Flags of convenience now haunt air cargo shippers

The growing number of parallels in today’s civil aviation to traditional maritime ‘flagging out’ scenarios is striking.

By ·

The International Transport Workers’ Federation (ITF) has issued a warning about the growth of ‘“flags of convenience” in aviation to the sixth International Civil Aviation Organization (ICAO) Air Transport Conference in Montreal, Canada.

In a submission paper from ITF civil aviation section secretary Gabriel Mocho entitled “Would maritime style flags of convenience contribute to sustainable aviation?” he urged a strategy to address the negative consequences of continued liberalization.

His presentation paper in part states: “There is growing evidence that airlines … are increasingly re-structuring their operations to reflect classic maritime ‘flags of convenience’ scenarios. In the maritime sector, ships and fleets can be ‘flagged out’ to countries (including land-locked nations with no maritime tradition, such as Mongolia) that offer tax avoidance, lower-cost safety and labor standards and conditions, and inadequate safety supervisory and inspection structures. “Flagging out” is generally driven by the desire to save costs (including paying lower taxes) or to escape effective regulatory control by the State in which the vessel or fleet is beneficially owned. It is the ultimate privatization of regulation. If a ship-owner does not like what the regulator is doing, it quits the flag and find a more convenient or compliant one.

The growing number of parallels in today’s civil aviation to traditional maritime ‘flagging out’ scenarios is striking. Offshore registries for civil aviation aircraft exist and are growing in Aruba, Bermuda, Ireland, Malta, Georgia and Lithuania. Offshore registries for private aircraft also exist in the Cayman Islands, the Isle of Man, and San Marino.

More on this tomorrow.


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

All Topics
Latest Whitepaper
Just Released: Understanding Hazmat Transportation Management
The rules and regulations governing the transportation of hazardous materials (hazmat) are complex.
Download Today!
From the July 2017 Logistics Management Issue
E-commerce continues to fuel a boom that’s tempered by overcapacity, rate pressures, sluggish demand and political doubt. The result: “cognitive dissonance” that finds a $1.4 trillion market scratching its head.
2017 Truckload Brokerage Roundtable: Technology continues to connect the dots
Cloud Transportation Management Systems (TMS): Weis Markets streamlines “both sides” of the DC door
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
28th Annual State of Logistics: Into the great unknown
E-commerce continues to fuel a boom that’s tempered by overcapacity, rate pressures, sluggish...
2017 Top 50 3PLs: Investment and Consolidation Maintain Traction
The trend set over the past few years for mergers and acquisitions has hardly subsided, and a fresh...

The Evolution of the Digital Supply Chain
Everyone is talking about terms like digitization, Industry 4.0 and digital supply chain management,...
2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...