In 2024, the five largest ship registries by registered dead-weight tons accounted for 61% of the world fleet. These registries are Liberia (17%), Panama (16%), Marshall Islands (13%), Hong Kong SAR (9%), and Singapore (6%). Liberia and the Marshall Islands have achieved remarkable growth in recent years, with each scoring a growth rate of over 100% since 2014. This growth is associated not only with a general world fleet growth of approximately 40% in the last ten years but also with strategic administrative decisions offering favorable tax conditions, lower operating costs, and streamlined fiscal regulations.
A common trait among these leading flag states is that they all are open registries, allowing owners from any country to register their vessels under the flag of the registry nation. International maritime law, particularly the United Nations Convention on the Law of the Sea (UNCLOS), permits ships to be registered in any country that offers a registry. This legal flexibility has fueled the growth of open registries, where foreign owners can register their vessels with few restrictions. The preference for these registries is driven by a blend of economic, operational, and legal factors. But what are these top-performing registries and what’s the secret behind their success?
Since 2023, Liberia has surpassed all other open registries, achieving an impressive growth rate of approximately 13% year-over-year and overtaking Panama as the largest ship registry for the first time in three decades. This growth is prominently motivated by the successful attraction of shipowners from Greece, Japan, China, Singapore, and the United States. Remarkably, flag transfer tonnage contributed to 60% of this expansion. Alfonso Castillero, the chief officer of the Liberian flag and former general director of the Panama registry, is credited with this significant success. Observers attribute Liberia’s achievements to its extensive worldwide services and efficient registration process. During the peak of the COVID-19 pandemic, Liberia was the first flag to offer remote vessel registrations, inspections, and delivery services. In 2020, Liberia expanded its administrative reach by opening new offices in Oslo and Houston and ventured into innovative collaborations, such as partnering with Hyundai to construct a hydrogen-powered cargo ship.
The Panama Maritime Authority manages the second-largest ship registry, historically a favorite choice for registration. In recent years, Panama has not only lost its leading position but also recorded the lowest 10-year growth rate among the top five registries (Liberia +101.2%, Panama +12.4%, the Marshall Islands +101%, Hong Kong +42.1%, Singapore +31.6%). After decades of leadership, owners are exiting Panama’s registry in favor of more modern and reliable administrations. As of July 1, 2024, Panama is the only top-ten registry gray-listed by the Paris MoU on port state control. Of the 5,795 inspections conducted by PSC between 2021 and 2023, 420 resulted in vessel detentions (7.2%). Panama has faced challenges with its aging legacy fleet, contributing to a higher detention ratio for ships under its flag. However, the country reports significant progress in modernizing its fleet: in 2023, 56.7% of newly registered ships were less than 15 years old, with an average age of four years. Newbuilds accounted for 339 ships, totaling 8.3 million gross tons.
The Marshall Islands ship registry ranks third, experiencing consistent growth in recent years, averaging a 7% growth rate since 2014. The highest increments were observed up to 2018, when the registry briefly overtook the Liberian flag, though it has since decelerated. The registry’s emergence is linked to a strategy focused on reducing fleet age and improving safety and security standards without compromising fiscal benefits or operational structure. The Marshall Islands registry boasts 28 regional offices and technical staff across multiple countries. Among the top ten flag states, the Marshall Islands registry currently has the lowest risk profile in the Paris MoU ranking as of July 2024, reflecting the authority’s commitment to higher safety and security standards.
The global shipping industry’s reliance on open registries is a testament to the strategic, economic, and operational advantages they offer. Liberia’s recent ascendancy to the top spot highlights the dynamic nature of this sector and the importance of innovative and efficient administrative practices. Conversely, Panama’s challenges underscore the need for continuous modernization and stringent safety measures. The consistent growth of the Marshall Islands registry further exemplifies the benefits of strategic planning and adherence to high standards. As the industry evolves, the interplay of these factors will continue to shape the landscape of global ship registration.
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