Interview with Dick Welsh, Director of the Isle of Man Ship Registry
By: John Gregory
18 April 2011
We are known as one of the best flags in the world – why is it that the Isle of Man has got such a good reputation when it comes to shipping?
It is all about quality of service and also the quality of the kind of clients we deal with. We screen very carefully, we are highly regulatory but it is in a very customer focused way. That’s what the industry appreciates. Everything the Isle of Man does it wants to be a high quality jurisdiction but it also wants to be open for business and the ship registry is no different. That’s what we are known for. The big blue chip clients that we have want to associate with us but they want to ensure we are also screening other owners to make sure they are all of the same quality. When you add that all together, together with the regulatory framework on the Isle of Man and the kind of jurisdiction the Isle of Man is, the whole package adds up into this high quality registry.
How many ships do we have registered at the moment?
In terms of merchant ships and commercial yachts we have 515 of which 96 are commercial yachts. Totally on the register - including pleasure yachts, small ships, fishing vessels - we have got just over 1,000 – 1,054. The tonnage in terms of merchant shipping – the way different registers are measured is to do with gross registered tonnage – we are at 12.4 million registered tonnes. We have seen a massive increase over the last couple of years as we have had larger ships coming in from the Far East.
Our tonnage growth has been one of the fastest growth rates in the world, certainly the fastest growth rate in Europe over 2010 and the fourth fastest in the world. We are about 17 in the world stats against 130 registered, in terms of size. It is the quality of that tonnage and the type of owners we are involved with and the fact the industry bodies, the industry users, voted us as one of the top registers in the world. There were five registers at the top of that list, the Isle of Man was one of those five registers. The industry recognises, in an independent way, that we are one of the top registers in the world, it is a great accolade for the Island.
The ship registry started in 1984. How has it grown over the past few years?
It opened in 84 at a time when a lot of traditional companies were re-registering or flagging their ships out of the UK and moving themselves. That’s why the Island did it, to generate another sector to the economy. There was massive growth in the first five or six years through the late 80s then steady growth all the way through to 2010. We have continued to grow. We have registered a good number of ships, we also de-register a good number of ships through the normal shipping cycle. Bringing in commercial yachts in 2003 boosted that again at a point when the register may have gone static in terms of merchant ship numbers. Commercial yachting came in and it built a whole new sector on the Isle of Man and gave us a new string to our bow. We have 100 commercial yachts and 400 merchant ships, that’s a sizeable number to deal with on a day to day basis.
Has the economic situation throughout the world had an impact on the shipping register?
It has had a positive impact, It has focused owners on looking at the cost of ship registration. In terms of registry choice, the big top five register 50 per cent of the world’s fleet between them. They can be expensive, they are not great quality and they are not always service driven. Because of the low cost benefits of coming to the Isle of Man, without giving up anything - in fact you enhance the quality of service by coming to the Isle of Man - it has focused them on the economics of ship registration, only a very small percentage of the operation of the ship is the cost of the flag. Because of the economic squeeze people have started looking at that and they have said “well actually the Isle of Man is an attractive option. We didn’t used to discuss costs now we do discuss costs”. We have seen an increase in new clients and new ships to us because the cost benefits are so much better in the Island but you still have that quality of service.
I predict that it will continue to grow. As we have focused our target markets towards Japan and Singapore - Japan is the major ship ownership country in the world and in the Far East particularly Singapore tends to operate a lot of that Japanese owned tonnage - it seems a natural fit to market the Isle of Man to those two jurisdictions. The Isle of Man quite frankly isn’t well known in the Far East. We are starting small, we are regular visitors out there and we are now becoming known as a flag option for Far East operators. I see continued growth, we grew by 12 per cent in tonnage terms last year and I predict we will keep growing around 10 per cent in the next few years which is good managed growth.
Can you tell us about the trade shows that are held throughout the year?
For shipping there is the European aspect and the Far East aspect.
In Europe the two big shows where registers would promote their wares are Posidonia in Athens and in alternate years Oslo in Norway, they have Nor-Shipping.
We have had a presence at those for a number of years. We don’t always take a stand in the current climate. Sometimes we just attend and meet many owners when we are there.
The same system operates in the Far East. One year in Tokyo and one year in Singapore - Sea Asia and Sea Japan.
This year it was the turn of Sea Asia. By pure coincidence (this year) there was the inaugural Singapore yacht show – there was a two day gap between the two shows.
Because we were already in the area, we are already paying to be out in Singapore, it was an obvious choice to take a stand at this first yacht show.
In Europe the yacht market is focused around the Monaco Yacht Show which is in September every year. That’s a massive show for the ship registry and the new Department of Economic Development to exhibit at and also for a lot of the private sector.
There were probably 50 odd delegates from the Isle of Man at in Monaco in 2010 and there will probably be the same for Monaco 2011.
We also have regular visits to clients and potential clients in Singapore and in Tokyo and I have been doing about two visits a year to each jurisdiction. It is important to get our faces known. You are starting from a very low base of “where is the Isle of Man?” and “what can it do?” up to them being comfortable with it as a flag of choice which is what we are seeing now.
You see super yachts that have been registered in the Island and they have Douglas, Isle of Man on them and may be sailing round the Mediterranean and beyond. Is there an advertising benefit from that?
Absolutely. One of the fringe benefits is that promotional element - some of the most beautiful yachts in the world in some of the most beautiful harbours in the world with Douglas, Isle of Man, Peel, Isle of Man, Castletown, Isle of Man or Ramsey, Isle of Man, carved on the stern flying a defaced ensign with a Three Legs of Man, absolutely perfect.
It’s the same with the merchant ships, you have got massive VLCC large crude carriers, big super tankers going into and out ports around the world. Also the pleasure yachts – there are some significant pleasure yachts all around the marinas in the Med and the Caribbean, it sells it. If we can get that in the Far East - Singapore are building new marinas, Hong Kong marinas, if we can get the Isle of Man flag and the Isle of Man name out there it is a fantastic opportunity.
It does seem to be an industry that is changing, particularly in the Far East.
There are a lot of very wealthy individuals in China now. China is starting to build yachts. These have to been owned and operated around the world, they won’t always be in the Far East, sometimes they will be in the Caribbean sometimes they will be in Europe.
We need to assess what’s going on and keep an eye on what’s happening in the Far East because of the new marinas, the new yachts and the new wealth. We need to get in there as a flag of choice for them. The British red ensign is still far and away the flag of choice for commercial yachting and why not choose the Isle of Man? That’s what we need to get out there. You have got a choice of red ensign registers but the Isle of Man is still the best in my opinion and in many of the users’ perspective as well.
There has been a whole industry built around offering services to the shipping industry. It has created employment opportunities throughout the Island.
That’s why the Island works so well, it is this one-stop shop element.
The private sector and the ship registry have to work together – there is a big pie out there we need to get a big slice of that pie. The Isle of Man experience and the solutions we provide from the public sector and the private sector have to work together to make sure it is all customer focused, all within the regulations.
There are people that provide a whole range of services in different ways to the yachting sector and the shipping sector. We had a quick economic benefit assessment of the industry and there are 600 plus employees on very good average salaries and new people coming to the Isle of Man changing what they do to get involved in this business. It is great for the Isle of Man.