Top two challenges facing German maritime sector

The German Shipowners’ Association (Verband Deutscher Reeder – VDR) newly released report stated that competitiveness and climate protection are the biggest challenges facing the maritime and shipping sector.

Competitiveness

Not only do the shipping companies compete fiercely with their counterparts based in Singapore, but also with neighboring European countries like Denmark, Belgium or the Netherlands, which partly enjoy more favorable framework conditions as EU member states.

“To be able to survive in the prevailing intense global competition, the shipping industry must be able to operate competitively from the location of Germany on an international scale,” said CEO Ralf Nagel: “We’re not interested in privileges, but simply in equal opportunities.” 

He indicated that German shipping companies were faced with the immense challenge that they need to produce their services profitably with yields roughly at the same level as over 20 years ago. 

Nagel said: “In particular, this is why Germany as a business location cannot afford to impose new taxes on its shipping companies as special burdens that exist nowhere throughout the world, as in the case of insurance tax charged on premium payments for ship insurance policies. This is particularly fatal because parts of the landscape of German shipping companies are developing into a ship management service industry, away from classic ownership.”

He said that not only should the tax relief currently granted in Germany for maritime shipping remain in force without fail in order to maintain the competitiveness of German maritime shipping, further detailed adjustments and extensions should also be provided. 

In particular, Nagel said that the tonnage tax offered by all key shipping locations across the globe should be updated in accordance with the guidelines and directives prevailing in the EU.

“We recommend that the tonnage tax relief already enacted in Denmark, the Netherlands and Norway should also apply to offshore vessels and activities in Germany. German shipping companies are increasingly making efforts to establish offshore wind farms and to transport the necessary material and skilled staff for operation and maintenance of facilities.”

Climate protection

About 90 per cent of all merchandise worldwide is transported by ship. Whereas global ship-borne trade has increased by over one third in the past ten years, the CO2 emissions by maritime shipping have declined by 18 per cent in the same period. 

“This shows that we’re obviously doing a great deal – and we want to do even more,” said President Alfred Hartmann. “When it comes to climate and environmental protection, shipping is on a more ambitious course than any other global industry. Our plan as an industry segment is to achieve the climate targets laid down by the IMO or even to exceed them if possible. However, to do so we will need a technological revolution. The point is that all efficiency measures implemented in ship construction alone will not be sufficient. We will need other fuels.”

Hartmann indicated that it was the responsibility of the International Maritime Organization (IMO) to regulate the reduction of greenhouse gases discharged by international maritime shipping as this task cannot be assigned to the individual states.  It should be done on a global scale in the interest of fair competition as regional solutions can distort competition as well as not having sufficient impact.

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