German Shipmanagement Company Considers Flagging Out

German ship manager and operator Reederei NSB is considering transferring its nationally flagged vessels to other registries if economic conditions don't become more favorable for domestic registration.

Lloyd's List reports:

Reederei NSB threatens to leave German flag

Boxship operator issues an ultimatum as it negotiates crew contracts and register conditions

One of Germany’s biggest ship operators Reederei NSB is threatening to flag out of the country if talks over crew contracts and flag conditions fail.

The company has released a statement giving unions an ultimatum to find a solution by the end of the year, otherwise it says it will have no choice but to flag its German vessels elsewhere.

Reederei NSB is a shipmanagement company with 42 containerships under the German flag and employing about 500 German and European crew. It operates a total of 69 vessels, with 2,700 crew; the rest already on non-German registers.

Last month, it announced 40 shore jobs would go as it continued cost cutting in the face of financial pressures

The company said the economic situation in the German shipping sector has forced it to review its retention of the German flag.

It is in talks with the trade unions to find a compromise to the situation.

“If no economically feasible solution has been found by the end of 2014, Reederei NSB will see itself compelled to discontinue entirely the operation of its ships under German flag,” it said.

It added the continued employment of European nationals was no longer economically feasible and the company would endanger its position if it operated under the German flag, hence a complete reflagging of the German vessels is possible.

“The market situation in shipping is compelling investor representatives and shipping companies to take measures to ensure the retention of single-ship companies.

“These include reducing ship operating costs and thus also outflagging.”

NSB has agreed to an external auditor, appointed by the trade unions, to review the company’s financial position, as well as initiating dialogue with political decisionmakers and relevant associations to see if a solution can be found to prevent reflagging the fleet.