|The Bahamas Investor Magazine
July 23, 2015
July 23, 2015
It should come as no surprise that a nation of 700 islands has a maritime industry that boasts the fifth largest ship registry in the world. But there is a lot more to the maritime industry in The Bahamas than simply vessel tonnage.
Under the stewardship of chairman Anthony Kikivarakis, the Bahamas Maritime Authority (BMA) is looking to leverage its reputation to develop a more complete offering of products and services.
The maritime industry is currently the third largest contributor to the gross domestic product of The Bahamas, behind tourism and financial services, which hold the first and second spots respectively. The ship registry is broad and deep, with gross tonnage of around 58millionfrom60countries and in all classes of vessels including tankers, bulk carriers, general cargo, passenger and cruise ships, ferries and even offshore support and oil rigs.
The Maritime Authority deals with the global shipping, while the Port Department of the Ministry of Transport deals with local shipping.
“When you put them all together it is clear that The Bahamas is a maritime nation with a lot of activity up and down the archipelago, from cruising to the movement of goods, foodstuffs and fuel trans-shipment,” says Kikivarakis.
What attracts shipowners to The Bahamas’ registry, according to Kikivarakis, is the quality of the flag. “The Bahamas has a reputation built on 30 years of inspecting, monitoring and servicing its flag carriers to a very high standard,” he says. “It is recognized by the US Coast Guard as having a ‘high-quality maintenance of ships’ and one of the lowest port detention rates of any flag. Consequently, The Bahamas’ ship registry is on the white lists of all major seafaring nations.”
Wealth of opportunity
This reputation presents enormous opportunities for leverage, suggests Kikivarakis, to seek out synergies across other industries and tap new lines of revenue.
“It is the authority’s responsibility to maintain the high quality of the flag and have growth in quality clients,” he says. “But in addition to that we want to introduce shipowners to Bahamian financial services and the skilled labour pool available in The Bahamas. We are looking beyond just being a registrant for shipowners and their ships, but also to encourage them to be part of The Bahamas.”
The opportunities are numerous, says Kikivarakis, who is a qualified chartered accountant but has many years of experience in transport and logistics through his previous role as chairman of the Bahamas Airport Authority, a position he held 2002-07. “We are looking to engage shipowners at a deeper level; to encourage them to set up their ship management businesses here and look at owning a second home here. We have had some success in this so far, but there is plenty more opportunity for growth.”
Another field ripe for development, according to the BMA chief, is arbitration. By its very nature, the maritime business involves many different jurisdictions with many different laws and regulations, so disputes on the high seas can be difficult to resolve. “Arbitration offers a tremendous opportunity and ideally shipowners will look to The Bahamas as the place of choice to resolve international disputes,” says Kikivarakis.
Plans to make the jurisdiction an arbitration hub for maritime affairs have been in the offing for several years, but progress has been slow, partly because of the number of players involved in making it happen. “The challenge is that it requires members of the financial services and legal community to work with the Ministry of Transport and it’s not moving as fast as we would like. It’s coming along, but could move faster.”
Captive insurance, establishing more crewing agencies and the lucrative second- home market are also potential revenue generators if more shipowners can be convinced to set up their services and legal community to work with the Ministry of Transport and it’s not moving as fast as we would like. It’s businesses in The Bahamas. “Maritime law and administration are prime for investment,” continues Kikivarakis. “The Bahamas has a number of ports and docks that could be better managed, particularly on the Family Islands. We are an open country for investment and there are plenty of opportunities to live and do business here.”
Kikivarakis believes that the biggest potential for growth, however, remains in the cruise industry. The Bahamas has the largest registry of cruise liners in the world, with Norwegian Cruise Lines, Royal Caribbean and Carnival all flying the Bahamian flag and sailing in the region’s waters. With each ship providing employment for as many as 2,000 people, The Bahamas could be a significant supplier of skilled seafarers, above and below deck.
The training infrastructure is certainly in place. The Bahamas Maritime Cadet Corp currently has around 430 students enrolled nationwide and since the programme was launched ten years ago has graduated 700 seafarers. Since 2011, The College of The Bahamas (COB) Maritime School has been offering three bachelor’s degree programmes in collaboration with the State University of New York (SUNY). The joint programme allows students to complete three semesters at COB, followed by four at SUNY, with the final semester being back at COB.
For the cruise industry in particular, argues Kikivarakis, The Bahamas offers high-calibre, well- trained employees. “One thing we know very well in The Bahamas is (hotels) and a cruise ship is basically a floating hotel. So once our students get their basic seafarers training, they can take the opportunity to go and work at sea.”
The industry is starting to take notice, with Carnival’s Celebrationemploying well over 100 Bahamians in its last round of hiring. “We want Bahamian students to be of a high enough standard to get a job on any vessel,” adds Kikivarakis.
To get the word out about what The Bahamas has to offer, the BMA is working with the Bahamas Shipowners Association to promote its pool of financial services and maritime professionals to a global audience. In April this year, representatives of the BMA visited major shipowners in Tokyo, Los Angeles, Seattle, San Francisco and Vancouver to discuss opportunities to expand maritime business and services.
Furthermore, at the association’s annual general and quarterly meetings, the BMA regularly invites members of the financial services industry or the law community to come and present to the shipowners.
“It is all about going out and meeting people and seeing what services they want and letting them know what The Bahamas can offer,” says Kikivarakis. “We meet with registrants and cruise shipowners regularly and see if we get them on board with the idea of The Bahamas and what it has to offer outside of the registry. We can give a good testimony of the opportunities available for people to come and live and work here. I am optimistic that once the word gets around people will see the benefits.”