Foundering

BRITAIN is not a world leader in much any more. That partly explains why it is so proud of London’s continued role as a—if not the—centre of the world’s maritime services industry. The dirty business of building and manning ships long ago migrated to Asia, but in insurance, finance, arbitration and brokerage London has retained much of its pre-eminence. The capital accounts for a world-leading 26% of global maritime insurance. British firms also arrange contracts for half the world’s tanker-chartering and 30-40% of its dry-bulk chartering. More maritime disputes are referred to arbitration in London than anywhere else. The International Maritime Organisation (IMO), the industry regulator, is based in the city.

By any standard, this is an impressive cluster. Yet London’s maritime clout is under threat as never before. In recent years other port-cities, notably Singapore, have made concerted attempts to grab bigger chunks of London’s business. But it is the precipitate decline of Britain’s shipping register that most worries the captains of industry. They fear that the country may soon have so few ships left that it will no longer be able to support a services cluster. That would be a huge blow to a maritime industry that generates £8.5 billion ($13.1 billion) a year.