1. World Economy
In light of overall economic outlook emanating from the sovereign debt crisis, straining
global financial markets, weak economic growth and unacceptably high
unemployment in advanced economies, as well as elevating inflationary pressures on
emerging economies, SERC delegates recognised that the global economy was close
to plunging into a double-dip recession, unless all necessary actions are taken by
policymakers. Under these circumstances, the meeting noted the importance of
senior executives of shipping companies making their individual business decisions
based on evaluation of accurate market and trade data to support smooth flows of
global trade, coupled with considering the recent experience of the industry during the
difficult period since the collapse of Lehman Brothers in 2009.
2. Dry Bulk and Tanker Shipping
1) Dry Bulk
Delegates heard a report on recent upward trends in the Capesize market since the
summer of 2011 mainly in the wake of accelerated charter of vessels due to typhoons
occurring in the Asia region in the summer and recovering demand for iron ore shipped
to China against a backdrop of relatively lower global prices. It was reported that
although stable seaborne growth is expected to continue partly due to firm demands
for urbanisation in the emerging countries, the current recovery was unlikely to be
sustainable in the long-term and the market would be difficult over at least the next few
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PR1NOU 24th SERC (final_rev).doc
years as a direct result of the continued introduction of new vessel capacity and the
sluggish global economy. In the meantime, some positive impact on prospects of the
market was also noted resulting from accelerated scrapping of obsolete vessels and
expected further consolidation in Chinese shipyards.
2) Tanker
It was reported that the overall tanker market still remains sluggish, mainly due to
factors such as overcapacity coupled with slower demolitions and slower than
expected phasing out of single-hull vessels. In addition, other factors are higher prices
for crude oil and gasoline triggered by disruptions in the Middle East that are
undercutting recovery in petroleum demand in advanced nations, reduced number of
vessels used for floating storage as well as negative economic sentiments present in
the market, despite firm demand in emerging countries that have exceeded the level of
the previous year. The delegates noted the view that the market does not look good
for 2012 and beyond. Supply will still outpace demand, hampering market recovery
until 2016. The challenge to the industry participants will be how to respond to the
supply and demand gap.
3. Liner Shipping
1) Overall
Container business is now facing new challenges which are structurally different from
the 2009 downturn, followed by a sharp decline in cargo volumes. The meeting
recognised that liner shipping could be at risk of falling into a prolonged slump, owing
to the current supply-demand trends. Delegates shared a sense of concern that the
market could encounter further deterioration, given that it is estimated that new
capacity of 2 million TEU has been ordered since the middle of 2010.
2) Transpacific trade
As for the transpacific trade, it was reported that US containerised imports had faltered
with the third consecutive monthly drop in year-over-year volume from June 2011 due
to the sluggish US economy suffering a slow improvement in the unemployment rate
and poor performance in the housing market which has depressed consumer
spending. As for volume growth in coming years, it was reported that total volume in
the eastbound trade is forecasted to be down to 2.7% this year and 4% to 5% in 2012
on a year-on-year basis, but others had other perspectives for trade growth. Amid the
difficult time facing the liner industry, shipping companies are urged to make efforts to
provide views to customers to help them recognise the characteristics of the liner
business, especially the close correlation between the quality of liner services and the
scale of investment implemented by the shipping companies, in order to achieve a
sustainable liner business in the long term.
3) Intra-Asia Trade
In connection with the intra-Asia trade, container traffic in the trade remained relatively
brisk, with a steady growth of 5.6% to approximately 9.23 million TEU for the first eight
months in comparison with the same period in 2010. The delegates shared some
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PR1NOU 24th SERC (final_rev).doc
concerns over supply and demand trends, as well as steadily escalating costs and the
impact of port congestion. The delegates also noted that the market would continue to
be relatively firm owing to increased trade liberalisation in the Asian region and strong
demand in emerging countries. With regard to the flood in Thailand, the delegates
expressed their expectation for the earliest possible normalisation of economic
activities from current disruptions.
4. Antitrust Immunity
Reports were made on recent developments on the antitrust immunity systems for
ocean carrier agreements around the world. The delegates welcomed recent
decisions by the Singapore and Japanese governments that their antitrust immunity
systems should be maintained. It was also noted positively that APEC formally
adopted a set of guidelines related to liner shipping in June 2011, which recommends
APEC member economies continue to exempt non-ratemaking agreements between
ocean carriers from their respective competition laws. The delegates reaffirmed the
ASF’s long-standing position that the antitrust immunity system for all liner agreements
is indispensable for the healthy development of the shipping industry as well as the
whole trading industry.
5. Other Issues
1) A report was made on recent developments on Greenhouse Gas (GHG) emissions
and the delegates expressed concern about the possible risk of the entire shipping
market being covered by an emission trade scheme introduced by the EU. The
members expressed a concern about the risk that the shipping industry will become a
major source of funding for non-shipping sectors, initiated by the High-level Advisory
Group on Climate Change Financing (AGF). The delegates fully agreed that realistic
and effective measures to reduce GHG emissions should be dealt with in the IMO.
2) Reports were made regarding the accelerated increase in piracy attacks off the
Coast of Somalia and in the Indian Ocean, and delegates expressed grave concern
about this situation. It was recognised that all possible countermeasures should be
taken by governments and international organisations in order to ensure the safe
navigation of vessels transiting high risk area.
* * *
The ASF Shipping Economics Review Committee (SERC) is a forum for senior
executives of Asian shipping lines to review macroeconomic trade information and
developments, as they relate to shipping and trade. The objective of the SERC is to
improve the quality of executive decision-making by the review of available
macroeconomic data and the sharing of perspectives on major trade and shipping
policy issues.
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ASIAN SHIPOWNERS FORUM SEAFARERS COMMITTEE
c/o Hong Kong Shipowners Association 12th Floor, Queen’s Centre, 58 Queen’s Road, East, Wanchai, Hong Kong Tel: (852) 25200206 Fax: (852) 25298246 E-mail: hksoa@hksoa.org.hk
Press Release
(Final)
Fatigue of Seafarers has, for some time, been an important agenda item for the ASF Seafarers Committee. In this respect, the Committee urges delegate Governments attending MSC 88 to approve the proposed resolution on the Principles of Safe Manning with a view to submission to the 27th meeting of the IMO Assembly for adoption, and to adopt the related revision to SOLAS Chapter V, Regulation 14. In the meantime, the Committee urges Asian governments to adopt the revised ‘Guidelines for the Application of Principles of Safe Manning’ at an early stage.
The shortage of seafarers is an increasing concern, particularly in consequence of the massive order book of newbuilding ships that is scheduled to be delivered in the near future. In response, many of the member Associations of the ASF Seafarers Committee have been taking urgent action to recruit, train and retain seafarers. The Committee, however, recognised that it takes time to train seafarers and expressed concern about the consequences of too rapid promotion of seafarers through the ranks, and urges shipowners and managers to consider implementing a stringent process of post-qualification seatime and proper appraisal before promotion.
The Committee continued to express its strong concern at the continuing trend of piracy attacks on merchant ships and the apparent inability of the world’s navies to protect ships passing through the Gulf of Aden and the Western Indian Ocean. There were also rising concerns about the increased number of attacks in the South China Sea. The meeting discussed, in particular, the traumatic experience of seafarers especially those on ships that had been hijacked by pirates in the Gulf of Aden and Indian Ocean. The situation has become a serious crisis, one that deeply affects the mental health of the seafarers and their families and the carriage of world trade. While the ASF is grateful for the protection of the naval forces deployed in and around the Gulf, the United Nations and the IMO must exercise greater efforts
16th interim meeting of the ASF Seafarers Committee (Qingdao, 21-22 October 2010)
to protect ships and their crews when transiting pirate infested and treacherous waters.
It is likely that the Maritime Labour Convention, 2006, will achieve the necessary ratification to come into force in late 2011 or early 2012. It is of concern that some 40,000 ships will need to be certified within the next year, or two if the relevant ILO resolution is adopted by port and flag States. The Committee urges all Governments that have ratified, or are about to ratify, the Convention to ensure as a matter of urgency that national laws and regulations are in place so that recognised organisations can be authorized, if necessary, and Part I of the Declaration of Maritime Labour Compliance can be issued. Early ‘voluntary certification’ of ships flying the flag of ratifying States will greatly assist the certification process.
The Committee expressed serious concern at a proposal by the International Transport Workers’ Federation (ITF) to unilaterally attempt to determine crew costs of national flag vessels, which would violate national policies. The determination of seafarer wages is a matter of negotiation between the shipowner and seafarer. The Committee reiterates its position that the employment conditions of seafarers should be consistent with the current market, economic and living situation of each country/region where the seafarers are domiciled.
The Asian Shipowners’ Forum would like to use this opportunity, in the IMO’s Year of the Seafarer, to thank the seafarers who serve on their ships. Despite increasing unfair treatment and court-sanctioned violations of their human rights, seafarers continue, as true professionals, to serve the lifeblood of international trade.
Editor’s Note
The ASF Seafarers Committee held its 16th interim meeting in Qingdao, China on Friday, 22nd October
2010. The meeting was hosted by the China Shipowners Association (CSA) and was chaired by Mr. Li Shanmin (CSA), Chairman of the ASF Seafarers Committee. Delegates from ASF member associations of China (CSA), Hong Kong (HKSOA), Japan (JSA), Korea (KSA), Chinese Taipei (NACS) and the Federation of ASEAN Shipowners’ Associations (FASA), as represented by the shipowner associations of the Philippines and Singapore attended the meeting, together with the Secretary-General of the ASF.
The Asian Shipowners Forum is a voluntary organization of the shipowner associations of Australia,
16th interim meeting of the ASF Seafarers Committee (Qingdao, 21-22 October 2010)
China, Chinese Taipei, Hong Kong, India, Japan, Korea, and the Federation of ASEAN Shipowner Associations, comprising the Shipowner Associations of the ASEAN countries. The aims of the ASF are to promote the interests of the Asian shipowning industries. Between annual ASF meetings, ongoing work is carried out by five Standing Committees; the Shipping Economics Review Committee, the Seafarers Committee, the Ship Recycling Committee, the Safe Navigation and Environment Committee, and the Ship Insurance and Liability Committee. The main objectives of the Seafarers Committee are to ensure and maintain common standards of training, to promote the stability of employment, the acceptance and well-being of Asian seafarers, and to monitor, consider and comment upon any new international maritime legislation and convention on manning and training. It has been estimated that ASF owners and managers control and operate around 50% of the world’s cargo carrying fleet. For more information about this press

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“The current situation, where a handful of pirates in open skiffs can hold the
world’s economy hostage, is completely unacceptable – as responsible owners
and managers, we must take all necessary steps to ensure the safety and
wellbeing of our seafarers!” said Mr. S. S. Teo, SNEC Chairman. “Not only are
seafarers being tortured and murdered – civilians and children are being targeted
as well. The situation is increasingly untenable.”
It was noted that pirates had attacked 445 ships, hijacked 53 of them and taken
1181 seafarers hostage worldwide in 2010. Today, about 700 seafarers remain
hostages in deplorable conditions off Somalia.
2 | P a g e
The Committee expressed very serious concern at the threat posed by pirates to
international shipping, particularly in the Gulf of Aden, the Indian Ocean and in
the waters off Somalia.
The Committee demands that all governments must act decisively and
expeditiously to eradicate piracy and attacks on ships. Whilst appreciating the
assistance and protection provided by the naval forces stationed in the Gulf of
Aden presently, the Committee does not consider it sustainable in the longer
term. The Committee is of the unanimous view that the United Nations and the
International Maritime Organisation (IMO) must exercise strong political will to
bring the situation under control.
The Meeting strongly supports the call by international shipping organisations
worldwide to neutralise the threat of the captured, hostage-crewed mother ships
that are allowing pirates to roam the Indian Ocean unimpeded. The Committee
acknowledges that in addition to complying fully with all the measures put
forward in the latest version of Best Management Practices to deter piracy in the
Gulf of Aden and off the Coast of Somalia, which has been developed by the
industry, the Committee notes and appreciates that individual ASF Members may
adopt additional safety measures such as the use of armed guards to protect the
lives and well-being of their seafarers.
Whilst the Committee further acknowledged that the use of private armed guards
should be a measure of last resort, the Committee nonetheless welcomes the
proposal by Singapore, with support from the Philippines, ICS and BIMCO,
calling on the IMO to consider the development of non-mandatory guidance to
assist ship owners and operators in employing private armed security service
providers. Furthermore, the Committee supports the submission to IMO from the
Bahamas and the Marshall Islands calling for the accreditation of independent
maritime security providers.
3 | P a g e
In closing, the Committee stressed that whilst ship owners and managers should
do their utmost to protect their seafarers, ultimate responsibility for ensuring
safety of navigation on the high seas should rest with governments.
“This is the most pressing issue for the industry at this time” said Mr. S. S. Teo.
*****************
Hosted by the Singapore Shipping Association (SSA), the 20th Interim Meeting of
the SNEC was attended by representatives of shipowners’ associations from
Hong Kong, India, Chinese Taipei and the Federation of ASEAN Shipowners’
Associations (FASA) as represented by the shipowners’ associations of
Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam.
Mr. S.S. Teo, President of SSA chaired the SNEC meeting on behalf of FASA.
During the meeting, the Committee also considered and discussed current
issues of concern relating to the safe navigation of ships and the protection of
the marine environment.
For any further questions, please contact:
Mr. Daniel Tan,
Secretary
ASF Safe Navigation & Environment Committee
Tel: (65) 62225238
Email: fasa@pacific.net.sg
Editor’s note:
The Asian Shipowners’ Forum is a voluntary organization of the shipowner associations of Australia, China, Chinese Taipei,
Hong Kong, India, Japan, Korea and the Federation of ASEAN Shipowners’ Associations comprising shipping associations of
ASEAN countries. The aims of the ASF are to promote the interests of the Asian shipowning industries. Between annual ASF
meetings, the ongoing work is carried out by the five Standing Committees; the Shipping Economics Review Committee, the
Seafarers Committee, the Ship Recycling Committee, the Safe Navigation and Environment Committee, and the Ship Insurance
and Liability Committee. It has been estimated that ASF owners and managers control and operate nearly 50% of the world’s
cargo carrying fleet.

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Attending the meeting were the Secretary-General of the ASF and delegates representing the
shipowner associations of China, Chinese Taipei, Hong Kong, Japan, and the Federation of
ASEAN Shipowners’ Associations (FASA), as represented by delegates from the shipowner
associations of Indonesia, Malaysia, and Singapore.
The meeting was preceded by a half-day seminar on The Rotterdam Rules, attended by the
delegates to the meeting as well as by members of the Hong Kong Shipowners Association, the
Hong Kong Maritime Law Association and the Hong Kong Shippers Council.
The Committee discussed the Rotterdam Rules, in particular the several areas of concern that
have been expressed by shipowners and shippers. While the Committee was of the opinion that
widespread ratification of the Rules would provide global consistency, which is desirable, it
acknowledged that there remain some aspects of the Rules that shipowners continue to feel
uncomfortable with. Members agreed to continue to further study the Rules with their
governments.
The Regulation of the People’s Republic of China on the Prevention and Control of Marine
Pollution from ships has been causing concern amongst the international maritime community,
for the reason that, although the Regulation came into force on 1st March 2010, no implementing
code or regulations have yet been developed. The Committee noted that some ASF members
had been in touch with the authorities in the PRC, and had been assured that until the
implementing codes had been published, full enforcement of the Regulation would be postponed.
The Committee expressed its deep concern over the wide scope of the proposed United States
sanctions against the exportation of refined petroleum products to Iran. The potential
regulations would seem to indicate that all domestic and foreign entities that might be involved
in shipping such cargoes to Iran, or even insuring or reinsuring the cargo or ships, could be
subject to the sanctions. While the sanctions would be through domestic legislation, the effect
of the sanctions would have international effect. The Committee is of the strong opinion that
legislation that would seek to affect the international community should only be promulgated
through the United Nations, and encourages all Governments to express their concern at the
proposed unilateral action by the United States.
The Committee once again expressed its deep concern at the treatment of seafarers who are
unfortunately involved in maritime accidents. While recognising that local legal procedures
must be followed, the Committee is concerned that seafarers who are involved in accidents are
being treated as criminals as a response to and to satisfy public concern about the effects of the
incident, even when it is clear that there has been no recklessness, criminal intent or obvious
fault involved. There would seem to be many incidents where the only fault of the seafarers
would appear to be in the wrong place at the wrong time. The Committee urges all
Governments, particularly those in the developed world, to reconsider the harm they are doing
both to the recruitment of future seafarers as well as to the reputation of their legal systems by
politicising such incidents and treating seafarers with little regard for their human rights and
being assumed guilty until proven innocent.
The next meeting of the Committee will be held in Hong Kong on 25th May 2010, just before
the 19th annual meeting of the Asian Shipowners Forum.
For more information, please contact the Secretary of the Committee, Arthur Bowring, at the
contact address shown in the header.
Editor’s note:
The Asian Shipowners Forum consists of 8 Shipowner Associations in the Asian region, being
those from Australia, China, Chinese Taipei, Hong Kong, India, Japan, Korea and the
Federation of ASEAN Shipowners’ Associations (FASA), which comprises the Shipowner
Associations of Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. The
Secretariat of the ASF is located in Singapore. The aims of the ASF are to promote the interests
of Asian shipowners and operators. Between annual ASF meetings, ongoing work is carried out
by five “S” Committees; the Shipping Economics Review Committee, the Seafarers Committee,
the Ship Recycling Committee, the Safe Navigation and Environment Committee, and the Ship
Insurance and Liability Committee. It has been estimated that ASF Owners and Managers
control and operate around 50% of the world’s cargo carrying fleet.

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