THE INTERNATIONAL FRAMEWORK OF MARITIME ECONOMICS
POLITICAL INTERNATIONAL
It is stated that one of the x -tics of shipping is that it is an international industry which is influenced by
various factors i.e. political economic, trade cycles etc. the economics of running a merchants ships
depends on crewing costs, maintenance standards and taxation level all of which depends on the laws
governing ship registration.
These laws are highly political in nature and basically in the form of shipping policies, regulations and
Acts e.g. port states control carrier Act in USA which deprives the free market approach in the areas of
USA and requires that the master has to give 14 days notice and handover the crew list to USA.
It is precisely the inbalance in the structure of the world economy which has led the less developed
countries for nearly 4 decades now to be pressing persistently for new international economic order
(NIEO) which was meant to be more just and equable to the entire international community.
The debt problem couple with the collapse of commodity prices has had a detrimental effect on the less
developed countries, under these circumstances and with full responsibilities of sovereignty the most
urgent and important action falling newly independent states is the conception of the sound economic
policies with independence of nation. The economic policies of any country involves its trading
policies ,policies looked at the market situation such as chattering new and second hand ships which are
very important.
Most less developed countries require some kind of ownership but they should not be over ambitious
Protective measures are the ideal policies needed by the less developed countries and the most
urgent requirements is that the less development countries to have their own tonnage(ships) where
they can be able to control their own service, determine the type of ships, frequencies of call in port
with trained manpower. Kenya for example has enacted the merchants shipping regulation Act (1989)
based on UNCTAD liner code of conduct. These regulations are protectionism measures deemed to
help Kenya promotes its maritime industry particularly with the establishment of Kenya National
shipping lines.
Liner code of conduct
Shipping has been vital for the prosperity of mankind and for the quality among the nation and people.
Therefore shipping is a factor which can’t be ignored in the international relation. And liner
conferences have to be considered in that context.
Although liner conferences are commercial bodies and should operate in accordance with commercial
Criteria, liner conferences to and from developed countries, have a long historical background. Almost all
,countries where before the second world war politically dependant. A major portion of their trade was
linked with sovereign metro-politan power that is their exports were mainly raw materials, some of
them in bulk and hardly any export of manufactured/processed general cargo.
Since the end of the World War 2, there has been a change in this entire contest. The commodity
structure of both imports and exports of developing countries has changed, the trade of developing
countries is now multi-directional and the organized liner services are now multi-national. The forms of
trade have been progressively advanced to the developing nations. In this changed contest, the
availability of regular and frequent liner services at a reasonable cost has assumed crucial importance
as freight rates has been frequently increased and the condition of carriage were made more
burdensome as a result of monopolistic position of liner conferences.
The development of economy of a foreign trade countries had even gravely geopodised and the
growth of their national shipping industry repeatedly frustrated , therefore it becomes the legitimate
desire of the developing countries to oppose the international shipping monopoly in order to protect
their rights and interest and to develop their economy. Hence the principle that all countries whether
big/small were equal should be applied in international shipping relations.
THE OBJECTIVES OF THE UNITED NATIONS LINER CODE OF CONDUCT
1. To increase the developing countries share of liner tonnage to an equitable level
2. To increase the developing countries share on the monopoly profits generated where they
exist from rich to poor countries.
3. To improve the developed countries balance of payment by substituting domestic productions
of shipping services for imports
On drafting the code two fundamentals issues had been recognized by all that is
a) That the liner conference system was outmoded therefore needed reforming and restructuring
in order to reflect present realities and aspirations.
b) For various reasons the developing countries had special problems in shipping for which
the international community was determined to find solutions.
Universally/globally accepted code was of economic benefit to the developing countries due to the dual
character of shipping i.e. as an economic activity and provider of services. As an industry shipping
constitutes an important economic sector for many countries and is what all wish to see flourish. Both
traders and carriers interests are best reserved when relation between ship owners and shippers are
governed by fair trading rules since they had not always been governed especially as regards to the
interest of some developing countries thus a code of conduct was necessary.
, The code of conduct for liner conference is an important instrument through which developing countries
sort to find remedy to their problems in the field of liner shipping. It proposes to create a balanced and
equitable system which could be based on concesors and application of international x-ter will enlighten
self interest of catalyzed liner shipping, and sorts a more balanced order which safeguards the legitimate
interest of their liner shipping industry.
The principle of cargo sharing is important and if it was not accepted then there would have been no
scope for rapid development of their liner marines. The code of conduct is one of the main means of
promoting development of the merchant marine in the developing countries. Another relevant
question refers to the long term development of international division of labor in shipping i.e. Who
will be the leading ocean-liner?
The international division shall not be determined by the comparative costs but by political decisions
thus making shipping protectionism an accepted fact. The following is a quotation of the Kenya
merchant shipping act in relation to the code of conduct for liner conference i.e. regulation (1989)
section 4 sub- section 2 states,” the Kenya National Shipping line limited as Kenyans shipping line shall
share on equal basis at least 80% of Kenyans international sea-born trade with National shipping line
of foreign trade partners “
According to the code provision of cargo sharing the fleets/ships of trading partners shall each carry an
equal proportion of the bilateral trade hence proposes to divide the 80% of goods shipped from a
conference harbor equally between the national shipping line of exporting and importing countries.
And to allow a third country shipping line if any to compete for the remainder i.e20%. The provision is
commonly referred to as 40:40:20 formula as per article 2 :4(A) and article 2: 4(B) of the code of
conduct of liner conferences.
Article 2: 4(A) States
“The groups of national shipping lines of each of two countries in the foreign trade between which
is carried by the conference shall have equal rights to participate in the freight and volume of traffic
generated by their mutual foreign trade and carried by the conference. “
Article 2: 4(B) states
“Third country shipping lines if any shall have the right to acquire a significant part in the traffic i.e.
20% in the freight and the volume of traffic generated by that trade. “
POLITICAL INTERNATIONAL
It is stated that one of the x -tics of shipping is that it is an international industry which is influenced by
various factors i.e. political economic, trade cycles etc. the economics of running a merchants ships
depends on crewing costs, maintenance standards and taxation level all of which depends on the laws
governing ship registration.
These laws are highly political in nature and basically in the form of shipping policies, regulations and
Acts e.g. port states control carrier Act in USA which deprives the free market approach in the areas of
USA and requires that the master has to give 14 days notice and handover the crew list to USA.
It is precisely the inbalance in the structure of the world economy which has led the less developed
countries for nearly 4 decades now to be pressing persistently for new international economic order
(NIEO) which was meant to be more just and equable to the entire international community.
The debt problem couple with the collapse of commodity prices has had a detrimental effect on the less
developed countries, under these circumstances and with full responsibilities of sovereignty the most
urgent and important action falling newly independent states is the conception of the sound economic
policies with independence of nation. The economic policies of any country involves its trading
policies ,policies looked at the market situation such as chattering new and second hand ships which are
very important.
Most less developed countries require some kind of ownership but they should not be over ambitious
Protective measures are the ideal policies needed by the less developed countries and the most
urgent requirements is that the less development countries to have their own tonnage(ships) where
they can be able to control their own service, determine the type of ships, frequencies of call in port
with trained manpower. Kenya for example has enacted the merchants shipping regulation Act (1989)
based on UNCTAD liner code of conduct. These regulations are protectionism measures deemed to
help Kenya promotes its maritime industry particularly with the establishment of Kenya National
shipping lines.
Liner code of conduct
Shipping has been vital for the prosperity of mankind and for the quality among the nation and people.
Therefore shipping is a factor which can’t be ignored in the international relation. And liner
conferences have to be considered in that context.
Although liner conferences are commercial bodies and should operate in accordance with commercial
Criteria, liner conferences to and from developed countries, have a long historical background. Almost all
,countries where before the second world war politically dependant. A major portion of their trade was
linked with sovereign metro-politan power that is their exports were mainly raw materials, some of
them in bulk and hardly any export of manufactured/processed general cargo.
Since the end of the World War 2, there has been a change in this entire contest. The commodity
structure of both imports and exports of developing countries has changed, the trade of developing
countries is now multi-directional and the organized liner services are now multi-national. The forms of
trade have been progressively advanced to the developing nations. In this changed contest, the
availability of regular and frequent liner services at a reasonable cost has assumed crucial importance
as freight rates has been frequently increased and the condition of carriage were made more
burdensome as a result of monopolistic position of liner conferences.
The development of economy of a foreign trade countries had even gravely geopodised and the
growth of their national shipping industry repeatedly frustrated , therefore it becomes the legitimate
desire of the developing countries to oppose the international shipping monopoly in order to protect
their rights and interest and to develop their economy. Hence the principle that all countries whether
big/small were equal should be applied in international shipping relations.
THE OBJECTIVES OF THE UNITED NATIONS LINER CODE OF CONDUCT
1. To increase the developing countries share of liner tonnage to an equitable level
2. To increase the developing countries share on the monopoly profits generated where they
exist from rich to poor countries.
3. To improve the developed countries balance of payment by substituting domestic productions
of shipping services for imports
On drafting the code two fundamentals issues had been recognized by all that is
a) That the liner conference system was outmoded therefore needed reforming and restructuring
in order to reflect present realities and aspirations.
b) For various reasons the developing countries had special problems in shipping for which
the international community was determined to find solutions.
Universally/globally accepted code was of economic benefit to the developing countries due to the dual
character of shipping i.e. as an economic activity and provider of services. As an industry shipping
constitutes an important economic sector for many countries and is what all wish to see flourish. Both
traders and carriers interests are best reserved when relation between ship owners and shippers are
governed by fair trading rules since they had not always been governed especially as regards to the
interest of some developing countries thus a code of conduct was necessary.
, The code of conduct for liner conference is an important instrument through which developing countries
sort to find remedy to their problems in the field of liner shipping. It proposes to create a balanced and
equitable system which could be based on concesors and application of international x-ter will enlighten
self interest of catalyzed liner shipping, and sorts a more balanced order which safeguards the legitimate
interest of their liner shipping industry.
The principle of cargo sharing is important and if it was not accepted then there would have been no
scope for rapid development of their liner marines. The code of conduct is one of the main means of
promoting development of the merchant marine in the developing countries. Another relevant
question refers to the long term development of international division of labor in shipping i.e. Who
will be the leading ocean-liner?
The international division shall not be determined by the comparative costs but by political decisions
thus making shipping protectionism an accepted fact. The following is a quotation of the Kenya
merchant shipping act in relation to the code of conduct for liner conference i.e. regulation (1989)
section 4 sub- section 2 states,” the Kenya National Shipping line limited as Kenyans shipping line shall
share on equal basis at least 80% of Kenyans international sea-born trade with National shipping line
of foreign trade partners “
According to the code provision of cargo sharing the fleets/ships of trading partners shall each carry an
equal proportion of the bilateral trade hence proposes to divide the 80% of goods shipped from a
conference harbor equally between the national shipping line of exporting and importing countries.
And to allow a third country shipping line if any to compete for the remainder i.e20%. The provision is
commonly referred to as 40:40:20 formula as per article 2 :4(A) and article 2: 4(B) of the code of
conduct of liner conferences.
Article 2: 4(A) States
“The groups of national shipping lines of each of two countries in the foreign trade between which
is carried by the conference shall have equal rights to participate in the freight and volume of traffic
generated by their mutual foreign trade and carried by the conference. “
Article 2: 4(B) states
“Third country shipping lines if any shall have the right to acquire a significant part in the traffic i.e.
20% in the freight and the volume of traffic generated by that trade. “
