ASF SERCASF Shipping Economics Review Committee
c/o Japanese Shipowners’ Association
Kaiun-Building, 6-4 Hirakawa-cho 2-chome
Chiyoda-ku Tokyo Japan 102-8603
E-mail : int@jsanet.or.jp
Tel:+81-3-3264-7180 Fax:+81-3-5226-9166

23 October 2012, Taipei

NOTE OF UNDERSTANDING
adoptedat the 25th Interim Meeting of the Asian Shipowners’ Forum (ASF)
Shipping Economics Review Committee (SERC)

The 25th Interim Meeting of the ASF SERC was held in Taipei on 23 October 2012.
The meeting was attended by 21 delegates from the ASF member associations ofASEAN, China, Chinese Taipei, Hong Kong, Japan and Korea. The attendance list isattached.
1. World Economy
The global economy faces increasing uncertainty due to clear signs of weaker
momentum in major emerging market economies in Asia, which still remain global
growth leaders, in addition to a slow and protracted recovery in advanced economies
that are suffering a downward pressure linked with the Euro area crisis. In light of theinterdependent global economy facing continued great uncertainty, partially due to thecoming fiscal cliff in the US, SERC delegates reaffirmed the significance of basing
decisions on reliable economic data and taking rational fact-based actions, given thebackdrop of uncertain and challenging times lying ahead and the important continuingrole that will need to be played by Asian shipowners in supplying needed shipping
services to international markets.
2. Dry Bulk and Tanker Shipping1) Dry Bulk
The meeting shared the view that all segments of dry bulk markets were forecast tocontinue deteriorating for the next two years due to an overwhelming fleet growth andwith a softer demand growth at a single-digit rate, a shift in Chinese iron ore imports
away from Brazil to Australia, a decrease in grain exports from the US as a result of theworst drought in more than half a century, as well as a significant decrease in port
congestion levels. Amidst the accumulated difficulties, the delegates noted, with hope,that a trillion yuans’ worth of infrastructure projects approved in China in September
2012, coupled with world quantitative easing programs, the recently accelerated paceof scrapping vessels and sharp drop of raw material prices, could contribute to anuptrend to some extent in the current stagnant market.
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2) Tanker
The VLCC market has been stuck at bottom levels since late April 2012 when oil
refineries in multiple Asian countries underwent periodic maintenance, which triggereda renewed awareness of the impact on supply being exerted on the market bydeliveries of new vessels in addition to minimal activity in demolishing older vessels.
Some delegates expressed the view that the market could not achieve real recovery
until 2014 due to slower tanker demand growth during 2013 than was previously
expected based on the worsening outlook for global oil demand, a part of which could
be offset by a simultaneous slowdown in tanker supply growth.
3. Liner Shipping
The delegates considered macroeconomic trends in the trans-Pacific and intra-Asiatrades.
Looking to the trans-Pacific trade, the meeting noted that freight rates in thetrans-Pacific trade recovered to some extent as a result of rationalised operations andadjustments of service patterns to better match actual demand. However, thecontainership market faces a difficult recovery together with significant downside risks,having returned to the situation of several years ago with carrier operating losses ofover 6 billion US dollars in total in 2011.
In this regard, recent US economic indicators suggest an underlying upward trend of
consumer confidence in US to its highest level in five years, which shows US consumer
optimism that the overall US economy has improved. This is also reflected in theforecast for November-December holiday retail sales of a 4.1% increase in 2012 incomparison with 3.5% increases on average in the last 10 years.
However, capacity growth with new vessels entering the trade will likely exceed cargo
growth during 2012-2013. The current condition will likely present a challenge to theAsian shipping lines with respect to how to deal with the following year when theamount of new tonnage, including large-size container vessels, is expected to reach apeak. It was noted that carriers could again be adversely affected by market actions,typical of past overcapacity conditions, which are inconsistent with long term supply ofservice in shipping markets.
Turning to the intra-Asia trade, the market continues to grow in light of more free trade
agreements and rising foreign direct investment. In spite of the fact that container
traffic in the trade remains relatively brisk at 5% cargo growths to approximately 9.71
million TEU for the first eight months of 2012, compared to the same period in 2011,
the accelerated entry of new additional services, as well as an upward trend of vessel
size to 3000 TEU in the market, which are replaced from other trades, could adversely
impact the supply and demand balance.

4. Antitrust Immunity-2添付① NOU 25th SERC_final.doc

Recent developments in a number of Asian and other jurisdictions were reported on. .
The meeting reconfirmed the ASF’s long-standing policy that the anti-trust immunity
system for commercial, operational and cooperative agreements was absolutely
indispensable for the shipping industry and the whole trading industry.
5. Other Issues
With regard to the Panama Canal issue, the delegates shared much concern over theunilaterally frequent and sharp cost increases of the Canal toll amidst difficulties
surrounding the shipping industry. SERC delegates agreed that the ASF should urge
the Panama Canal Authority to reconsider the toll increase scheduled in October 2013
in light of the developments in shipping markets and also engage in active participationin new dialogues to be held between the Authority and the shipping industry in order for
Asian voices to be reflected accordingly in the policy-making process of the Panama
Canal management. The members also noted with concern the possible change ofpolicy in certain countries regarding the taxation of shipping income under bi-national
tax treaties.
***

The ASF Shipping Economics Review Committee (SERC) is a forum for seniorexecutives of Asian shipping lines to review macroeconomic trade information anddevelopments, as they relate to shipping and trade. The objective of the SERC is toimprove the quality of executive decision-making by the review of available
macroeconomic data and the sharing of perspectives on major trade and shipping
policy issues. The SERC members remain firmly committed to continue to ensure fullcompliance with all applicable competition laws throughout the entire programme andfollow strict legal guidelines and conduct discussions under the observation of legal
counsel.
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ASF SERCASF Shipping Economics Review Committee
c/o Japanese Shipowners' Association
Kaiun-Building, 6-4 Hirakawa-cho 2-chome
Chiyoda-ku Tokyo Japan 102-8603
Tel:+81-3-3264-7180 Fax:+81-3-5226-9166
E-mail :int@jsanet.or.jp

23 October 2012, Taipei
The 25th Interim Meeting of
the ASF Shipping Economics Review Committee (SERC)
in Taipei on 23 October 2012

Attendance List
CHAIRMAN< Japanese Shipowners’ Association >Mr Yasumi Kudo

Vice President, Japanese Shipowners’ Association(President, Nippon Yusen Kabushiki Kaisha)

MEMBERS< China Shipowners’ Association >Mr Li Zhen
Mr Zhang Zuyue
Mr Ning Dewei(Assistant President, Sinotrans & CSC Holding Co., Ltd.)(Deputy General Manager of Business Development &Management Dept., Sinotrans & CSC Holding Co., Ltd.)(Executive Deputy Secretary General,
China Shipowners’ Association)< Federation of ASEAN Shipowners’ Association >< Filipino Shipowners’ Association >Mr Roberto A Umali(COO, Magsaysay Transport and Logistics Corp.)< Indonesian National Shipowners’ Association >Mr Bani M Mulia
Mr Jovan Patriot(Managing Director, PT. Samudera Indonesia Tbk)
(Manager, PT. Indo Mega Maritim)< Singapore Shipping Association >Mr Jason Wong

(President, South Asia Region, APL Co. Pte Ltd)< Vietnam Shipowners’ Association >Mr Duong Ngoc Tu(Assistant CEO, VINASHIP Shipping Co)< Hong Kong Shipowners Association >Mr Michael Kwok

(COO, Orient Overseas Container Line Ltd. (OOCL))-1-

添付②SERC25 Attend List 25SERC.doc

< Japanese Shipowners’ Association >Mr Tadaaki Naito(Senior Managing Corporate Officer,Nippon Yusen Kabushiki Kaisha)
Mr Takuji Nakai(President, NYK Container Line Ltd.)Mr Yukikazu Myochin(Executive Officer, Kawasaki Kisen Kaisha, Ltd.)Mr Junichiro Ikeda(Managing Executive Officer, Mitsui O.S.K. Lines, Ltd.)Mr Keiji Ushiyama(General Manager, Taipei Branch, Nippon Yusen Kabushiki Kaisha)
Mr Tsutomu Yokoyama (Executive Secretary to the President,
Nippon Yusen Kabushiki Kaisha)< Korea Shipowners’ Association >Mr Dae-Hyoun Baek
Mr Soo Ho Kim(Managing Director of Bulk BU, Hanjin Shipping Co., Ltd.)(Executive Vice President & Head of Liner Unit,
Hyundai Merchant Marine Co, Ltd.)< National Association of Chinese Shipowners >Mr Bronson Hsieh
Mr Robert Ho
Mr Randy Chen

(Vice Group Chairman, Evergreen Group)(President, Yang Ming Marine Transport Corp.)(Director, Wan Hai Lines Ltd.)GUEST SPEAKER
Mr Louis Kuijs(Chief China Economist, the Royal Bank of Scotland)

ASF SECRETARIATMr Yuichi Sonoda(Secretary General, Asian Shipowners’ Forum)

LEGAL COUNSELMr Jeffrey F Lawrence(Cozen O’Connor)

SECRETARIATMr Takashi Ishikawa
Mr Daijiro Mizushima(General Manager, Planning Division,
Japanese Shipowners’ Association)(Assistant Manager, Planning Division,
Japanese Shipowners’ Association)-------------------------2-

添付②SERC25 Attend List 25SERC.doc