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German shipowners warn of major out-flagging

Staff writer ▼ | August 25, 2014
The German Shipowners Association (Verband Deutscher Reeder, VDR) warns the federal government of a large-scale out-flagging unless the rules for German and European crews working on German-flagged ships are eased.
German ship flag
Verband Deutscher Reeder, VDR   All opportunities cut costs
"In the sixth crisis year, Germany’s shipping companies are being impacted by immense cost pressure that is threatening the competitiveness of Germany as a maritime location in its entirety. Companies are compelled to exploit all opportunities available in order to cut costs.

"A migration to other European quality flags that provide improved framework conditions therefore is an inescapable measure for a large number of companies, a step that is frequently also requested by lenders," Ralf Nagel, CEO of the German Shipowners' Association, tells ShippingWatch.

Unlike for instance the Danish International Ship Register, DIS, and other registers such as Norway's, where shipowners pay net wages to the seafarers and thus save taxes, German shipowners with German-flagged ships still have to pay social contributions that cover pensions, health and accident insurance as well as unemployment benefits.

The German international ship register also requires that there must always be four German or other EU citizens on board the ships, who shipowners pay taxes for, though the register allows a 40 percent deduction.