Chapter　4　 Reconstruction of Ocean-Going Shipping and Shipbuilding

4. 1　Reconstruction of Oceangoing Shipping

　 　Of late, the shipping industry in Japan has been in a very severe businees environment. In particular, the profitability of Japanese shipping firms has been deteriorated in the trans-pacific market as a result of low level in freight rates and rapid appreciation of the yen. To overcome this situation, further efforts for scaling-down and rationalization of management are required. It is also necessary to adapt business strategies more flexibly to changing market structures.
　 　The operating revenue of the shipping companies which received interest subsidies in fiscal 1986 showed a sharp decline of 26.2% from a year earlier due mainly to strong yen. (Table 8) Supposing the average foreign exchange rate for fiscal 1986 was the same as that for 1985, these shipping industries had an operating income of approximately \49 billion. But actually they suffered a deficit of about \47 billion, which means that due to strong yen their balance underwent a drop of some \96 billion. In the years ahead, these companies should introduce hedging measures against foreign exchange risks in a full scale. They need to take drastic actions for cost saving, too, to tide over the trend of continuing strong yen and weak dollar.

　

4. 2　Promotion of Measures for Seamen


　 　In December 1986, the subcommittee of the shipping measures section of the Council for Rationalization of Shipping and Shipbuilding Industries presented an interim report which recommended emergency actions, including measures for employment of seamen. Since April 1987, shipping industries have also been taking emergency employment measures on the basis of labor-management agreement. The government has strengthened policies for promoting employment of seamen, such as assistance to job hunting activities and exploitation of employment opportunities in foreign ships. In addition, it will promote further steps to modernize seamen systems and upgrade seamen education and training according to the "Fundamental Policies of Seamen Employment Measures," a report from the Central Labor Relations Commission for Seafarers dated May 1987. The government will also encourage seamen to switch to jobs on land.
　 　If merchant fleets in Japan are to regain competitive power, labor and management should join hands with each other to do their best, including endeavors to modernize seamen systems. The government needs to create an environment where these efforts on the part of the industry will bear fruit.


4. 3　Reconstruction of Shipbuilding Industry


　 　The shipbuilding industry in Japan is in a very strict situation due to globally inactive demand for new construction of ships, rise of new shipbuilding countries and yen appreciation since the fall of 1987. (Figs. 14 and 15) To overcome this plight, the reconstruction of the industry has been promoted through encouragement of systematic reduction of production facilities and business tie-up in accordance with the Temporary Measures Law Concerning Operation Stabilization of Designated Shipbuilding Enterprises enacted in April 1987. In addition, steps to create demand, such as projects for dismantling and removing ships and promoting the replacement of ships owned by the official sector, have been taken. Dialogues with Europe and the Republic of Korea have been continued as to shipbuilding, too.

　

4. 4　Entry into New Business Areas


　 　As the yen is appreciating and industrial structures are changing, the shipping and shipbuilding industries are troubled with a serious recession. To stabilize their management and improve their profitability, their important challenge is the diversification of their operation through entry into new business areas, such as leisure industries. The Ministry of Transport will take necessary measures to support these efforts so that the industries may take up these new activities smoothly.

　

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