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| Home > Trade & Investment News >London Remains Leading Global Maritime Centre | ||||||||||||||||||||||||||||||||||||||||||||||||||
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London Remains Leading Global Maritime CentreBy Angela Singleton, London Press Service LONDON is the world's leading centre for the provision of a wide variety of maritime industries to international shipping companies. The industry has expanded steadily over the past 50 years to accommodate growth in global trade and now it employs more than 14,000 people. Offering marine insurance, maritime law, maritime banking, IT, ship classification and shipbroking services, the City of London rivals other maritime centres such as Hong Kong, Singapore, New York and Athens. At the centre of London's thriving maritime industry is the Baltic Exchange, a membership organisation that provides independent daily shipping market information, maintains shipbroking standards and resolves disputes. Dating from 250 years ago, the exchange can trace its origins back to when it was a coffee house, the traditional meeting place of merchants and sea captains in the City of London, the capital's financial quarter. Another influential organisation is Maritime London that was set up in 2000 to promote the common interests of all the activities that make up maritime service industries in the capital and the UK. Many international shipping organisations have chosen to site their headquarters in London including the International Maritime Organisation, the International Chamber of Shipping, the International Maritime Industries Forum, the International Salvage Union and the International Oil Pollution Compensation Funds. Developments that have had a major impact on the UK maritime services industry in recent years have included a rise in freight rates, in response to faster growth in seaborne trade and virtual elimination of oversupply in shipping and the boom in shipbuilding orders, raising the demand for finance. Between 1996 and 2006 seaborne trade rose by 48 per cent, an average increase of four per cent a year. This growth has been particularly rapid in recent years, seven per cent a year in 2003 and 2004 and more than five per cent in 2005 and 2006. Orders for new ships have increased substantially, doubling from 115 million tonnes at the end of 2002 to 322m tonnes at the end of 2006. In ship finance, the loan book of 49 billion US dollars provided by commercial banks in London accounts for 18 per cent of the world book. The world loan book has grown by more than a third from 200bn dollars in 2005 to 275bn in 2007. About a dozen commercial banks operate out of the capital, of which four are UK-owned. Foreign banks operating in London originate from the United States, Germany, the Netherlands, Greece, Scandinavia and Australasia. According to the Chamber of Shipping, the fleet owned by UK-based companies makes a substantial contribution to the UK economy, with an average turnover of almost 11bn pounds in the past two years and a direct contribution to the UK balance of payments of three billion pounds in 2006. The UK registered fleet has risen by 350 per cent. Much of the increase is due to inward investment by international shipping companies that have taken advantage of the favourable operating and financial environments for shipping and maritime business in the UK. Greece is the biggest foreign ship-owner in the UK, having been represented through its exclusive agents in London since the 1920s. With at least 120 such agents employing more than 1,500 people from Greece alone, they represent a very substantial customer base for the UK maritime services sector. The recent Maritime Services report from International Financial Services London (IFSL) highlights London's leading position in the international marine insurance market, with a holding of 23 per cent of all premiums. The capital is the leading centre ahead of Japan, the US and Germany. The vast majority of marine insurance in London is written using an insurance broker as an intermediary between owners and underwriters. Because London is a subscription-based market, most placings are coordinated by the brokers with several underwriters, each accepting a percentage of the overall risk. About 30 firms of insurance brokers place the bulk of marine business, with most awarded to larger brokers such as Aon, Marsh and Willis. According to the IFSL report, the capital's 400 shipbroking firms employ 5,000 staff and match ships and cargoes for 50 per cent of the tanker and 30-40 per cent of the dry bulk chartering business. They are also involved in the sale and purchase of more than half the globe's new and second-hand tonnage, a market worth more than 34bn US dollars annually. Shipbrokers are intermediaries operating in the shipping industry that have two principal functions. First, they assist shipowners and charterers in concluding charter contracts for vessels; second, they help buyers and sellers of vessels, including shipbuilders, in concluding sale-and-purchase and new building contracts. The largest shipbroking firms in London are Clarksons, Simpson Spence & Young, Braemar Seascope, EA Gibson, Galbraiths, and Howe Robinson. Shipbrokers have helped to establish a substantial market share for the capital in the chartering business estimated at 50 per cent of the global tanker and 30-40 per cent of the global dry bulk chartering business. London also ranks as the world's leading sale and purchase market. The UK capital is at the forefront for the provision of legal services to the international maritime community and about 30 law firms practise in this field. English law is used to settle shipping disputes far more widely than the law of any other country. Legal services in the maritime sector are often required for work relating to a range of matters including shipbuilding, finance, commodities, energy, insurance, cargo, collision, salvage and pollution. Ship classification involves the survey of vessels to establish their compliance with rules relating to structural and mechanical soundness. Insurers continue to rely heavily on the major classification societies for the assurance that vessels meet structural and mechanical standards. The oldest society is Lloyd's Register, dating from 1760, and which is the second largest, ship classification society in the world and which accounts for 19 per cent of the global fleet.
Contact: The Baltic Exchange |
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