5 ms·

In shipping the cost is transferred easily down the line; capital investment in new vessels and new technologies is pretty slim because of that. Also the time

In shipping the cost is transferred easily down the line; capital investment in new vessels and new technologies is pretty slim because of that. Also the time spent in dry dock might as well cost you more than what you’ll gain through the service time of the vessel since many of these vessels change hands frequently sometimes even several times a year. Also because how risk is managed in the shipping industry none of these companies is exposed to any actual action, the vessels would almost never be owned by an entity with actual assets and they would essentially be registered to shells holding only debt. This is done to protect shipping companies from damages in case of accidents but it’s also very convenient to avoid any regulation since if they are caught there will be no legal entity to pay the fine.

esyir 7y ago
Hm, really stupid naive question here. What happens if violating ships were basically seized
- dsfyu404ed 7y ago
  Shipping to/from/through the waters of whosoever is doing the seizing is going to get a lot more expensive.
  - dredmorbius 7y ago
    Or, you know, the shipping companies could address that risk by complying with the relevant regulations.
- dogma1138 7y ago
  Well they don’t have a strong basis to seize the vessels, right of passage is tricky and the vessels don’t turn those on while in territorial waters. Open systems have a sufficiently large capacity to store the contaminated water so they essentially only open the loop in international waters where no one can do anything about it. But in general it depends on who does it, for the most part if it’s a western country the country would loose in court since it will he sued by multiple parties with interest in the cargo but no actual liability. If it’s not then it’s either going to be a political waltz or just another act of piracy. The ship and cargo are insured some parties might make more money on losing the ship than if it had completed its transit including quite possibly its operator.
  - gruez 7y ago
    >Open systems have a sufficiently large capacity to store the contaminated water so they essentially only open the loop in international waters where no one can do anything about it. What about enacting a law that says "if you use cheating devices at all, you can't dock in our ports"?
    - dogma1138 7y ago
      >What about enacting a law that says "if you use cheating devices at all, you can't dock in our ports"? When 99.9% of vessels are doing the cheating, the shipping companies would say you would really like your people to go on a diet don’t you?
      - gbrown 7y ago
        So give it a several year phase-in period, and provide mechanisms to remove/permanently disable the systems.
        dogma1138 7y ago
        That’s what has been done in this case which lead to cheating devices to be installed in the first place. It’s very hard to near impossible to do or enforce all it takes is a country just by you that is willing to accept them. People aren’t going to take a huge price hike and countries that are dependent on imports won’t ever enforce such requirements which would leave these vessels out there. At the end of the day unless you are willing to fund a fleet of 1000’s of new vessels and or pay to upgrade existing ones the shipping companies won’t budge and you won’t ever be able to push them into a corner since the economic fallout would be catastrophic for you but not much for them.
        gruez 7y ago
        >It’s very hard to near impossible to do or enforce all it takes is a country just by you that is willing to accept them. You can set up treaties with your neighbors to enforce the same regulations. Also, if your country is sufficiently large enough, it's not really a concern because any savings from not having to follow the regulations will be wiped out by the increased cost in transporting the goods across the border. You could also impose a tariff/charge on goods that transit through a neighboring country for no apparent reason (eg. China -> Mexico -> LA rather than China -> LA). >People aren’t going to take a huge price hike Source on the huge price hike? According to http://www.worldshipping.org/benefits-of-liner-shipping/global-economic-engine http://www.worldshipping.org/benefits-of-liner-shipping/glob..., the shipping industry contributes 183.3B to global GDP, and transports more than 4T worth of goods. Based on that, shipping accounts for approximately 4.5% of the cost of goods. Therefore, a 50% increase in cost because of emissions controls (very generous estimate) would only cause a 2.2% increase in the price of goods. >and countries that are dependent on imports won’t ever enforce such requirements which would leave these vessels out there. If it's announced years in advance, either shipping companies would adapt and get the vessels ready before the regulations take effect, or local manufacturers come online now that they're more competitive. No ships is ever going to be "stuck".
- dredmorbius 7y ago
  "Ship arrest" is a legal concept: https://www.marineinsight.com/maritime-law/ship-arrest-under-maritime-law-reasons-procedure-and-precautions/amp/ https://www.marineinsight.com/maritime-law/ship-arrest-under... And no, I don't know much about it beyond the term and what's at the link above, but failure to abide by regulations is an allowable condition of arrest.
stevespang 7y ago
Then pass laws that immediately confiscate the entire ship upon verified environmental violations and sell them off at auction, the proceeds go to increase the size and scope of the environmental police agencies . . . .
hdfbdtbcdg 7y ago
How does this ownership structure still survive today?
- Spooky23 7y ago
  It's a free market. International treaties evolve slowly, so regulation is non-existent, and shipping is a race to the bottom industry. Ships are flagged and "regulated" in Liberia, Panama or wherever, crews are Filipino or Indonesian, and the officers are from another country (Greece, UK, US, etc). The ownership is always murky and unknown. The only exceptions are some intra-national shipping. US carriers are required if you're shipping from Alaska to California, for example.
flyingfences 7y ago
> In shipping the cost is transferred easily down the line; Would there not be a competitive advantage in being able to offer a lower price than your competitors to these customers "down the line" or is there some facet of the pricing practices that I'm missing?

esyir 7y ago

Hm, really stupid naive question here. What happens if violating ships were basically seized

dsfyu404ed 7y ago
Shipping to/from/through the waters of whosoever is doing the seizing is going to get a lot more expensive.
- dredmorbius 7y ago
  Or, you know, the shipping companies could address that risk by complying with the relevant regulations.
dogma1138 7y ago
Well they don’t have a strong basis to seize the vessels, right of passage is tricky and the vessels don’t turn those on while in territorial waters. Open systems have a sufficiently large capacity to store the contaminated water so they essentially only open the loop in international waters where no one can do anything about it. But in general it depends on who does it, for the most part if it’s a western country the country would loose in court since it will he sued by multiple parties with interest in the cargo but no actual liability. If it’s not then it’s either going to be a political waltz or just another act of piracy. The ship and cargo are insured some parties might make more money on losing the ship than if it had completed its transit including quite possibly its operator.
- gruez 7y ago
  >Open systems have a sufficiently large capacity to store the contaminated water so they essentially only open the loop in international waters where no one can do anything about it. What about enacting a law that says "if you use cheating devices at all, you can't dock in our ports"?
  - dogma1138 7y ago
    >What about enacting a law that says "if you use cheating devices at all, you can't dock in our ports"? When 99.9% of vessels are doing the cheating, the shipping companies would say you would really like your people to go on a diet don’t you?
    - gbrown 7y ago
      So give it a several year phase-in period, and provide mechanisms to remove/permanently disable the systems.
      - dogma1138 7y ago
        That’s what has been done in this case which lead to cheating devices to be installed in the first place. It’s very hard to near impossible to do or enforce all it takes is a country just by you that is willing to accept them. People aren’t going to take a huge price hike and countries that are dependent on imports won’t ever enforce such requirements which would leave these vessels out there. At the end of the day unless you are willing to fund a fleet of 1000’s of new vessels and or pay to upgrade existing ones the shipping companies won’t budge and you won’t ever be able to push them into a corner since the economic fallout would be catastrophic for you but not much for them.
        gruez 7y ago
        >It’s very hard to near impossible to do or enforce all it takes is a country just by you that is willing to accept them. You can set up treaties with your neighbors to enforce the same regulations. Also, if your country is sufficiently large enough, it's not really a concern because any savings from not having to follow the regulations will be wiped out by the increased cost in transporting the goods across the border. You could also impose a tariff/charge on goods that transit through a neighboring country for no apparent reason (eg. China -> Mexico -> LA rather than China -> LA). >People aren’t going to take a huge price hike Source on the huge price hike? According to http://www.worldshipping.org/benefits-of-liner-shipping/global-economic-engine http://www.worldshipping.org/benefits-of-liner-shipping/glob..., the shipping industry contributes 183.3B to global GDP, and transports more than 4T worth of goods. Based on that, shipping accounts for approximately 4.5% of the cost of goods. Therefore, a 50% increase in cost because of emissions controls (very generous estimate) would only cause a 2.2% increase in the price of goods. >and countries that are dependent on imports won’t ever enforce such requirements which would leave these vessels out there. If it's announced years in advance, either shipping companies would adapt and get the vessels ready before the regulations take effect, or local manufacturers come online now that they're more competitive. No ships is ever going to be "stuck".
dredmorbius 7y ago
"Ship arrest" is a legal concept: https://www.marineinsight.com/maritime-law/ship-arrest-under-maritime-law-reasons-procedure-and-precautions/amp/ https://www.marineinsight.com/maritime-law/ship-arrest-under... And no, I don't know much about it beyond the term and what's at the link above, but failure to abide by regulations is an allowable condition of arrest.

stevespang 7y ago

Then pass laws that immediately confiscate the entire ship upon verified environmental violations and sell them off at auction, the proceeds go to increase the size and scope of the environmental police agencies . . . .

hdfbdtbcdg 7y ago

How does this ownership structure still survive today?

Spooky23 7y ago
It's a free market. International treaties evolve slowly, so regulation is non-existent, and shipping is a race to the bottom industry. Ships are flagged and "regulated" in Liberia, Panama or wherever, crews are Filipino or Indonesian, and the officers are from another country (Greece, UK, US, etc). The ownership is always murky and unknown. The only exceptions are some intra-national shipping. US carriers are required if you're shipping from Alaska to California, for example.

flyingfences 7y ago

> In shipping the cost is transferred easily down the line; Would there not be a competitive advantage in being able to offer a lower price than your competitors to these customers "down the line" or is there some facet of the pricing practices that I'm missing?