD Common Shipping
Principles.49  Paragraph 4 defines mobile offshore vessels as "vessels that are engaged in activities
associated with the exploration or exploitation of the non-living natural resources on or below the
                                                     
45The 1999 OECD Discussion Paper on "the Review of Regulatory Reform" also recommended the
removal of immunity for shipping lines entering into discussion and capacity stabilization agreements.  SeeDSTI/DOT/MTC(99)8 "Discussion Document on Regulatory Reform in International Maritime Transport".
46See the recent TPR Report for the United States (WT/TPR/S/88), paragraph 41.
47See, for instance, remarks of the Chairman of the FMC before the 88th Annual Convention of the
American Association of Port Authorities, on 28 September 1999
(http://www.fmc.gov/Speeches/creel/SPAAPA.htm).
48 There have been five references in replies to the Maritime Questionnaire, generally about the
composition of the fleet;  two references during the examination of the Questionnaire;  one in a conditional offerthat did not translate into commitments;  and one in a Schedule of Commitments which expressly excluded thissubsector.  (Australia used the following definition:   "Offshore Transport refers to shipping services involving
the transportation of passengers or goods between a port located in Australia and any location associated with or
incidental to, the exploration or exploitation of natural resources of the continental shelf of Australia, the seabed
of the Australian coastal sea and the subsoil of that seabed;"  see documents S/C/6).
49 The complete text of these Guidelines can be found at: http://www.oecd.org/dsti/sti/transpor/sea/act,
 page 7.S/CSS/W/106
Page 21
seabed".50  The scope of the OECD Guidelines is limited to the transport activities of mobile offshore
vessels.
89. A search on potentially relevant private web sites reveals considerable diversity concerning
the types of vessel and activities covered.51  Table 1 of Annex 6 provides an overview and suggests
possible CPC correspondences.  Table 2 of the same Annex contains a description of the offshore fleet
at the end of 2000, by types of vessels, countries of registration and countries of beneficial ownership.The bulk of the fleet, comprising of some 3200 vessels, consists of two types:  offshore supply ships
and offshore tug/supply ships.  The large difference in numbers between countries of registration and
of beneficial ownership reflects the role of open registries.  Nevertheless, in some cases, the country
of registration corresponds to the country of beneficial ownership, meaning either that the companies
concerned are sufficiently prosperous to cover higher crew costs or that they are subject to national
flag restrictions.  Available data do not allow, however, for more detailed inferences.  The fact that the
geographical patterns of registration and, more so, of beneficial ownership depart significantly fromtraditional shipping patterns reflects the increasing ro le of large oil-producing countries as owners and
operators.  The regional distribution of oil rigs may provide a rough approximation of the fleet that
serve them:  North Atlantic (14%);  Gulf of Mexico and Caribbean (41%);  South America (8,7%);
West and South Africa (9%);  Pacific Rim (8%);  and others (17,%).
52
F. OTHER MARITIME TRANSPORT
90. This is a residual category contained in the Maritime Model Schedule as well as, with slightly
different definitions, in the annual UNCTAD "Review of Maritime Transport".  It cover traffic which
is neither liner nor bulk or tramp.  The Secretariat is not aware of significant regulatory developments
during the period under review, with the general impression being that the relevant  subsectors are
free of market access restrictions.
G. PORT SERVICES AND MARITIME AUXILIARY SERVICES
1. Economic developments
91. In April 1999, the International Association of  Ports and Harbours (IAPH) published a study
on the growing involvement of the private sector in port activities. 53  This study gives a reasonably
comprehensive picture, based on a questionnaire on which IAPH received 188 answers from61 countries, 54 of which are WTO Members.
92. The vast majority of respondents indicated that they were a public sales agency or corporation
established by government (71 per cent).  Only 7 per cent were private companies, mostly with
significant government shareholdings.  The role of the private sector has increased over the past two
years in one-third of the ports covered.
93. Tables 1 and 2 in Annex 7 try to establish correspondences between the nomenclature used by
IAPH, CPC provisional, and the Maritime Model Schedule.
54
                                                     
50 These Guidelines stipulate that "Governments of Member countries of the OECD should secure free
trade in transport services rendered by mobile offshore vessels and refrain from measures giving preferential
treatment to national flag vessels"(paragraph 1).  The statement applies to transport activities of mobile offshorevessels "beyond the territorial water of a Member country" (paragraph 3).
51 See for instance  http://www.oilpubs.com/oso/archive/left.htm or http://www.barges.com.
52 Source: "Platou report 2001" , page 29 , downloadable from http://www.platou.com/platoureport.htm.
53 "IAPH Task Force, final report of  the Institutional Reform Working Group", April 1999.
54 Similarly constructed Tables have been used in the past by the Secretariat to describe airport services
(see S/C/W/163/Add.1 Tables 12 and 13, pages 30 to 35).S/CSS/W/106
Page 22
94. The majority of ports owns key infrastructural assets such as breakwater (77 per cent public
ownership), access channels (87 per cent), land and wharves (86 per cent for container and general
cargo terminal land, 78 per cent for bulk terminal land, 80 per cent for container and general cargo
wharves, 75 per cent for bulk terminal wharves).  The ownership of handling equipment and cranage
is lower than for infrastructure, but remains important for both container terminals (58 per cent) and
general cargo terminals (50 per cent).  A significant number of respondents indicated that suchsuperstructures are provided by private companies:  22 per cent for container terminals, 25 per cent
for general cargo terminals, and 44 per cent for bulk handling equipment.
55  Private involvement in
individual port operations amounts to 40 per cent for warehousing, 39 per cent for ship agencies
between 34 and 37 per cent for stevedoring, 13 per cent for navigational aids, and 6 per cent for
harbour master services.
95. According to World Bank data at end 1998 there were around 100 port concessions or BOT
contracts signed Worldwide for a total private investment amount of US$6.3 billion.56  Of the projects
signed, 42 per cent were in Latin America and the Caribbean, 38 per cent in East Asia and Pacific,
7 per cent in South Asia, 5 per cent in the Middle East and North Africa, 4 per cent in Europe and
Central Asia, and 4 per cent in Africa.  Most of the investments concerned container terminals, with
the rest focusing on grain, coal and liquid bulk terminals.  Non-specialized general cargo facilities
have not attracted significant private financing.  The World Bank anticipates growth of worldmaritime traffic between 3 to 5 per cent annually from 1998 to 2010, which in turn, would require 200
to 300 new full-fledged container terminals until 2005.
96. Annex 8  gives an indication of the structure of operations of the world's five leading terminal
operators.  They consist of four pure terminal operators, Hutchison Port Holdings from Hong Kong,
China (managing 18 harbours in eight countries in 1999);  Port of Singapore Authority (12 harbours
in 6 countries);  P&O Ports from the United Kingdom and Australia (21 harbours in 13 countries);
and Eurokai/Eurogate (three countries).  These operators are complemented by one shipping line
Maersk/Sealand (Denmark/USA) which co vers 15 harbours in 12 countries.
57 The sector is
increasingly concentrated;  in 2000, the top five terminal operators handled 25 per cent of the world
container traffic, while in 1994 the leading ten operators had a share of 14 per cent.  Despite itseconomic weight, the sector is segmented into a variety of different categories under the Maritime
Model Schedule and CPC.
58
97. The list of 33 countries or territories in which those major operators are present is
geographically extremely diversified and includes developed countries as well as developing
countries.59  A recent feature is the involvement of private companies, to a certain extent, in port
management.  For instance, since 1999, France has allowed corporatized public harbours to create
joint ventures with the private sector to manage container terminals and bulk terminals.
                                                     
55 The shares for public and private sectors involvement do not necessarily add up to 100 per cent, due
to incomplete replies to the IAPH questionnaire.
56 Source: http://www.worldbank.org/html/fpd/transport/ports_ss.htm.  In total, there are some 2000
significant shipping harbours.
57 Other major players include Stevedoring Services  of America (USA);  International Container
Terminal Services Inc (Philippines);  ECT (Netherlands, but  in a process of partial takeover by Hutchison),
Ceres Terminals (USA);  Neptune Orient lines/APL (Singapore/USA), OOCL (Hong Kong China);  and
COSCO (China).
58 The activities of container terminal operators to fall under several categories of the Maritime Model
Schedule, including at least maritime cargo handling services, storage and warehousing, container station anddepot services.  Relevant CPC categories are container handling (7110), storage and warehousing (742) and portand waterway operation services (74510).
59 Argentina, Australia, Bahamas, Brunei, Canada, China, Chinese Taipei, Germany, Hong Kong
China, India, Indonesia, Italy, Korea, Mexico, Mozambique, Myanmar, Netherlands, New Zealand, Pakistan,Panama, Philippines, Portugal, Russia, Sri Lanka, Saudi Arabia, Singapore, Spain, Thailand, Ukraine, United
Kingdom, United States, Vietnam and Yemen.S/CSS/W/106
Page 23
98. Another trend, already indicated in document S/C/W/62 has continued in recent years:  the
development of hub-and-spoke systems. They have enabled the share of the leading ten container
harbours in world traffic to increase from 30 per cent to nearly 40 per cent, reflecting transhipments
and additional traffic generated by feedering.  Container transhipment is believed to account for one-
fifth of total maritime container traffic today, and is still growing.60  In certain harbours without large
hinterland, such as Singapore and Hong Kong, transhipment represents over four-fifths of totalactivities (Singapore and Hong Kong handle together as many containers as all US harbours
combined).
99. The expansion of "distriparks" or logistics zones within, or in the vicinity of, harbours has
continued as well.
61  These zones accommodate companies that provide either general logistics
services (storage, loading /unloading; striping stuffing, groupage, consolidation and distribution) or
value-added logistics (repackaging, customizing, asse mbly, quality control, testing, repair, equipment
maintenance, equipment renting and leasing, cleaning facilities, tanking, information andcommunication, safety and security services, offices).   A further step is the creation of inland
logistics centres ("dry ports")  or Inland Container Depot (ICD) where all logistical operations that
need not be carried out in the port itself can take place.
62  Examples include the São Paulo dry port in
Brazil,  the Manila inland container depot in the Philippines, and the Harbin inland port in China.
Relevant operations frequently involve customs clearance.
100. In the absence of relevant information it is di fficult to assess the regulatory conditions under
which private (foreign) port service providers operate.63  A World Bank research paper has attempted
a quantification, based on US imports, suggesting that the lifting of port restrictions would diminish
transport costs by nine per cent in this case.64
2. Regulatory developments
(a) International organizations
101. In September 1998, UNCTAD published its "Guidelines for Port Authorities and
Governments on the Privatization of Port Facilities (document UNCTAD/SDTE/TIB/1).
102. In 2000, the OECD Council adopted Principle 14 of the revised "Common Shipping Policy
Principles", dealing with maritime auxiliary services.  The complete text of this principle reads as
follows:
                                                     
60 The Model Schedule for Maritime Transport contains explicit refers to transhipment activities under
"maritime cargo handling services ".  The mark et access and national treatment columns  "Unbound* except for -
no limitation on transhipment (board to board or via the quay) and/or on the use of on-board cargo handlingequipment."
61 For more information "distriparks" see "Globalization, Privatization and Restructuring of Ports",
(intervention by Marc H. Juhel from the World Bank at the 10th Annual Australian Summit on Ports, Shipping
and Waterfront reform).
62 Certain container-related activities of such dry ports are already covered by the Maritime Model
Schedule which defines "container station and depot services "as" activities consisting in storing containers,whether in port areas or inland, with a view to their stuffing/stripping, repairing and making them available for
shipments".
63 The NGMTS Maritime Questionnaire did not comprise detailed questions on the provision of port
services.
64 "Trade in international maritime services:  how much does policy matter?" by Carsten Fink.  Aaditya
Mattoo and Cristina Neagu.S/CSS/W/106
Page 24
"Principle 14 - Maritime Auxiliary Services"
OECD Member countries consider that there should  be non-discriminatory treatment as regards the
access to and use of maritime auxiliary services, and that the application of fees and charges should be
transparent.
Additionally, where these auxiliary services are commercially provided, there should be a free and fair
competitive environment as regards their provision, subject to providers meeting required safety and other
standards of the country where the services are provided.
This Principle applies to those services which a vessel might use within a port, including while berthed,
and includes (but is not limited to):  Pilotage, towing and tug assistance;  Provisioning;  Discharge of waste and
ballast water;  Navigational aids;  Shore based operations essential to ship operations, including
communications, water and elect rical supplies;  Emergency repair services;  Anchorage and berthing services;
Container handling, storage and depot services;  Maritime agency services;  Maritime freight forwarding
services;  Maritime cargo handling services;  Custom clearance services and Maintenance and repair of vessels".
Turkey is unable to accept those elements of Principles 14 and 15 which relate to the "provision" of
those services.  Greece cannot commit itself to accepting the new Principles 14 and 15 at this stage.
103. As shown in Annex 5, the categories used in this context are nearly the same as those
underlying the GATS Maritime Model Schedule, and the core obligations are similar sometimes more
ambitious.65
(b) European Union
104. In December 1997, the European Commission pr esented its Green Paper on Seaports and
Maritime Infrastructure.66  Its basic approach was reflected later, in February 2001, in a Draft
Directive on market access to port services which aims to liberize these services 67, complementing
jurisprudence of the Court of Justice and competition authorities.68 The Directive, once adopted,
would prohibit limitations on the number of port service providers, except for safety reasons in the
case of technical/nautical services (i.e. pilotage, towage and mooring) and for space or capacityconstraints in the case of other services (including stevedoring, stowage, transhipment, depot and
warehousing services).  Table 4 in Annex 7 juxtaposes the classification contained in the Draft
Directives, with the Maritime Model Schedule (MMS) and the CPC.
105. In harbours exceeding a threshold of 500,000 passengers or 3 million tonnes of traffic, there
should be at least two providers of the services covered.  Authorization procedures should be fair,transparent and non-discriminatory.  The harbour authorities should not participate in the selection
process if they provide themselves commercial services;  and their commercial accounts should be
separated from regulatory activities.  Self-handling of shipowners would be permitted.  Port service
providers would be allowed to use personnel of their choice, subject to relevant national legislation.
Public service obligations related to safety, regularity, continuity, quality and prices could be imposed
                                                     
65 Principle 14 opens the possibility of liberalizing the provision of certain port services and not only of
access to them;  it seems to cover the right of access to/use of maritime auxiliary services and contains a
transparency obligation for fees and charges.
66 COM (1997) 678 (final) 10 December 1997.
67 Communication  from the Commission  to the European  Parliament  and the Council "Reinforcing
Quality Service in Sea Ports, a Key for European Transpor t, Proposal for a Directive of the European Parliament
and of the Council  on Market Access to Port Services ".  COM(2001) 35 (final), 13 February 2001.
68 For the period under review, see Court Decisions C-242/95 GT Link A/s v. De danske Statsbaner,
dated 15 July 1997, on port duties;  C-163/96 criminal pr oceedings  against Silvano Raso and others,  dated
12 February 1998, on port terminal concession;  C-266/96 Corsica ferries SA v. Gruppo Antichi Ormeggiatoridel Porto di Genova Coop, dated 18 June1998 on mooring;  C-22/98 Openbaar Ministerie c/Jean Claude Becu -Annie Verweire, dated 16 September 1999 on dockers;  and a pending case, "les abeilles", on tugging.S/CSS/W/106
Page 25
on them.  Transitional provisions are foreseen existing private monopolies (e.g. in the United
Kingdom). Finally, the Draft Directive addresses measures considered as State Aid which would be
subject to authorization by the Commission.69  The Directive is currently pending before the Council.
(c) National developments
106. Several countries have amended their regulatory frameworks governing port and auxiliary
services during the period under review.  Chile's national port holding company Emporchi wasdismantled in 1998.  Canada corporatized in 1998, and Greece also continued corporatization policies.
107. In October 1997, the Japan Foreign Steamship Association (JFSA), the Japan Harbour
Transportation Association (JHTA), the Japan Shipowners Council (JSPC) and the Ministry of
Transport (MOT) reached agreement ("Four-Party Agreement") to introduce more transparent and
simplified procedures.  Moreover, JFSA, JSPC, and MOT agreed on an alternative system to the
present Prior Consultation System.  In response to the latter, the US Federal Maritime Commission
decided to suspend sanctions it had imposed earlier on the grounds that the Prior ConsultationsSystem create conditions unfavourable to US shipping.
70
H. MULTIMODAL TRANSPORT
108. In 2000, the OECD Council adopted Princi ple 15 of the revised "Common Shipping
Principles", dealing with international multimodal transport.  The complete text reads as follows:
"Principle 15 - International Multimodal Transport"
OECD Member countries consider that internatio nal multimodal transport involving a sea leg is an
integral part of the transport chain, and that there sh ould be non-discriminatory treatment as regards the access
to and use of those services, as well as a free and fair  competitive environment in regard to their provision."
109. The Principle is consistent with Additional Commitments on the ability to rent, hire or charter
trucks, railways carriages or barges contained in the Maritime Model Schedules (access to/use of);
and the possibility of liberalizing the provision of multimodal transport services themselves inaccordance with option 2A of the first column of the Maritime Model Schedule.
110. The OECD Maritime Transport Committee undertook an assessment of the importance of
multimodal transport.
71  It confirms the growing interest of carriers in providing value-added door to
door services to increase potential sources of revenue.  The tri-modal inland terminal (inland
waterway-rail-road) and the logistical center set up in 2000 by P&O/Nedlloyd in Duisburg isconsidered a pertinent example.  Nevertheless the proportion of door-to-door services in total
activities vary greatly from carrier to carrier reaching 50 per cent of the European traffic of
P&O/Nedlloyd, but no more than 30 per cent of  the European traffic of Safmarine/CMBT or
Mitsui/OSK.
111. Multimodal transport is of particular interest to liner shipping;  bulk cargo traffic has
essentially a point-to-point structure.  The very design  of modern containers was meant to facilitate
                                                     
69 Support to public general infrastructure (dikes, breakwaters, locks and other high-water protection
measures etc.) would not a priori be considered as State Aid, whereas support for user-specific infrastructure
(yards, jetties, pipes and cables for utilities) and superstructures (warehouses, workshop, offices, fixed and semi-mobile equipment such as cranes and ramp) would be considered as State Aid.  Support for docks and quaywalls would be assessed on a case by case basis.
70 Details are provided in FMC docket 96 –20, 16 November 1996 at http://www.fmc.gov/dockets/962
D20.htm  and subsequent actions and reports.   See also http://www.mofa.go.jp/announce/announce/archive_
2/97227.tml and http://www.mofa.go.jp/announce/press/1997/10/1028.html
71 Document /DSTI/DOT MTC (2001)3, 11 January 2001.S/CSS/W/106
Page 26
the transfer of freight from land-based modes to ships and back again.  In Europe, 74 per cent of the
containers arriving by sea are sent on via other modes, principally road.  This also implies that
shippers increasingly rely on third-party logistics.  According to a recent survey, this is the case for
64 per cent of the European companies.  UNCTAD estimates growth rates in the next few years of
about 10 to 15 per cent in Europe and 20 to 30 per cent in the United States.72  Strong growth is also
reported for developing countries like India, where third-party logistics has expanded recently at ratesof 30 per cent per year. According to a survey by the Magazine Containerization International in
1999, based on a questionnaire sent to 1000 major shippers Worldwide, contracts with maritime
carriers for intermodal services account for 53 per cent of outgoing and 36 per cent of incoming
shipments.
112. Carriers have used various strategies to develop their multimodal activities:  direct ownership,
creation of nominally independent logistics companies, and strategic alliances with inland multimodal
operators particularly on feeder service routes.  Direct commercial links between logistic providersand shipowners are frequent.  For instance, Sealand/Maersk has created a 50:50 joint-venture with the
Dutch logistics group Ewals Cargo Care to create a logistics platform providing for quality control,
storage and warehousing, inventory management, order preparation, and distribution services.
Existing regulatory frameworks play a major role in this context.  Regulations on inland freight
transport licensing and competition legislation prohibiting inland price fixing by groups of carriersmay in certain instances impair the emerging of full-fledged multimodal services.
113. From an economic perspective, the multimodal transport services reveal significant
similarities with integrated express delivery services.  Such integrated operations help to avoid the
legal and physical fragmentation of the transport chain between different operators and the ensuing
costs, coordination problems and inefficiencies, which can be avoided by integrated operations.  Inresponse to an OECD questionnaire, various carriers have estimated the cost savings of integrated
operations at between 7 and 30 per cent, which appear s highly attractive in view of the thin profit
margins of pure shipping activities.  The savings vary significantly, depending on the nature of land
operations (10 per cent of  total costs for rail, 7.5 per cent for road, 30 per cent for inland waterways,
and 7.5 per cent for local delivery services).
I. C
LASSIFICATION SOCIETIES
114. Classification societies for maritime transport have been dealt with in document S/C/W/62,
paragraphs 66 and 67.  Annex 9 provides recent data on the main classifications societies, their
activities and international networks.
J. SHIPBROKERS
115. Neither CPC nor the Maritime Model Schedule explicitly cover a very traditional maritime
auxiliary service:  shipbroking.73  Shipbrokers are intermediaries with two principal functions;  they
assist owners and charterers in concluding charter contracts for vessels ("cargo for ships") and help
buyers and sellers of vessels, including shipbuilders, to conclude sales or construction contracts.
There are two broad categories, housebrokers, who are directly employed by one or more principals,
(charterers and owners), and competitive brokers who work for an independent broking company or
as sole traders.
116. The shipbroking profession has developed a se lf-regulated market since 1744, the  Baltic
Exchange.  It is located in London and has remained the leading market (50 per cent of the global
                                                     
72UNCTAD Review of Martime Transport, 1998, part 192.
73 See for instance the web-site of their Worldwide association, the Federation of National Ship
Brokers and Agents:  http://www.fonasba.com.  For information on US and EU shipbrokers, respectively, see
http://www.asba.org/ and http://www.fonasba.com/about_ecasba.htm.S/CSS/W/106
Page 27
tanker market, 30 to 40 per cent of the dry bulk ma rket, over 50 per cent of the sales of new and
second hand tonnage).  It disseminates informati on, such as the Baltic Dry Index (BDI), and helps to
solve disputes between members and with non-members.  The Baltic Exchange has developed "freight
derivatives" to allow shipowner or charterers to he dge or take position on future movements of freight
rates.  Most commonly used are Forward Agreements (FFA), whose volume grew six-fold between
1995 and 1999, from £160 million to £1 billion.
117. On the charter side, shipbrokers (recruiting ships for cargo and cargo for ships) concentrate
exclusively on the bulk sector where they perform similar intermediary functions as agents for liner
shipping (cargo for ships).  In-house chartering activities ("housebrokers") are probably covered by
the "bulk, tramp" entry of the Model Schedule and, alternatively, by CPC 72122, 72129, 72130 and
83103.  However, independent intermediary activities for chartering ships or recruiting cargo do not
appear to be clearly covered (Annex 10).
K. CONTAINER LESSORS
118. The economic importance of container leasing services and GATS-related classification
problems are discussed in document S/C/W/62, paragraph 64.  During the period under review, the
industry has continued its growth in spite of the Asian crisis (8.2 per cent in 1998, 7.6 per cent in
1999).   Leased containers account for 45 per cent of the total container fleet.  The sector is extremely
concentrated;  the top 20 lessors own 94 per cent of the fleet.
_______________S/CSS/W/106
Page 28
ANNEX 1
World Seaborne Trade by Country Groups*
CHART 1
(Percentage distribution of tonnage, 1997)
GOODS LOADED GOODS UNLOADED
Developed 
market-
economies 
43.1%Developing 
countries 
51.2%Socialist 
countries 
of Asia 
1.9%Eastern 
Europe
3.7 %
Developed 
market-
economies 
66.6%Developing 
countries 
27.7%Socialist 
countries 
of Asia 
2.7%Eastern 
Europe
3.1 %
Source:  See Table 4.
CHART 2
World seaborne trade by country groups
 (Percentage distribution of tonnage, 1999)
GOODS LOADED GOODS UNLOADED
DMECs
43.8%
Developing 
50.6%Socialist 
Asia
1.9%Eastern 
Europe
3.7 %
DMECs 
66.3%Developing 
27.9%Socialist 
Asia
3.6%Eastern 
Europe
3.2 %
* More detailed information can be found in the UNCTAD "Review of Maritime Transport";
paragraphs 10.
Source:  UNCTAD Secretariat on the basis of da ta supplied by reporting countries and specialized
sources.S/CSS/W/106
Page 29
ANNEX 2
World Tonnage by Types of Vessel and Country Groups, from 1997 to 1999
Country Group Year Total dwtOil
tankersBulk
carriersGeneral
cargo
shipsContainer
shipsOther
ships
Million
dwt% of world
totalPercentage share by vessel type
World total 1997
19981999775.9
788.7799.0100.0
100.0100.035.1
35.635.536.2
34.934.513.4
13.113.08.1
7.88.07.2
8.69.0
Percentage share by group of countries
Developedmarket-economies1997
1998
1999202.5
202.6
203.226.1
25.4
25.430.8
29.8
30.518.8
18.1
17.019.0
19.6
19.237.0
37.1
34.640.2
38.7
38.6
Major open-
registry countries1997
19981999361.0
376.8384.746.5
47.248.150.2
51.250.251.9
53.554.936.1
37.037.736.9
38.639.832.4
35.136.6
Central and
Eastern Europe1997
1998
199924.3
20.7
18.33.1
2.6
2.31.4
1.2
1.02.8
2.2
1.88.4
7.3
6.70.7
0.7
0.75.6
4.8
4.4
Socialist countriesof Asia1997
1998
199926.0
25.9
25.83.4
3.2
3.21.2
1.2
1.34.0
4.2
4.18.0
7.6
7.53.1
2.7
2.62.2
2.1
2.0
Developing
countries1997
19981999149.9
150.8153.619.3
18.919.215.6
15.916.220.6
20.120.126.9
26.726.517.7
17.318.818.8
18.517.5
of which in:
Africa1997
199819996.5
6.36.00.8
0.80.80.8
0.60.60.5
0.50.51.6
1.61.60.3
0.30.31.9
1.81.7
America 1997
1998
199934.4
34.5
33.94.4
4.3
4.23.2
3.1
2.73.9
3.7
3.59.4
9.5
9.53.2
3.8
4.75.0
5.3
4.8
Asia 1997
19981999107.6
108.5112.213.9
13.614.011.6
12.112.915.9
15.615.715.4
15.315.214.1
13.013.611.8
11.210.9
Europe 1997
199819991.2
1.31.20.2
0.20.2-
--0.3
0.30.30.3
0.20.20.1
0.20.2-
--
Oceania 1997
1998
19990.2
0.2
0.2-
-
--
-
--
..
..0.1
0.1
0.1-
..
..0.1
0.1
0.1
Other, unallocated 1997
1998199912.1
11.813.41.6
1.51.70.8
0.70.81.9
1.92.11.5
1.82.44.7
3.73.50.8
0.80.9
Source:  UNCTAD Secretariat on the basis of data supplied by Lloyd's Maritime Information Services
(London).S/CSS/W/106
Page 30
ANNEX 3
Specific Commitments undertaken since November 1998
Member and
accession dateInternational Shippin g Auxiliary services1Port services Other
Albania
(8 September2000)No commitments No commitments Supporting services for
maritime transport:none (except mode4MA: UEHS
2)Rental of vessels with
crew;  maintenance andrepair of vessels:  none(except mode 4,MA:UEHS)
Croatia(30 September
2000)Freight and passenger
transportation:  none
(except cabotage in
mode 1 and in mode 4:UEHS)No commitments towing and pushing
(mode 3) subject to
concession, tendering
and possible numericallimitations due to portcapacity
supporting services for
maritime transport
except navigationalaids and pilotage:(mode 3):  subject toestablishment,concession, tendering
and possible numerical
limitations due to portcapacityRental of vessels with
crew:  none, (except
cabotage in mode 1 and
mode 4: UEHS)
Maintenance and repair
of vessels:  none(except mode 4:
UEHS)
Estonia
(13 November1999)No commitments No commitments No commitments Maintenance and repair
of vessels: none(except mode 4:
UEHS)
Georgia
(14 June 2000)Freight transportation:
mode1: U*,3
modes 2 and 3:  nonemode 4:  UEHSNo commitments pushing and towing:
mode1 : U*, modes2,3:  none,mode 4:  UEHSMaintenance and repair
of vessels;  rental ofvessels with crewmode 1:  U*,modes 2 and 3:  none,mode 4:  UEHS
Jordan
(11 April 2000)freight and passenger
transportation:
modes 1, 2, 3:  noneexcept mode 1 - liner:requirement of localagentmode 4: UHES + 1/5 of
the crew of Jordanian
nationality.Storage and
warehousing,
mode 1:  U*,mode 2 and 3:  nonemode 4:  UEHS
Shipping Agents,
Maritime Freight
Forwarding Services,Maritime Freight,Inspection services,Food Supply  Catering
(Provisioning)
mode 1:  unboundmode 2:  nonemode 3:  accessrestricted to Jordaniannatural or juridical
entities.
mode 4: UEHSMade available on
reasonable and non-
discriminatory terms,except for pilotage andanchorageMaintenance and repair
of vessels; rental of
vessels with crew:modes 1, 2, 3:  nonemode 4:  UEHSS/CSS/W/106
Page 31
Member and
accession dateInternational Shippin g Auxiliary services1Port services Other
Kyrgyz Republic
(20 December
1998)Freight and passenger
transportation
modes 1, 2, 3: none
mode 4: UEHSNo commitments Towing and pushing
services, supporting
services for water
transport.modes 1, 2, 3: nonemode 4: UEHSRental of vessels with
crew, maintenance and
repair of vessels
modes 1, 2, 3:  nonemode 4: UEHS
Latvia(10 February
1999)Freight and passenger
transportation:
modes 1,2,3 : none
mode 4: UEHSNo commitments Towing and pushing
services, supporting
services for water
transport.mode 1, 2, 3:  nonemode 4: UEHSRental of vessels with
crew, maintenance and
repair of vessels
modes 1, 2, 3:  nonemode 4:  UEHS
Lithuania(31 May 2001)No commitments Ship agency services
modes 1, 2:  nonemode 3:  licencing with
language requirementTowing and pushing
services,modes 1, 2: none
mode3:  unbound
mode 4:  UEHSSupporting services forwater transport.modes 1, 2:  nonemode 3:  licencing with
language requirement
mode 4No commitments
Moldova
(27 July 2001)Freight and passenger
transportation modes1,2,3:  nonemode 4:  UEHSNo commitments Towing and pushing
services, supportingservices for watertransport.
modes 1, 2, 3:  none
mode 4: UEHSRental of vessels with
crew, maintenance andrepair of vessels modes1,2,3:  none
mode 4:  UEHS
Oman
(9 November2000)Freight and passenger
transportation:modes 1, 2, 3:  nonemode 4:  UEHSNo commitments No commitments No commitments
1This column reflects only entries in Schedules under the heading "Maritime transport services". A
commitment on cargo handling , following  CPC and MTN.GNS/W/120, would not appear in this column sinceit is listed by W/120 as service auxiliary to all modes of transport (11.H).  Similarly, a commitment on rental ofvessels with crew according to the Maritime Model Schedule  would not appear  in the last column of this Table
since the Model Schedule does not list this activity as a maritime transport service.
2MA:  Market Access;  UEHS : Unbound except as indicated in Horizontal Commitments
3U*: Unbound due to lack of technical feasibility.S/CSS/W/106
Page 32
ANNEX 4
Leading 20 Container Service Operators (January 2000) on the Basis of Number of Ships and Total
Shipboard Capacity (Teus)
Ranking Operator Country/territoryNo. of
ships in
2000TEU
capacity in
2000
12
3
4
56
7
8
9
10
Total 1-10
11
12
13
1415
16
17
18
1920
Total 1-20
World
TotalMaersk Sea-Land
Evergreen Line/Uniglory/
  Lloyd Triestino
P&O/Nedlloyd
Hanjin/DSR-Senator
Mediterranean ShippingCOSCO
NOL/APL
NYK Line
CMA/CGM/ANL
CP Ship Group
Zim
MOL
K Line
Hyundai Merchant MarineOOCL
Yangming Marine
Hapag-Lloyd
UASC
CSAVCho YangDenmark
Taiwan Province of China/
  Italy
UK/Netherlands
Republic of Korea/Germany
SwitzerlandChina
Singapore
Japan
France/Australia
Canada
Israel
Japan
Japan
Republic of KoreaHong Kong China
Taiwan Province of China
Germany
Kuwait
ChileRepublic of Korea244
139
114
83
122114
70
67
61
68
1, 082
59
48
49
3240
36
26
23
2923
1, 447
3, 696599, 601
327, 813
277, 582
258, 025
233, 751201, 263
191, 284
154, 344
138, 956
138, 823
2, 521, 442
124, 425
116, 152
109, 463
106, 137103, 896
95, 712
89, 076
61, 461
54, 83951, 129
3, 433, 732
4, 967, 496
Note:  Including TEU capacity of ro-ro vessels and other types of vessels engaged in container services.
Source:  Kaiun (Shipping),  June 2000.
.S/CSS/W/106
Page 33
ANNEX 5
A Comparison between the "OECD-DNME" U nderstanding and GATS Maritime Provisions
UNDERSTANDING BETWEEN DNMEs AND OECD MEMBER
COUNTRIES ON PRINCIPLES TO BE ADHERED TO IN
INTERNATIONAL MARITIME TRANSPORTCOMPARABLE GATS
PROVISIONS AND
RELEVANT ENTRIES IN
THE MARITIME MODEL
SCHEDULE (MMS)
PROVISIONS
PREAMBLE
Discussions on shipping policy have taken place in Kobe, Japan betweenmembers of, and observers to, the OECD Maritime Transport Committee
and representatives from government and business circles of the Dynamic
non-Member Economies on 27-28 October 1999 (for participating Parties
see the end of this Understanding ).
Participating governments "Parties" agreed upon the principles of open
markets, competitive shipping services, and generally accepted internationalrules and standards and codes on safety and pollution control.
The following items record the Understanding on Principles concerningshipping policy, encouragement of commercial initiatives and co-operation,safety and protection of the environment, consultations and the future of thedialogue. These Principles should be applied amongst the participants andwithout prejudice to any higher standards or commitments for the benefit of
freer sea-borne trade and enhancing maritime safety and the marine
environment( 1).  Parties may apply cabotage principles for their domestic
trade routes.
This Understanding is without prejudice to the General Agreement on Trade
in Services, the 28th June 1996 Ministerial Decision on Maritime Transport
Services and to future negotiations on trade in services at the WTO.
I. SHIPPING POLICY
I.1. Free and non-discri minatory access to in ternational sea-borne
trade
Appropriate policies, based on the principle of free circulation of shippingin international trade in free and fair competition, should be put in place in
order to promote unrestricted and thereby fair participation of sea-going
vessels, of any nationality, in international seaborne trade of commercialcargoes. Parties should refrain from any discriminatory measure and/orpractice which would impinge upon the choice of the flag or upon freecompetition in international seaborne  transportation of commercial cargoes
shipped on carriers of participating Parties.MMS  "International freight
transport (CPC7211) less
cabotage transport", Mode1, liner
shipping, bulk tramp andinternational shipping: "none" inthe Market Access and NationalTreatment columns.
I.2. Shippers’ freedom and needs
Shippers should be free to choose among different shipping services for thetransport of commercial cargoes on all international trade routes. ThisPrinciple needs to be supported by measures facilitating administrative
procedures to expedite cargoes beyond ports or across borders.MMS  "international freight
transport (CPC 7211) lesscabotage transport", mode 2, liner
shipping, bulk tramp and
international shipping: "none" inthe Market Access and NationalTreatment columns.S/CSS/W/106
Page 34
UNDERSTANDING BETWEEN DNMEs AND OECD MEMBER
COUNTRIES ON PRINCIPLES TO BE ADHERED TO IN
INTERNATIONAL MARITIME TRANSPORTCOMPARABLE GATS
PROVISIONS AND
RELEVANT ENTRIES IN
THE MARITIME MODEL
SCHEDULE (MMS)
PROVISIONS
I.3. Promoting competition on a free and fair basis
Appropriate policies should be put in place to safeguard and promote free
and fair competition in international shipping between carriers from allParties participating in internationa l maritime transport operations, while
preventing the abuse of dominant positions, to the benefit of the economicinterests of shipowners, shippers and, ultimately consumers.GATS Article IX
Such policies should also ensure that applicable competition laws,
regulations and other policies contain the required flexibility to adjust to therapidly evolving conditions of international shipping.
I.4. Promotion of compatibility of competition laws and regulations
Co-operation and, where appropriate, consultation among Parties, both inthe application of existing regulatory arrangements and as regards theirfuture development, is agreed upon  as a pragmatic means of promoting
compatibility of competition rules applied to international shipping.
I.5. Non-discrimination as regards  access to and treatment in ports
Parties should accord non-discriminato ry treatment to all national and
foreign suppliers of shipping services with respect to access to ports open tointernational trade, access to and use of port and maritime auxiliaryservices, as well as related fees and charges.MMS, additional commitments
on access to /use of port facilities.
I.6 Commercial presence of foreign  operators: agency operations,
freight forwarding, intermodal haulage associated with an international
sea leg
Parties should allow access on a non-discriminatory basis to all suppliers ofshipping and related services to provide:
• agency operations and related freight services, and MMS maritime agency services
(and possibly several other
auxiliary services) mode 3"none", in the Market Access andNational Treatment column
• intermodal haulage( 2) transport operations associated with an
international sea leg.MMS option 2A (i.e. maritime
international freight transport
including multimodal transport
services) mode 3 "none", in theMarket Access and NationalTreatment column
I.7. Transfer of funds
Parties should provide unrestricted, efficient and timely transfer of fundsrelated to commercial shipping operations.GATS Article XIS/CSS/W/106
Page 35
UNDERSTANDING BETWEEN DNMEs AND OECD MEMBER
COUNTRIES ON PRINCIPLES TO BE ADHERED TO IN
INTERNATIONAL MARITIME TRANSPORTCOMPARABLE GATS
PROVISIONS AND
RELEVANT ENTRIES IN
THE MARITIME MODEL
SCHEDULE (MMS)
PROVISIONS
II. ENCOURAGEMENT OF COMMERCIAL INITIATIVES AND
CO-OPERATION
II.1. Efficient use of resou rces by commercial operators
As a general principle, Parties agree that commercial operators should be
encouraged to identify and eliminat e existing commercial practices, which
lead to the uneconomic allocation of resources, and to develop efficient andcost-effective commercial systems and practices so that maritime transportdoes not impede the flow of trade.
II.2. Co-operation between all those involved in international sea-borne
transport
Co-operation between all those involved in the international sea-borne
transport chain should continue. In this context special emphasis should beput on co-operation in areas such as Electronic Data Interchange.
II.3. Improvement in transparency as regards those involved inmaritime transport operations
Within the limits of their laws and regulations, Parties to this Understanding
confirm their readiness to provide without undue delay information to those
having a legitimate interest in obtaining information on owners, operators orany other person involved in maritime transport operations.GATS Article III
III. PROMOTION OF MARITIME SAFETY AND PROTECTION OF
THE ENVIRONMENT
III.1. Strict compliance with internationally agreed rules and standards
Parties stress their determination that all vessels should comply withinternationally agreed rules and standards concerning the safety of ships,
persons on board and the prevention of pollution of the marine environment.
They agree to ensure compliance with these rules by all vessels within theirjurisdiction. Apart from being a safety and environmental risk, non-compliance might provide unfair advantages to those shipowners whooperate substandard ships.GATS Article XIV
III.2. Support given to actions taken by the International Maritime
Organization and the International Labour Organization
Strong support should be given to actions taken by the InternationalMaritime Organization to improve the safety of ships and persons on boardand the prevention of pollution of the marine environment and to enhancethe implementation of international conventions. Third countries should beurged to adopt a similar approach.GATS Article XXVI
Where appropriate, strong support should also be given to relevant actions
taken by the International Labour Organization.GATS Article XXVI
III.3. Flag and port state control
Parties agree on the fundamental importance of effective flag state control
and the necessity also of effective port state control, as processes formonitoring compliance and enforcement of standards.
Parties also agree on the need for improved regional co-operation among
port state control authorities.S/CSS/W/106
Page 36
UNDERSTANDING BETWEEN DNMEs AND OECD MEMBER
COUNTRIES ON PRINCIPLES TO BE ADHERED TO IN
INTERNATIONAL MARITIME TRANSPORTCOMPARABLE GATS
PROVISIONS AND
RELEVANT ENTRIES IN
THE MARITIME MODEL
SCHEDULE (MMS)
PROVISIONS
III.4. Adequately trained seafarers
Parties agree to exchange information on the efforts undertaken in training
skilled seafarers, and on how to promote seafaring whilst at the same time
fostering and improving the quality of crewing.
IV. CONSULTATIONS
Whilst not inhibiting bilateral discussions, parties to the Understandingrecognise the merits of consulting as regularly as is necessary on problemswhich they encounter, or to exchange views on the implementation of thePrinciples of this Understanding.  These consultations should also involve,
as appropriate, private and commercial interests in the maritime sector and
should, inter alia, cover the following matters:GATS Article XXII
• the means of both maintaining and improving competitive access
to international sea-borne trade on a free and commercial basis;
• developments as regards each other's shipping policies;
• any problems encountered in the application of each other’s or
third country's shipping policies and practices;
• ways and means of achieving mutually acceptable solutions if
conflicts of law or policy in shipping and related fields arise.
• 
1. These Principles are to be adhered to without prejudice to measures
applied by Parties to protect their esse ntial security interests, public order
and health.GATS article XIV and XIV bis
2. Malaysia expresses a reservation on this element of Principle I.6S/CSS/W/106
Page 37
ANNEX 6
Offshore Services
TABLE 1
Possible Classification under CPC Provisional of Offshore Activities and Types of Vessels
Types of vessels Possible CPC Classification
Anchor handling tugboats, tugs 72140* Towing and pushing services
Towing and pushing services on the high seas and on
coastal waters.  These services are generally provided by
vessels which do not themselves carry freight or
passengers.  Included here are towing services of oil rigs,
floating cranes, dredging vessels, buoys, and of hulls and
incomplete vessels, on a fee or contract basis.  Towingservices for distressed seagoing vessels are also included.
Supply vessels 72119*other passenger transportation,
7212* freight transportation
Cable laying vessels, pipelaying bury barges5134* 51340*  [Construction works] For long distance pipelines,
communication and power lines (cables)
Construction work of long distance overland or submarine
pipelines and power and telecommunication transmission
lines (cables).
5135* 51350* [Construction works] For local pipelines and
cables; ancillary works
Construction work of local gas pipelines and water and
sewer mains and local power and communication
transmission lines (cables).   Construction work of
ancillary works such as transmission towers includingantennas
Construction vessels, offshoreworkships88300* Services incidental to mining:
Services rendered on a fee or contract basis at oil and gas
fields, e.g. drilling services, derrick  building , repair and
dismantling services, oil and gas well casings cementing
services.
Floating storage units 7422* 74220* Bulk storage services of liquids or gases
Bulk storage and warehousing services of liquids and
gases.
Shuttle tankers 72122* Transportation of bulk liquids or gases
Transportation by seagoing vessels of bulk liquids or gases
in special tankers.  These vessels may also be refrigerated.S/CSS/W/106
Page 38
Types of vessels Possible CPC Classification
Mobile drilling units 88300* Services incidental to mining:
Services rendered on a fee or contract basis at oil and gas
fields, e.g. drilling services, derrick building, repair and
dismantling services, oil and gas well casings cementingservices.
Mobile production systems Possibly "883 00* Services incidental to mining:
Services rendered on a fee or contract basis at oil and gas
fields, e.g. drilling services, derrick building, repair and
dismantling services, oil and gas well casings cementing
services."  Unless considered as a direct production
activity not covered by the GATS
Remotely operated vehicles(ROV)88300* Services incidental to mining:
Services rendered on a fee or contract basis at oil and gas
fields, e.g. drilling services, derrick building, repair and
dismantling services, oil and gas well casings cementing
services."
Standby and rescue vessels 91260* Police and fire protection services and
91290* Other public order and safety affairs related services.see exclusion under 74540
"Lifeboat services, marine fireboat services and other
marine search and rescue services are classified in subclass
91260 (Police and fire protection services) and 91290
(Other public order and safety affairs related services) ".
Survey vessels 86751* Geological, geophysical and other scientific prospecting
services
Geological, geophysical, geochemical and other scientific
consulting services as they relate to the location of mineral
deposits, oil and gas and groundwater by studying the
properties of the earth and rock formations and structures.
Included here are the services of analysing the results of
subsurface surveys, the study of earth sample and core,
and assistance and advice in developing and extracting
mineral resources.
86752* Subsurface surveying services
Gathering services of information on subsurface earth
formations by different methods, including seismographic,
gravimetric, magnetometric and other subsurfacesurveying methods.S/CSS/W/106
Page 39
Types of vessels Possible CPC Classification
Floating hotels 6411* 64110* Hotel lodging services
Lodging and related services typically provided by hotels.
Related services comprise services normally furnished
with and included in the lodging price and include room
service, desk service, mail service and bellboy service.
or
64199* Other lodging services n.e.c.
Lodging and related services of a type not elsewhere
classified.S/CSS/W/106
Page 40
TABLE 2
Major Countries of Registration and of Beneficial Ownership
of the Offshore Fleet by Type of Vessels
Types of vesselsTotal
number of
vesselsMain countries of registration
(in terms of number of ships)Main countries of
beneficial ownership
(in terms of number of ships)
Drilling ships 54 Panama (18),  Bahamas (10), Russia (4),
Saint Vincent (3),  Liberia (3),  India (3),
US (2),  Azerbaijan (2), Marshall Island (2)US (17),  Norway (6),  Russia (5);
Netherlands (4), United Kingdom (3),
India (3), France (3), Azerbaijan(2)
Offshore
processing ships53 Liberia (10),  Panama (8),  Australia (5),
United Kingdom (4),  Bahamas (4), Norway(4),  Isle of Man (4),  Netherlands Antilles (3)Norway(9),  United kingdom (7)
Brazil(5),  Australia (5),  US (4),Switzerland (4),  Netherlands (2),Malaysia (2),  China (2)
Offshore supplyship1370 US (418),  Panama (86),  China (49),  Belize
(48),  Norway (45),  Vanuatu (43),  Singapore
(37),  Saint Vincent (34),  Honduras (34),
Indonesia(33),  United Arab Emirates (30),United Kingdom (29),  Mexico (29),  Brazil(28),  Bahrain(26),  Russia (25),  Bahamas(23),  Malaysia (20),  Azerbaijan (19),Marshall Island (16),  India (16),  Italy (15),
Egypt (15), Isle of Man (14),  Trinidad (13),
Iran (11),  Chile (10),  Netherlands (10)US (499),  Norway(71),  United Arab
Emirates (66),  Singapore (64),  China
(50),  United Kingdom (46),  Indonesia
(33),  Brazil (31),  Mexico (26),  Russia(25),  Saudi Arabia (21),  Azerbaijan(19),  Malaysia (18),  Greece (18),Bahrain (16),  Netherlands (16),  India(16),  Italy (15),  Egypt (15),  Panama
(13),  Trinidad (12),  Iran (12)
Offshore support
vessels201 US (26),  Bahamas (17),  Panama (16),
United Kingdom (14),  Russia (7),  Qatar (7),Vanuatu (6),  Ukraine (6),  Italy (6),  Norway(5),  Liberia (5),  Belize (4),  Bermuda (4),Singapore (4),  Saudi Arabia (4),
Norway(NIS
1- 4),  Malaysia(4),  India(4)US (41),  United Kingdom (26),
Norway(17),  Russia (7),  Qatar (7),Italy (6),  Ukraine (5),  Singapore (5),Malaysia (5),  Saudi Arabia (4),Netherlands (4),  Japan(4), India (4)
Offshore tug/supply ship1220 US (164),  Panama(95),  Vanuatu (83),  Saint
Vincent (65),  China (62),  India (59),  Belize(47),  Norway (42),  Singapore (41),  Italy(33),  Egypt(33),  Bahamas (30),  MarshallIsland (29),  Denmark (DIS
2-28),  Liberia
(25),  Isle of Man (24),  United Arab Emirates
(23),  United Kingdom (21),  Indonesia (21),
Malaysia (19),  Norway (NIS-17),  Brazil(15),  Canada (14),  Azerbaijan (12),  Mexico(12),  Vietnam(11),  Bahrain (10),  Russia(10),  Netherlands(10)US (341),  United Arab Emirates (87),
Singapore (78),  China (73),  Norway(69),  India (62),  United Kingdom(56),  Egypt (35),  Italy (33),  Denmark(29),  Netherlands (24),  Indonesia(22),  Brazil (19),  Panama (13),
Canada(13),  Australia (12),
Azerbaijan (12),  Vietnam (11),  Spain(11),  France (11),  Greece (11)
Pipe Layer 20 Panama (5),  Bahamas (4),  Vanuatu (2),
Mexico (2),  Liberia (2),  Isle of Man (2)Norway (4),  US (3),  United Kingdom
(3),  Mexico (3),  China (2),
Switzerland (2)
Production testingvessel10 Saudi Arabia (3),  Panama (2) Saudi Arabia (3),  Singapore (2),
United Arab Emirates (2)
Standby-safetyvessel289 United Kingdom (114),  Norway (28),  Saint
Vincent (22),  US (16),  Denmark (DIS-12),Brunei (9),  Malaysia (9),  Panama (8),  Belize(5),  Cayman Islands (5),  Netherlands (5)United Kingdom (88),  Norway (53),
US (24),  Netherlands (20),  Denmark(DIS 12),  Brunei (9),  Malaysia (9),Hong Kong (6),  Australia (5)
Well stimulation
vessel11 Bahamas (3),  US (2),  United Arab Emirates
(2)US (3),  Norway (3),  United Arab
Emirates (2)
Source: Lloyd List data base 2001, compiled by the Secretariat.
1 Norway International  Shipping Register.
2 Danish International Shipping Register.S/CSS/W/106
Page 41
ANNEX 7
Various Port Classifications
TABLE 1
IAPH Classification of Port Assets
IAPH Classification CPC Provi sional Possible Correspondence
(provision only)Maritime Model Schedule
Possible Correspondence
Breakwater
Access channelsDIVISION 51  CONSTRUCTION WORK
Pre-erection work; new construction and repair, alteration,
restoration and maintenance work on residential buildings,
non-residential buildings or civil engineering works.
51330  For waterways, harbours, dams and other
waterworks
Construction work of waterways, harbours and
riverworks, dams, irrigation and otherwaterworks.
1No correspondence
container and general
cargo terminal land
Bulk terminal landCPC 82102 "Renting or leasing services involvingown or leased non-residential property
Renting or leasing services of industrial,
commercial or other non-residential buildings or propertyby owners or leaseholders to others.  Examples includefactories, office buildings, warehouses, theatres and
multiple use buildings which are primarily non-residential,
as well as agricultural, forest and similar properties, andland for mineral or oil exploitation" for leasing .
CPC 74510 "Port and waterway operation services
(excl. cargo handling)
Port operation services such as wharves, docks,
piers, quays and other marine terminal facilities related
services, including passenger terminal services inconnection with marine transportation, on a fee or contract
basis, and operating and maintenance services of boat,
barge and ship canals, of canalized rivers and of otherartificial inland waterways.  Also included here areservices of locks, boat lifts, weirs, sluices and towingservices on canals other than by tugboat, e.g. by tractors orlocomotives on the towpath."
for operationNo correspondence
Container  and general
cargo terminal wharves
Bulk terminals wharvesCPC 51330 for maintenance andCPC 74510 for operationNo correspondence for
maintenancepossibly [9.  Anchorge, berthand berthing services] (accessto /use of) for operationS/CSS/W/106
Page 42
IAPH Classification CPC Provi sional Possible Correspondence
(provision only)Maritime Model Schedule
Possible Correspondence
Handling equipment andcranes at containerterminalsCPC 74110* Container handling services
Cargo handling services provided for freight in
special containers.  Included are services offreight terminal facilities, on a fee or contract
basis, for all modes of transport, including
stevedoring services (i.e. the loading, unloadingand discharging of vessels' containerized freight,at ports).
handling equipment andcranes at general cargo
terminalsCPC 74190 Other cargo handling services
Cargo handling services provided for
non-containerized freight or for passengerbaggage.  Included are services of freightterminal facilities, on a fee or contract basis, forall modes of transport, including stevedoring
services (i.e. the loading, unloading and
discharging of vessels' non-containerized freight,at ports),  and cargo handling services incidentalto freight transport, not elsewhere classified.Also included are baggage handling services atairports, and at bus, rail or highway vehicle
terminals."maritime cargo handling
services: activities exercisedby stevedore companies,including terminal operators,but not including the direct
activities of dockers, when this
workforce is organisedindependently of thestevedoring or terminaloperator companies.  Theactivities covered include the
organisation and supervision
of:
-  the loading/discharging of
cargo to/from a ship;
-  the lashing/unlashing of
cargo;
-  the reception/delivery and
safekeeping of cargoes beforeshipment or after discharge.
1 The terms "breakwater", "access channels" and "wharves" do not appear explicitly in this definition.
However, the construction item CPC5223 which uses the terms "waterways, harbours, dams and other
waterworks" has a subcategory 52232 "harbours, rivers, canal and related facilities".  It is defined as  "Harbour
bottoms and harbour channels, breakwaters, piers, wharfs  and similar structures, and riverworks and canal
constructions for water transport traffic".S/CSS/W/106
Page 43
TABLE 2
IAPH Classification of Harbour Services
IAPH Classification CP C Possible CorrespondencesMaritime Model Schedule
Possible correspondences
Navigational aidsCPC 74530 Navigation aid services: Services provided
by lighthouses, lightships and light vessels, buoys, channelmarkersNavigation aids
(only access to/ use of)
Harbour masterCPC 74510 Port and waterway operation services
(excl. cargo handling)1Port' captain's services(only access to/ use of)
DredgingCPC 72140 Towing and pushing services
…included here are towing services of oil rigs, floatingcranes, dredging vessels,
orCPC 51330  For waterways, harbours, dams and otherwaterworks
Construction work of waterways, harbours and
riverworks, dams, irrigation and other waterworks
2.
PilotageCPC 74520 Pilotage and berthing services3Pilotage
(only access to/ use of)
Stevedoring/cargo handling at
container terminalCPC 74110* Container handling services
Stevedoring/cargo handling at
bulk terminals
Stevedoring/cargo handling atother terminalsCPC 74190 Other cargo handling servicesMaritime cargo handling
services
TowageCPC 74520 Pilotage and berthing services4Towing and tug assistance
(only access to/ use of)
WarehousingCPC 742 storage and warehousing services Storage and warehousing
CPC 742
Ships agencyFreight transport agency services Maritime agency services
Port information servicesCPC 91134  Administrative transport and communications
related services …Also included are support services and
information dissemination services for all the
above-mentioned affairs".CPC 74510 Port and waterway operation services
1 Defined as" Port operation services such as wharves, docks, piers, quays and other marine terminal
facilities related services, including passenger terminal services in connection with marine transportation, on a
fee or contract basis, and operating and maintenance servic es of boat, barge and ship canals, of canalized rivers
and of other artificial inland waterways.  Also included here are services of locks, boat lifts, weirs, sluices and
towing services on canals other than by tugboat, e.g. by tractors or locomotives on the towpath."
2 This correspondence is established via CPCRev.1  which establishes full correspondence between
CPC prov. 51330 and 54230 "General construction service of harbours, waterways dams, irrigation and other
water works.  The latter comprises "Dredging services , rock an silt removal  and other  water associated
construction services".  Rev. 1 also establishes  a link with towing services, but clearly  limits it to the dredgingof (un-motorized and under-motorized) dredging vessels.  This footnote  completes and up to a certain extent
corrects the developments on the classification of dred ging services contained in paragraph 65 of document
S/C/W/62.
3 Defined as "Tugboat services in connection with the docking and undocking of vessels of all types,
and pilotage services, including the services of pilot vessels, whether supplied to conduct a vessel in or out of
harbours or around navigational dangers".
4 See the exclusion contained in 74510 "port and waterways operation services" which stipulates that
"Tugboat-assisted docking and towing services are classified in subclass/74520 (Pilotage and berthing services)
"the item CPC 72140"towing and pushing services" is limited to towing in the high seas and coastal waters.S/CSS/W/106
Page 44
TABLE 3
OECD Classification of Port and Auxiliary Services
OECD ClassificationAccess to /use of
(OECD)Access to /use of
(WTO-MMS)Provision
(OECD)Provision
(WTO-MMS)
Pilotage
yes yesyes, if
commercially
providedno
Towing and tug assistance
yes yesyes, if
commercially
providedno
Provisioning1
yes yesyes, if
commercially
providedno
Discharge of waste and
ballast water2yes yesyes, if
commercially
providedno
Navigational aids
yes yesyes, if
commercially
providedno
Shore based operations
essential to ships
including
communications, waterand electrical suppliesyes yesyes, if
commercially
providedno
Emergency repair services yes yes yes yes
Anchorage and berthing
services yes yesyes, if
commercially
providedno
Container handling3yes no yes yes
Storage and depot
services4 yes no yes yes
Maritime agency services yes no yes yes
Maritime freight
forwarding servicesyes no yes yes
Maritime cargo handling
servicesyes no yes yes
Custom clearance services yes no yes yes
Maintenance and repair
services5 yes no yes yes
1 The Maritime Model Schedule (MMS) category is "provisioning, fuelling and watering"
2 The MMS wording is slightly different, but the content seems identical:  "garbage collecting and
ballast water disposal".
3 The relevant MMS category is "container station and depot".
4 The relevant MMS category is "storage and warehousing".
5 These services do not appear in the MMS, but are classified as maritime transport services in
document MTN.GNS/W120.S/CSS/W/106
Page 45
TABLE 4
EU Draft Directive List of Port Services
EU draft directive cla ssification Possible CPC
correspondencesMaritime Model
Schedule
1 Technical nautical services
1.1 Pilotage 74520
1. Pilotage (access to/use of)
1.2 Towage 74520 2. Towing and the tug assistance
(access to/use of)
1.3 Mooring n.a;  possibly 74510 possibly 9. [anchorage, berth and
berthing services] (access to /useof)
2 Cargo handling
2.1 Stevedoring stowage,
transhipment and other intraterminal transport74110, 7490 maritime cargo handling services
2.2 Storage, depot and 
warehousing742 CPC 742
2.3 Cargo consolidation 74800 n.a.
3 Passengers services (including
embarkation anddisembarkation)possibly 74510 n.a.
4 Other services
4.1 Fire fighting 91260 n.a.
4.2 Water and electricity supply 74590, 88700 3. Provisioning fuelling and
watering (access to/use of)
4.3 Safety services 91260 n.a.
4.4 Bunkerage 61300, 62113, 62271 3. Provisioning fuelling and
watering (access to/use of)
4.5 Cleaning 74590 n.a.
4.6 Pollution control possibly 74590 or 9409 n.a.
n.a. – not availableS/CSS/W/106
Page 46
ANNEX 8
The Top Five Worldwide Operators of Container Terminals (in volume)
Company
(Origin)Volume
1999
(million
TEU)Market
share
(%)Main Port
(% of the
activity)Establish-
ment
(number
of
countries)Turnover/
revenue
1999 (US$
million)Profit in
1999
(US$
million)Profit
margin
(%)
Hutchison Port
(Hong Kong, China)18 9 Hong Kong
(49%)8 1, 555 618139.7
PSA
(Singapore)17.9 9 Singapore
(89%)6 1, 495 649143.4
Maersk Sealand
(Denmark)12.5 6 Algesiras, Spain
(15%)12 6, 000 40026.7
Eurokai/Eurogate
(Germany)6.4 3 Gioia Tauro,
Italy (35%)3 285 2037
P&O Ports
(G.B. & Australia)6.2 3 Southampton,
GB (15%)13 550 10420
1 Operational result.
2 Estimated overall profit of the A.P. Moller Group.
3 After tax.
4 Operating profit.
Source: Drewry Shipping Consultants, "Forbes"
TEU: Twenty Equivalent Units-S/CSS/W/106
Page 47ANNEX 9
Elements on the Main Classification Societies
CompaniesCountry of
originFoundation
yearEmployeesNumber of delegations
at maritime authoritiesFleet covered Network Observations
American Bureau of
Shipping(ABS)USA 1600 99 105 million Gross Tonnage (GT) or
19% of World Tonnage (WT)225 locations in 70
countriesNot for profit
Det Norske Veritas
(DNV)Norway 1864 5500 130 85 million GT or 15% of WT 300 locations in 100
countries
Germanischer LloydAG (GL)Germany 1867 1800 105 33 million GT or 6% of WT 400 locations in 135
countriesNot for profit
Lloyd Register (LR) United
Kingdom1760 4500 direct,
6000 in total135 105 million GT or 19 % of WT 200 locations
Bureau Veritas (BV) France 1828 10000 119 37 million GT or 7 % of  WT 500 offices in 120
countries
Korean Register ofShipping (KR)Korea 1960 35 19 million GT or 3% of WT 52 locations in 17
countries
Registrano Italiano
Navale (RINA)Italy 1861 720 63 17 million GT  or 3% of WT 52 locations
Nippon Kaiji Kyokai
(ClassNK)Japan 1899 950 98 110 million GT or 20% of WT 80 locations Not for profit
Indian Register of
Shipping (IRS)India 1975 150
Croatian Register of
Shipping (CRS)Croatia
China Classification
Society (CCS)China 1956 1990 14 50 locations in 15
countries
Russian Register ofShipping (RS)Russia 1913
Polski Rejestr Statkow
(PRS)Poland 1936 300 25
Note:  Companies listed in this Table are Members of the Intern ational Association of Classification Societies (IACS).  Other s ignificant classification companies
include:  Hellenic Register of Shipping;  Honduras Bureau of Shipping;  Honduras International Naval Surveying and Inspection B ureau;  INCLAMAR;  International Naval
Survey Bureau;  International Register of Shipping;  Isthmus Bureau of Shipping S.A.;  Panama Maritime Documentation Services;  Panama Maritime Surveyors Bureau;
Panama Shipping Register;  Panama Bureau of Shipping;  Panama Register Corporation;  Register Naval Roman;  China Corporation R egister of Shipping;  Bulgarski Koraben
Register;  Turku Lloyd Vafki.  For more information on classifi cation societies and safety records, see:  http://www.uscg.mil/h q/g-m/psc/textonly/class.htm.S/CSS/W/106
Page 48ANNEX 10
Possible Classification of Shipbroking activities CPC Provisional
and the Maritime Model Schedule
Shipbroking
activitiesCPC Provisional Maritime Model Schedule
(MMS)
1. House brokers
1.1 Chartering of ships CPC 72130 Rental services of seagoing vessels with operator
Rental and leasing services of all types of self-propelled, seagoing vessels with
operator, such as passenger vessels (except pleasure boats) tankers, bulk dry
cargo vessels, cargo and freight vessels, tugboats and fishing vessels.
CPC 83103 Leasing or rental services concerning vessels without operator
Renting, hiring or leasing services concerning boats, ships and hovercraft
without operator, primarily designed for the conveyance of passengers and
freight.MMS does not cover rental and leasing (see
S/C/W/62, paragraph 50)
1.2 Recruitment of freight CPC 72122 Transportation of bulk liquids or gases
Transportation by seagoing vessels of bulk liquids or gases in special tankers.These vessels may also be refrigerated.
CPC 72129 Transportation of other freight
Transportation by seagoing vessels of freight not elsewhere classifiedMarket Access column under "bulk and
tramp"
1.3 Purchase and sale of ships CPC 62282 Wholesale trade services of transport equipment other than motor vehicles,
motorcycles and bicycles
Specialized wholesaling services of transport equipment other than motor
vehicles, motorcycles and bicycles, e.g. commercial ships and boats, except for
pleasure, railway and tramway locomotives and rolling stock, aircraft,
spacecraft and aeronautical equipment and supplies and other transport
equipment.  (Goods classified in CPC 493, 495, 496, 499.)(MMS does not cover distribution aspects)-S/CSS/W/106
Page 49Shipbroking
activitiesCPC Provisional Maritime Model Schedule
(MMS)
Cont'd CPC 63299 Specialized retail sales of non-food products n.e.c.
Retailing services of a variety of consumer goods, not elsewhere classified, e.g.
trailers and semi-trailers, electrical machinery and apparatus, and transportequipment, not elsewhere classified.  (Goods classified in CPC 43, 44, 46, 49.)(via ships CPC 493)
2. Competitive brokers
2.1  Chartering of ships Unclear whether intermediaries is who lease, but do own ships, are covered by
CPC 72130 and 83103.MMS does not cover leasing aspects
2.2 Recruitment of freight CPC 74800 Freight transport agency services1
Freight brokerage services;  freight forw arding services (primarily transport
organization or arrangement services on behalf of the shipper or consignee),ship and aircraft space brokerage services, and freight consolidation and
break-bulk services.
CPC 74900 Other supporting and auxiliary transport services
Freight brokerage services;  bill auditing and freight rate information services;
transportation document preparation services; packing and crating andunpacking and de-crating services; freight inspection, weighing and sampling
services; and freight receiving and acceptance services (including local pick-up
and delivery).n.a.
2.3 Purchase and sale of ships CPC 62114 Sales on a fee or contract basis of machinery, industrial equipment and
vehicles other than motor vehicles, bicycles and motorcycles
Wholesaling services by commission agents, commodity brokers, auctioneers
and other wholesalers who trade on behalf of others, of machinery, industrial
equipment and vehicles other than motor vehicles, bicycles and motorcycles.
(Goods classified in CPC 327, 43-49.)2MMS does not cover distribution aspects
1Given that CPC items are supposed to be mutually exclusive, it may come as a surprise that "freight brokerage services" appear under both CPC 74800 and 74900.
CPC Rev. 1 has only one item for freight brokerage (67910) which, however, is put in correspondence with the two provisional it ems.
2Ships fall under CPC 493
__________