Why reflag?

Shipping is a global business in which companies have to compete on a global level against competitors from all over the world. These shipping companies 'shop around' and outsource non-core activities to cheaper countries in order to improve their competitiveness.

In making these competition-improving decisions, many of them have changed their traditional flag – mostly western – for a foreign or open register. And why not, these open registers seem to be cheaper and the times that they where only used by one-man companies and 'cowboys' are in the past. Presently, even the major leading shipping companies operate part of their fleet under an open register.

The hypothesis can be made that for container lines the low-cost culture is dominant, where for tanker operators quality seems to be more important. Does this difference between quality- and low-cost dominance reflect itself into the choice of register?

(Paper presented by Matthijs Koop)

 

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