China is commonly viewed as a nation of sedentary, land-loving people. In actuality the inhabitants of China's long east coast have been skilled navigators since ancient times. Some archaeologists claim that American Indians are the descendants of ancient Chinese seafarers who voyaged across the Pacific thousands of years ago. Today vessels owned by overseas Chinese represent a tenth of the world's tonnage. The island of Taiwan, surrounded on four sides by water and boasting numerous harbors, is situated at the center of East Asia's shipping routes.

As the natural resources of the island are limited, Taiwan's economy depends on external trade. Trade accounts for ninety percent of the island's gross national product, which in turn relies upon marine transport. This created a need for the development and expansion of Taiwan's shipping industry.

Based on the rapid development of Taiwan's external trade in the last ten years, the government is now making plans for mercantile transport development. These plans include increasing fleet supply and warehouse terminals in Taiwan, and expanding the long distance route network.

Until now, Taiwan's mercantile transport industry has not kept pace with trade because shipping companies prefer to register flag-of-convenience vessels rather than use carriers flying the Chinese flag. The term "flag-of-convenience" refers to certain countries such as Panama, Liberia and Singapore, who authorize foreign ships to register with their country and operate under their flag. Aside from a registration fee and tonnage tax, the foreign ships are free from any controls or obligations.

Registering as a flag-of-convenience vessel has many advantages. Countries who authorize foreign ships to use their flag have no limitations on the sale or transfer of ships. Loans are easy to obtain, and with a small amount of capital, foreign companies interested in expanding their fleets can easily purchase ships. In addition, flag-of-convenience vessels pay very little tax and enjoy loose inspection regulations. The flag-of-convenience is widespread throughout the shipping industry, and particularly popular with Taiwan's lines.

The government has taken several steps to help solve the problem of inadequate national-flag tonnage. Overseas Chinese who own flag-of-convenience vessels are encouraged to fly the ROC flag with promised exemption from national obligations and foreign currency restrictions. Favorable credit terms, priority in receiving contracts for shipping national goods, and tax benefits are given to Chinese companies who invest in national-flag carriers.

Building new ships is very expensive. The cost of a new container vessel built by the government-run China Shipbuilding Corporation is three times that of a used vessel bought from another country. Thus most mercantile companies prefer to buy used foreign ships.

In recognition of this fact, the government decided last year to loosen restrictions on purchases of foreign ready-made vessels which carry the national flag. These may now remain tax exempt for four years. Within six months after the relaxation of tax policies, a large number of flag-of-convenience vessels converted to national--flag carriers, and many newly purchased ships registered under the Chinese flag. The Navigation Department of the Ministry of Transportation estimates that during the coming year goods transported by national-flag carriers should increase to 38%, in contrast to a previous 29.4% of shipping transactions. This is a significant milestone in Chinese mercantile transport.

Taiwan's marine transport system utilizes two basic types of carriers: bulk carriers and container vessels. Bulk carriers transport materials such as coal, minerals and grains. They usually operate under a nonscheduled or tramp service, whereby the purchaser of the cargo charters a vessel and then works out a route and sailing time with the shipping company. Buyers shipping ordinary commodities use vessels which carry many large square containers. These vessels, called container ships, usually sail fixed routes on a fixed schedule.

During the economic recession in 1982, Taiwan companies took the opportunity to expand their fleets at lower cost. The result was an oversupply of bulk carriers and a drastic drop in profits. Profits in the container ship industry also decreased, but not as markedly as in the bulk carrier industries, where surplus is not a problem.

Containerships, when used along with container trucks, make for a speedy door-to-door transport network. Container vessels better ensure safe transport of goods. In the past, goods packed in wooden and cardboard boxes or canvas bags were vulnerable to damage during the voyage. Piled atop each other in a large mass, they were also difficult to unload and identify. These problems have been resolved by standardized weather-proof containers, which can be loaded mechanically.

The added expense of these new breakthroughs however, and the necessity of adhering to a fixed schedule regardless of how full the carrier is, contribute to investors' reluctance to venture into containerships. The supply has therefore never exceeded the demand. Yet while containerships have not fared well on the world market, domestic marine transport companies continue to offer fixed-schedule container services and expand their long-distance lines, an indication of the stability of trade in Taiwan.

What are the major shipping companies in Taiwan? The first companies to introduce the containership to Asia were Chinese Maritime Transport Limited and its sister enterprise in Hong Kong, Orient Overseas Line. They were the first Far Eastern companies to open routes between the Far East and Europe. In 1956 the Chinese Maritime Transport Company joined the Far Eastern Freight Conference (FEFC).

The FEFC is an international organization comprised of several shipping lines which offer set-schedule runs between Europe and the Far East at standardized prices. Its members are all large-scale, prestigious, reliable companies. While their fees are relatively high, they control a substantial part of the market, making it difficult for other companies sailing the same route to compete.

Another of Taiwan's substantial marine transport companies is the Yangming Marine Transport Corporation, a company which took over a government run enterprise previously located in Shanghai. Its national-flag carriers are all constructed by the China Shipbuilding Corporation. Routes are centered in Taiwan.

Yangming offers both container and bulk services. Last year it opened up new routes, including one to northwestern Europe. Charging fees that were ten percent lower than FEFC standards, it won a considerable amount of business. It is hoped than Yangming's national-flag carriers will have continued influence and success.

A company which has received considerable attention this year is the Evergreen Marine Transport Company. Evergreen uses a large proportion of Taiwan-built, and national flag carriers. Its tonnage has been multiplying rapidly, and is predicted to continue growing in the future.

Evergreen also plans to open up an unprecedented round-the-world containership service in July of this year. Using sixteen 42,000-ton carriers, the service will provide one run every ten days. This bold plan has surprised the international shipping market encompassing Japan, Hong Kong and Taiwan.

While set-schedule vessels cater to common trade manufacturers, the clients of non-scheduled bulk carriers are large companies or organizations such as Taiwan Power and the China Steel Corporation. The largest local bulk carrier company is the Eddie Steamship Company, which boasts fifty ships, over half of which fly the national flag. Due to the long-term nature of their contracts as well as the stability of the natural resource market, the Eddie Company has been little affected by the general instability of the bulk market. Eddie has been given an additional boost by government policies favoring national-flag vessels, making the company a first choice in government contracts for the transport of imported goods.

While ships and routes tend to receive the greatest attention, harbors play a significant behind-the-scenes role in marine transport. The government has spared no efforts in building harbor facilities, and Taiwan currently has five international harbors. Kaohsiung is the fourth largest containership harbor in the world, meeting all present needs for loading equipment and storage space. New facilities have been accompanied by improved harbor services, which have recently fulfilled international standards.

Plans have also been made to set up external financial centers, free trade zones, and additional relay ports, where transported goods of long-distance origin can be kept before delivery to their final destinations. Taiwan presently has two main relay ports: Kaohsiung, which serves containerships and Taichung, serving bulk carriers. Their use is rapidly increasing due to reduced harbor fees and simplified procedures.

But most shippers still feel that customs and inspection at these ports need to be further simplified for the sake of time efficiency. Only in this way can Taiwan compete with the convenient customs procedures and duty-free status of Hong Kong and Singapore. Well-planned relay ports with high service standards will not only improve Taiwan's trade status, but the quality of marine transport as well.

Taiwan has made unprecedented progress in all areas of marine transportation--increasing national-flag tonnage, opening new routes, and expanding harbor facilities. A five percent increase in world trade is predicted for 1984. The year will be an important turning point for marine transportation, providing the opportunity for Taiwan's shipping industry to sail forward.

(Jill Ardourel)

[Picture Caption]

1. Taiwan shipping companies have already developed several long-distance set-schedule routes. An Evergreen Company containership passes through the Panama Canal at night. 2.3.4. Containership transport is convenient and trustworthy, and has become the most common method of carrying manufactured goods. 2. Yangming's containership terminal in Kaohsiung. 3. Fork lifts stack containers. 4. Cranes hoist containers.

1. Kaohsiung harbor is the world's fourth largest containership harbor. 2.3. With a plum flower trademark, Chinese Maritime Transport Ltd. was founded by the late shipping magnate C.Y. Tung. 4. An Evergreen carrier sails away from San Francisco on its way back to Taiwan.

1. The government plans to make Taiwan a central relay terminal in the Far East. Kaohsiung harbor will be utilized primarily for containerships. 2. The Yangming Company's general manager states that in May of this year Yangming plans to open up a route between Taiwan and Australia. 3. The vice-president of Chinese Maritime Transport states that working with Orient Overseas Co. in Hong Kong, they were the first to bring the containership to the Far Eastern maritime transport business.

1. Evergreen Transport's vice-president points out that the company's rapid growth is the result of hard work. 2. Wanhai's president asserts that their near-sea line's greatest competitors are the long-distance transport companies. 3. The Eddie group has the greatest tonnage in national carriers of all transport companies in Taiwan. Pictured is the Taiwan-made Panamax Neptune.

2.3.4. Containership transport is convenient and trustworthy, and has become the most common method of carrying manufactured goods.

2. Yangming's containership terminal in Kaohsiung.

2.3.4. Containership transport is convenient and trustworthy, and has become the most common method of carrying manufactured goods.

1. Kaohsiung harbor is the world's fourth largest containership harbor.

2.3. With a plum flower trademark, Chinese Maritime Transport Ltd. was founded by the late shipping magnate C.Y. Tung.

2.3. With a plum flower trademark, Chinese Maritime Transport Ltd. was founded by the late shipping magnate C.Y. Tung.

4. An Evergreen carrier sails away from San Francisco on its way back to Taiwan.

An Evergreen carrier sails away from San Francisco on its way back to Taiwan.

1. The government plans to make Taiwan a central relay terminal in the Far East. Kaohsiung harbor will be utilized primarily for containerships.

2. The Yangming Company's general manager states that in May of this year Yangming plans to open up a route between Taiwan and Australia.

1. Evergreen Transport's vice-president points out that the company's rapid growth is the result of hard work.

2. Wanhai's president asserts that their near-sea line's greatest competitors are the long-distance transport companies.

3. The Eddie group has the greatest tonnage in national carriers of all transport companies in Taiwan. Pictured is the Taiwan-made Panamax Neptune.