EU Shipping Law

Vincent Power

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Chapter 2 A commercial overview of shipping in the European Union

A. Introduction

2.001 It is almost pointless to study European Union (“EU”) shipping law without understanding its commercial context. This chapter is a somewhat general and non-exhaustive introduction to the commercial background to shipping and ports in the EU. The chapter relies heavily on statistics published by the EU, the United Nations1 and various other groups.2 It describes the picture at the EU and Member State levels. This overview relates primarily to shipping activities (in the narrow sense) but it is important to remember that shipping is not a single industry but is instead interconnected with, and related to, many other economic activities such as shipbuilding, ports, ship repair, tourism, pilotage, shipbroking, marine insurance, stevedoring, shipping finance, maritime law and so on. The data outlined in this chapter includes some historical data so as to put the whole picture into context. While some of the data vary (depending on the source of the data), the general trends are clear-cut. 2.002 Shipping is critical both to the world generally and to the EU in particular. In terms of the world generally, shipping carries around 90% of the world’s trade in goods by volume. Interestingly, EU interests control around 40% of the world’s tonnage. As the EU is the world’s largest trading bloc, it is not surprising that shipping is an important source of employment for Europeans (e.g. in ports, shipping companies, ship management agencies, ship repairers, ship finance and shipping lawyers). In broad terms and while figures change over time, EU interests control about 60% of all container vessels, 52% of the world’s multi-purpose vessels, 43% of the world’s tankers and 37% of the world’s offshore vessels.3 It has been suggested that the EU shipping industry contributes about €145 billion to EU gross domestic product (“GDP”), €41 billion in taxes and 2.3

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million jobs in the EU with 590,000 directly in the shipping sector.4 More recently, it was suggested that the EU shipping sector had a direct value of around €54 billion, an indirect value of €57 billion and an induced value of €29 billion.5 It has also been suggested that the EU shipping sector has a multiplier effect of creating an additional €1.60 for every €1.00 contributed by the EU to the EU GDP.6 Employees in the EU shipping sector are regarded as more productive than their counterparts in other EU industries with the workers in the EU shipping sector generating an average of €88,000 each to the EU GDP as compared to an average of €53,000 for other workers in the EU.7 Around 400 million passengers embark and disembark annually in EU ports.8 In 2015, half of EU trade in goods is carried by sea and the value of EU trade in goods with third countries carried by sea was estimated at close to €1,777 billion, accounting for about 51% of EU trade in goods. Some 53% of EU imports entered the EU by sea while shipping represented 48% of EU exports to third countries. The use of maritime transport for EU trade in goods increased slightly over the last ten years: in 2006, less than half (47%) of the EU trade in goods with third countries was by sea. Portugal, Cyprus and Greece were among the leaders for international trade in goods by sea. Shipping was the main mode of transport in a majority of Member States in 2015. The highest shares of trade in goods with non-EU countries carried by sea were recorded in Portugal (81% of trade value), Cyprus (80%), Greece (77%), Spain (74%), Malta (67%), Italy (61%) and Finland (60%). Shares of over 50% were also reported by the Netherlands, Romania, Bulgaria, Denmark and Germany. Interestingly, maritime transport was less significant in the extra-EU trade in goods of the Czech Republic (12%), Luxembourg (19%), Ireland (27%), Latvia (27%), Austria (31%) and Croatia (35%). Rotterdam, Antwerp and Hamburg are the busiest cargo ports in the EU and they collectively account for almost a fifth of the gross weight of goods handled in EU ports. 2.003 In understanding the commercial background, it is useful to reflect on the different types of shipping activities. The European Parliament has categorised shipping activities in a way which is a very convenient summary for present purposes:

“[m]aritime transport can be categorized on the basis of two criteria: service and distance. The first covers bulk shipping and liner shipping for cargo, and passenger ferries and cruise ships for carrying passengers; the second covers deep sea and short sea shipping.

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