ANNUAL REVIEW OF MERCHANT SHIPPING IN THE SINO-SOVIET BLOC 1960 (RR EM 61-15)

Created: 7/14/1961

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Economic Intelligence Memorandum

ANNUAL REVIEW OF MERCHANT SHIPPING IN THE SINO-SOVIET0

CIA/RR*

CIA HISTORICAL REVIEW PROGRAM RELEASE IN3

CENTRAL INTELLIGENCE AGENCY Office of Research and Reports

CltCr*"

Economic Intelligence Memorandum

ANNUAL REVIEW OI- MERCHANTN THE SINO-SOVIET0

CIA/RRH

information *tte of the United of the

n> im jm.

prison ii

CENTRAL INTELLIGENCE AGENCY Office of Research and Reports

*

RIV!"

FOREWORD

This memorandum is onecries of annual publications that are designed to present ln summary fora the significant developments In transportation la the Sino-Soviet Bloc during each preceding calendar year. In addition to the seooraoduc on merchant shipping, the series includes tvo other annual publications, one onin inland transport in the Sino-Soviet Bloc and another on civil aviation ln the Sino-Soviet Bloc.

This memorandum has not been coordinated vith other USIB agencies.

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CONTENTS

I. Bloc-Wide

and

Shipping Services ln Southeast Asia .

Merchant Shipping Activities .

in West

II.

of the

of Foreign Shipping

of

D- Expansion of the Tanker

III. European

of the

Sources and Costs or Added

Fleet Characteristics

or Foreign

Developments

East

Tor

TV. Consninlst Far

Growth of the

Utilization or Foreign Shipping

3- Proopccts for

Appendix

Jtatistical Tables

Tnbl ee

Estimated Performance or the Merchant fleets

Sources and Costs of Additions to the Soviet

3- Exports of Petroleum from Soviet

and Costs of Additions to the Merchantthe European0

Characteristics of the Merchant Fleets of the European

6- Estimated Performance of the Merchant Fleets of the

Communist Far East,

of Additions to the Merchant Fleet

Merchant Fleets of the Sino-Soviet Bloc, by Type,

Number, and Tonnage,nd

9- Seuborne Foreign Trade of the Sloo-Sovlet Bloc,

Performance of the Merchant Fleets of the

European

Fleets of the European Satellites, by Type,

dumber, and5

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11 ill li T

AKNUAL REVIEW OF MERCHANT SKIFFI.T, IN THEIET BLOC*

I. Bloc-Wide Developments

A. Growth and Performance

The net additions to the vessel tonnage oi' the combined merchant fleet of the Sino-Soviet Bloc0 were the largest of any year to date.** The net tonnages addedere as follows (in thousands of deadweight

ua

Y

Additions to both the Soviet fleet and the conbined fleet of the European Satellites0 wereigher level than ln any previous year. The net additions to the Chinese fleet were well below the levels8 arid the peak year The increase in the Soviet fleet was most dramatic, particularly in theof tankers. WT of new tanker tonnage was three times the tanker tonnage acquired9 and exceeded the previous

* The estimates and conclusions ln this memorandum represent the best judgment of this Office as

** The discussion of ships and fleets in this* memorandum refers only to shipsross register tons (CRT) and above and does not include ships in the Caspian Sea. Figures for the Soviet fleet include refrigerator ships in the fishing fleet. (Gross register tonnageeasure of the cubic capacity of the cargo spacehip expressed in tons at the rateross register tonubic feet.) Tonnages are given in metric tons throughout this memorandum. Deadweight tonnageeasure of the carrying capacityhip in metric tonsthat iw, the difference between the ship'slight and its displacement loaded.

high ofOCO IWf acquired However, the additions to the ooviet dry cargo fleet, while proportionately raore modest, vere of greater magnitude,WT andew high in the annual growth of the Soviet dry cargo fleet.

In numbers of ships the combined fleet of the Sino-Soviet Bloc increased byankers and lo> dry cargo vesselsotal inven-

illion DWT (see

V,' nve^ents by the Sino-Soviet Bloc0 Probobly amounted to almost0 million **

The USSR, purchasing entirely newly constructed ships, accounted for aboutercent of the total outlay. otal ofillion was paid to non-Bloc countries.

n each yearPerformance of the

Bloc fleets increased, as shown in Table The amount of ton-

railee has been increasing faster than the amount of tons carried, a

result or greater average lengths of haul as more cargo is carried on

tne longer routes in international trade. Whereas the Satellite fleets

are engaged most heavily In international trade and are constantly

increasing service on the long-haul routes, aboutercent of the

tons carried by the Soviet fleet andercent of the tons

carried by the Chinese fleet arc in domestic coastal or lntcrcoastol

trade. The average length of haul of the Satellite fleets Is almost

four times the average length of haul of the Soviet fleet and almost

seven tiaes the average length of haul of the Chinese ricct. Thus,

although the Satellite fleets were responsible forercent of

the tons carried by the combined Bloc fleets, ton-miles performed by

the Satellite fleets amounted toercent of the total Bloc ner-

As in previous years, the Sino-Soviet Bloc continued to utilize

ahare of lta ^aborne foreign trade. All of theillion tons of the seaborne foreign trade of Communist Chinaillion tons of its coastal shipping moved on.foreign vessels. The USSR and the European Satellites hadillion tons of seaborne foreign trade Although both the USSR and theSatellites carried greater absolute volumes of this trade than eyer before, they still relied on foreign shipping to carry UE. 5tons of this trade {see. This amount was an increase of more thanillion tons9omewhat larger share of the total than8

* Appendix,elov. dollar?ValUeS eXpreSSedrandum are current US

ollows on p.ppendix,elow.

. Table 1

Estimated Performance of the Merchant Fleet of the Sino-Soviet Bloc

7 8

Metric Tons Carried

USSR

Satellites

Far East b/

U

u

Ton-Miles c/

Satellites

Far East b/

k

ercent of the ton-mile performance reported byChina0 and aboutercent of the performance inwere accounted for by those non-Bloc ships chartered bywere used in the coastal trade. The proportions0 percent andercent, respectively.

autical miles.

B. Coordinated Snipping Services ln Southeast Asia

0 the Bloc, presumably under the auspices of the Council for Mutual Economic Assistanceeries of actions portending an intensive shipping offensive in Southeast Asia. Several developments noted during the year are an apparent implementationong-proclaimed intention to pool merchant ships under the coordinated control of CEMA. It appears obvious from the evidence cited below that the main purpose of the program ic economic exploitation as well as harassment of the established liner services in the area.

The increasing attention paid by maritime fleets of the Soviet Woe to Southeast Asia had several significant results during the year. Poland successfully continued its efforts to reinstate Polish shipping services to Thailand. These services had Ceased inhen the Thai government closed its ports to all Bloc ships except those from Bloc countries with whom Thailand had established diplomatic relations, ihe Thai government announced in1 that Poland had been invited toervice from Bangkok to Europeeasure against high freight rates and said that Polish chips would call once monthly to load jute, rice, and rubber at less than the Par Eastern Conference rates.* Thailand indicated thatalso have been made for other nonconference lines to call at Thai ports. The Thai action inviting Polish shipping serviceseversal of policy, inasmuch as there are still no diplomaticbetween Thailand and toland.

Inzechoslovak ship made the first callloc vesselambodian port. This development culminated in an announcement in0 from Fhnom Penhoint Czechoslovak. Cambodian shipping company was to be established andino-Cambcdian shipping firm also would be established. In1 plans had progressed sufficiently to allow the announcement of names and routes; The Slno-Khmero Shipping Company to ply between Cambodia and China and the Khmero-Czech Shipping Company to ply between Cambodia and Europe. Both Joint companies also are to help train Cambodians in maritime matters.**

In0 an East German freighter made the first call of an East German vesselurmese port. After exploring the market, the East German shipping company, VEB Deutsche Seereedereinnounced

It,^ penIn8 rc*ular fi*rvices between Burma and the UK/European Continent and named as Its agent the Burma Agents Corporation. The four sailings that were advertised for September through0 were made, and the shipsCO tons each at ratesercent below Conference rates less rebates.

Indications that this intensification of service ln Southeast Asia was the result of an integrated Bloc plan came from-reportsonference in0 at the Soviet Embassy in Rangoon of all Bloc commercial representatives to discuss the merging of Sino-Soviet Bloc shipping lines to exploit the areas. epresentative of the

* APParently in reaction to the rate-cutting practices by the East German fleet In the area.

** For another caselose connection between Communist China and Czechoslovakia in the maritime field, see C, p. 5 below.

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Burma Agents Corporation was Informed tbat his firm eventually would be named exclusive agent for tbe cartel that would pool the fleets involved into one line with coordinated schedules. The combined fleet services also would be extended to new ports in tbe area even if the cargo were In uneconomic quantities.

Although lt is not certain whether or not this coordinated program has been Implemented inew Impetus to the program became likelyormer official of Sovfracht* replaced the Soviet Commercial Counselor. The new Counselor was reported to have been sent to Rangoon for the express purpose of handling preparations for the Bloc shipping cartel. The representative of tho Burma Agents Corporation reported that the USSR would begin service between Odessa and Rangoon earlyl, with calls at Karachi, Bombay, Colombo, and Culcuttn, and again the Burma Agents Corporation was to be named as agent. The representative also reported, moreover, that the Polish Ocean Lino* would transfer its agency in Rangoon to the Burma Agents Corporation.**

The most Immediate effect of the East German service was felt by the three conference lines operating between Burma and the UK. Other members of the Boy of Bengal Homeward Conference serving other terminal areas, such as the Far East, as well as other Southeast Asian and Far East Conferences would be affected if the full cartel were Implemented to thedegree reported.

In December the Burma-UK Conference put pressure on the East German shipping company (VDS) tn East Berlin, and conference sources reported that negotiations culminatedemporary agreement whereby the VDS would charge Conference rates and limit ita operations to service between Burma und East Germany. In April, however, the VDS put two ahlps into Rangoon, offered ratesoercent lower than Conference rates, and procured general cargo ror Uie UK. During the call of the second ship, the Conference lowered rates ln turn to below the VDS mteu. It Is apparent that any agreement which may have been mode ln December is no longer applicable andate war is underway ln tho Burma-Europe trade.

C. Slno-Sntelllte Merchant Shipping Activities

The three-way transferhip from the Polish flag to the Chinese Communist flag9 and then to the Czechoslovak flog0 suggests an association between China and Czechoslovakia similar

The Soviet ship-chartering agency.

** Bo notices of termination of agreements hove been reported to

date by the present agents In Rangoon for the Soviet or Polish shipping

lines.

to Chinese arrangements with Poland. Since late1 theknown as Chlpolbrok-oint venture ownedercent by Poland andercent by Communist China) has operated chips under the Polish flag. 6 shipsanker andWT had been assigned to Cbipolbrok. hree ohlpe totaling0 DWT were added to the Chlpolbrok fleet, and one old freighterWT was transferred to the Chinese Communist flag. Although ships or the Chlpolbrok fleet fly the Polish riag, there is evidence that about half of the ships are owned outright by China. In the last few years, several of the newly built ships added to the Polish fleet were Tor Chlpolbrok account. There is some evidence that all orDWTDWT freighters andDWT tankers built and on order ln Yugoslavia for Poland und Czechoslovakia wore and are for Chinese account. wo ships of the Polish fleet, believed to be Chlpolbrok ships, were "sold" to China andto the Chinese riag, one old (builtnd the other quite new (built.

The two old freighters transferred90 are still under the Chinese flag. The comparatively new freighter, the former ?'ryderyk Chopin, was subsequently transferred0 to theflag and la now the Orllk. This is the first known Instance or the transferhip from the Chinese flag to one of the European Bloc flags.

In9 the Czechoslovaks reported the formationew company, the Czechoslovak Ocean Shipping Company, an "international stock company.' Later9 the Poles transferred the Zeromski, also believed to havehlpolbrok ship, to the Czechoslovak flag, and It ls now the Orava. Both the Orava and the Or!Ik, as well as three other Czechoslovak ships, have Chinese crew members. Anothervessel, the Slapy, was delivered at Constanta lnailed for Whampoa, and has been In Chinese waters ever since. The Czechoslovak tanker Ostrava is employed in Uic Black 8ea-Chlna run and apparently carries little or no Czechoslovak cargo either way.

It ia highly probable, therefore, that at leant five andseven of the Czechoslovak ships,00 DWT, are at least under Chinese control if not Chinese ownership. When combined with the probable Chinese Interests in Polish flag vessels, the ships under Chinese coatrol or ownership amount to abouthips totalingWT.

Chinese-Polish Shipbrokcro Corporation.

D. Activities in West Africa

The calls of Bloc ships at West African portseflecting the intense interest of the Bloc in these emerging nations. Poland, which started regular liner service to West African ports latexpanded its service consistently. onth periodolish ships cadealls at West African ports, orercent more than during the came period Countries served9 were Morocco, the Canary Islands, Senegal, Guinea, Sierra Leone, Liberia, Ghana, Nigeria, and Gabon. wo more ports were added in Ghana and in the Canary Islands, and the first call was made at the Portuguese island of Sao Thome. Twenty-six percent of the calls were atMorocco, almost all by tramp ships. All but two calls at the other ports were by scheduled liners.

In the same sample period, Soviet ships madealls at West African portsix times as many calls aslmostercent were at Casablanca, Morocco. Other countries served were Guinea and Ghana.* The USSR took the opportunity afforded by0 calls to announce the opening of liner service, but the service was actually tramp in nature.

East Germany has been publicizing its intention to establish liner service to West Africa. Although no ships have yet beenon the route, the two refrigerator ships (banana0 from French owners probably will be assignedesturope run.

II. USSR

A. Growth of the Fleet

eliveries of new vessels to the Soviet maritime fleetev highWT. The highest figure previously attained0 DWT The new deliveries includedry cargo vessels and Ik tankers for the Ministry of the Maritime Fleetefrigerator vessels for the Ministry of the Fish Industry. The estimated value of these additions, based on world market prices, was0 million, an increase ofercent above the investment in shipping

All of the ships added0 were of new construction, and the majority were series-produced units competitive with new types from Western shipyards. Among the additions were seven classesfor the first time. The most important of these new classes

ln August, two ships called at the Congo, but none hus called uince.

were theDWT tanker withspeed ofnots, and theUT freighterpeed ofnots. In the second hair of the year the USSR took steps toward the acquisitionarger and faster tanker fleet.* These purchases reflect thecapabilities and intentions of the USSR to dispose of Its growing volume of surplus petroleum in export markets-

The sources and the estimated* costs of the ships added to the Soviet fleet0 are shown in Table 2.

Table 2

Sources and Costs of Additions to the Soviet Merchant Fleet

$)

Satellites

830

World

When comparedimilar tabulation these figures show that the tonnage purchased from the West increased Domestic production In the USSR accounted forercent of the total growth compared withercent AlthoughWT acquired in the European Satelliteslight incresstheir share of the total declined fromoercent.

After allowing for deletions rrom the fleet resulting from sinkings, retirements, and other causes, the net effect of the above additions plus the transferanker from the Caspian to the Black Sea fleet vas to Increase the Soviet maritime fleetesselsillion DWT9essels totalingillion DWT at the end- The large Input of new vessels also caused

iscussion of the acquisitions, see D,elow. M iU are shown in Tableppendix,elow.

the average age to dropo Ik years and produced favorable increases in the overage size and average speed of the ships ln the Soviet fleet.

B- Utilization of reign Shipping

As in previous years, the USSRreater volume of its our. seaborne trade, which increased bypercent the percentage share carried by foreign vessels (secncreasedercent, and for the first time6 the USSR failed to carry at least half of this trade.

Much of this increase in the use of foreign shippingesult of the increased trade in petroleum (see

Table 3

Exports of Petroleum from Soviet

Metric

nil

Soviet tankers

Sea ports

Satellite tankers

Free World tankers

S

Uil

spite of the substantial additions to the tanker fleet0light improvement in the utilization of thishe USSR has had to turn to foreign Shipping to carry the greater share of Its growing trade in petroleum. Tne major explanation for the increased utilization of foreign shipping appears, therefore, toeliberate choice of the USSR to use its own tankers on long-haul movements. This development is most apparent on the new

Appendix, p.elow.

K* When measured Uy tons of cargo carried per DWT available, theof the Soviet tantor fleet increasedons per DWTons per DWT

run to Cuba, on which Soviet tankers carried more than half ofillion tons of petroleum moved*

C. Pattern of Employment

In addition to the coastal and intercoastal movements of the Soviet maritime fleet, Soviet ships0 operated along theimportant routes:

of Origin

Baltic

Northern Black Sea

Horth Sea and Atlantic Europe Worth and West Africa South and Southeast Asia Caribbean and Canada

Baltic Sea,^Atlantic Europe, and Mediterranean

Mediterranean Continental Europe South and Southeast Asia Far East West Africa Caribbean

East

Caribbean and Canada

Atlantic Europe

South and Southeast Asia

The most significant change in the employment of the Soviet maritime fleet0 was the diversion of large numbers of tankers and dry cargo vessels to the expanding Cuba trade. The USSR exported no petroleum to Cubaut0 it exportedillion tons. Exports to Cuba of dry cargoes such as grains, fertilizers, and farm machinery, which were negligiblemounted toons eturn movement, Soviet imports of sugar amounted to* million tons comparedons To facilitate the movement of dry cargoes, regular service by Soviet ships was initiated between the Soviet Baltic and Cuba- Considerable trade also was carried between Cuba and

* For further discussion of Soviet-Cuban trade, see C, below.

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Soviet porta In the Far Eastern and Black Sea Basins. Although the USSR attempted to carry this trade with Cuba, ths volume of cargo wus so large that more than half moved on foreign ships. Probably all of the dry cargo exports to Cuba moved on Soviet ships, butercent of the petroleum exports and probably more thanercent of the Imports of sugar moved on foreign ships.

Another important change in the pattern or Soviet petroleum movements was initiation of petroleum deliveries from the Baltic port of Klaipeda to consumers along the Baltic. Deliveries of Soviet petroleum to Denmark fron Black Sea ports ceased entirelynd deliveries to Norway, Sweden, and East Germany declined- These reductions, which in the case of Sweden amountedons, are due in part at least to the beginning of shipments from Klaipeda, which reached an estimated volume ofillion tonsO-

Tn other developments the USSR also Opened regular service by Soviet freighters to West African ports in Ghana and Guinea- The USSR and shipping companies in France and West Germany entered into new Joint shipping agreements, patterned after an existing agreement signedritish firm The French agreement between the Companie Generale Transatlantique and the Baltic Steamship Company calls for each company to supply one small motor freighterWT for service between the Soviet portsningrad, Riga, and Klaipeda and the French ports of Rouen, Dunkirk, and Le Havre. The West German agreement, between the Horn and Dischoff Lines of Hamburg and the Baltic Steamship Company, provides for service between the same Baltic ports and the West German ports of Lueheck, Bremen, and Hamburg.

D- Expansion of the Tanker Fleet

Through the middleoviet acquisitions of tankers under the Seven Year Han consisted of tankers up0 DWT from Bloc shipyards andWT tankers, primarily Finnish, from non-Bloc shipyards. During the second half0 the USSR turned to non-Bloc yards to purchase large and last tankers ranging00 DWT. These were the first tankers of moreWT purchased from non-Bloc yards Three tankers totalingWT were purchasedwo from Japan and one from the Netherlands. All indications are that this shift in the pattern of acquisitions of tankers will continue at least By the end of1 the USSH hadDW? tanker from Yugoslavia and had made known contracts forther large tankers,WT tanker fromDWT tanker from the Netherlands,DWT tankers from Japan, andDWT tankers from Yugoslavia.

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Active negotiation* are now being carried on for the purchase ifdditional tankers, as shown in the following tabulation:

Tonnage

addition to this intensified program for the acoulsltionarge, competitive tanker fleet of supertanker characteristics, the USSR also isignificant program for the domestic production of large tankers. Ute0 the USSR announced that it will begin production1 of the Sofiya, the firstlass of tankers intended to supersede the Soviet-built Pekin-class tanker. The new tankers, which will have steam-turbine drive, will be capable or speeds of aboutnots and be able to0 tons of cargo.

E- I-65

Deliveries of ships to the Soviet fleet1 mayew high of moreWT and will igherof modern competitive vessels than Production of the outmoded Kazbek tankers probably will, be cut back ne productionew classDWT gas turbine tanker iu begun in Leningrad. New deliveries will include the first of three fast Japanese-built freighters0 DWT.

The USSR will continue to purchase large tankers from abroad. One large tanker was purchased From Yugoolavia Inurther deliveries of tankers anticipatedlecond tanker from Yugoslavia,DWT tankers Tron Poland, and at least one tanker each from Italy and the Netherlands.

Disproportionate increases in announced plans for the volume of shipments and ton-aile performancerend towardincreases in the average length of haul,oviet intention to increase the role of its maritime fleet in the carriage of seaborne foreign trade. The expansion of Soviet carriage of its

-

s

own trade will, take several forms. The volume of cargo to be exported to Cuba is planned to double. percent increase is planned for exports of timber, which totaledillion tonsith some timber from the Soviet Far East to be shipped as far as the UK and East Germany. At the came time, scheduled line operations by Soviet vessels from the Block Sea to ports in Pakistan, India, Ceylon, and Burma will be increased, and new lines will be opened to Sudan and Costa Rica-

The increasing carriage of foreign trade cargoes on longer routes is having the effect of disrupting original Soviet plan targets for the Seven Year Plan. On the basis of performance8 and planst now appears that the5 plan goals for the volume of shipments will be underfulfilled while the goals for ton-mile performance will be substantially exceeded.

Soviet prospects for the fulfillment of the announced Seven Year Plan goal to double the size of the maritime fleet are excellent, but the plan for expansion of the dry cargo fleet will not be fulfilled. If tankers currently known to have been contracted for are delivered, the tanker fleet, which was planned to increase its capacityill actually have increased itercent.

III. European Satellites

A. Growth of the Fleets

1- General

The increase ofercent0 ln the aggregatetonnage of the merchant fleets of the European Satellitesa slight decline from the rate of increase On the basis of the plans5ombined fleet ofillion DWT, it is apparent that the rate of increase will continue to decline. The absolute net amounts added each year, however, have been increasing andew highWT0 (see Table It is expected that the volume of additions will continue at about this level for theears. 4 the volume Of additions should decrease sharply, or the plan targets5 may be adjusted upward, as was done by both Poland and East Germany in previous Five Year Plan periods-

Acquisitions0 were almost exclusively dry cargo vessels. f thehips added (net) during the year were tankers. As was to be expected, Poland achieved the largest net

* Appendix,elow.

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increase in tonnage, but each Of the other Satellites except Albania sieved large Increases in relation to total tonnage. The following tabulation showy the net increases in fleet capacities

East

The addition of four new ships0 EMT to the Rumanian fleet was the first expansion of this fleet The launching in Yugoslavia in0DWT dry cargo freighter, the first of two for Rumanian account, portends further expansion and modernization of this aged fleet. The purchase by Bul-garia of its first large tanker was its first acquisition6hip of more0 DWT.

Sources and Costs of Added Tonnage

pattern of acquisitions by the European Satellites0 shows an increase in the purchase of secondhand shipseduced reliance on non-Bloc yards for newly built ships. With one exception, all of the secondhand dry cargo ships were purchased from the West. The three tankers added to the Satellite fleets0 were all secondhand purchases from the West.

Only percc shour

Purchases of secondhand ships accounted for al percent of the additions Lo the tonnage of the Satellite fleets0 coo-pared with onlyercent Hew ships from BloC shipyards edercent of the tonnage compared withercentercent were new ships from Western yards compared withok?^i Details ol* acquisition by each Satellite country are

r-.uropean Satellites of additions to their million, orercent above the costs ln

U follows on.

Table 'i

Sources and Costs of Additions to the Merchant Fleets of the European0

Newly Built Ships

Secondhand From Bloc From

Thousand Deadweight Tons

East

b/

Total

Million US $

East

a^ Including one salvaged ship0 DWT at an estimated salvage cost ofillion.

one ship sold by Communist China toOrlik, which originally was the Polish Fryderyk Chopinsale to China Although the purchase price3 million based on the world market, it ismuch IT any money changed hands. The Orlik probubly hasassigned to the Czechoslovak fleet but is still ownedin much the same fashion as is believed to be the caseChlpolbrok ships under the Polish flag- '

of rounding, components may not add to the totals shown-

costs of ships built in Bloc yards representat prices prevailing at those Western shipyards whosebelieved to be roost comparable with those at Bloc shipyards.

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3- Fleet Characteristics

Aa shown in Tablenly the Czechoslovak, Rumanian, and Albanian fleets declined0 in terms of average size, andthe average size of all other fleets increased slightly, the average size of the combined fleets of the European Satellitesslightly0WT. Average ages of the East German, Czechoslovak, and Bulgarian fleets increasedesult of purchases of secondhand ships. The average age of the combined fleets, however, was reduced7 years Although the Rumanian fleet decreased its average age4 yearst isery old fleet compared with the world average of aboutears. Average speeds of those fleets that acquired smaller or older ships0 declined, but the average speed of the combined fleets increased2 knots The average world speed is betweenndnots.

Table 5

Characteristics of the Merchant Fleets of the European Satellites

AverageAge Average Speed

(Deadweight

East

.:'

Total

*

Including only shipsUT and above.

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3. Performance'

Performance In ton-miles of the Satellite fleets, including ships OfRT, increasedpercent0 compared with an increaseercenthe lover rate ofesult of two major factors: (l) additions to the fleets of small ships trading in the short-haul routeshe carriage of more short-haul interport cargo by ships in the long-haul routes.

C- Utilization of Foreign Shipping

0 the increased cargo-carrying capacities of the Satellite fleets madepercent increase in the volume of seaborne foreign trade that Satellite countries were able to move on their own vessels. ** But at the same time an increase ofercent in total seaborne foreign trade0 meant that the use of foreign shipping remained at virtually the same high level as Only Bulgaria carried enough additional cargo in ita own ships to decrease the amount of seaborne foreign trade left for foreign shipping.

The Satellite countries utilized foreign flag shipping to7 million tons of foreign trade cargo With the exception of the use of Polish shipping services, there wereew instances when the Satellite countries used each other's fleets to move this trade. Polish ships are estimated toons of East Germanillion tons of Czechoslovakandons for other Satellites.

In addition,0 tons of cargo moving in inter-Satellite foreign trade or in Satellite trade with non-Bloc countries were carried on Soviet ships. Soviet ships probably also carriedons of East German-Sovietons of Polish-Soviet trade,illion tons of trade between the USSR and Rumania, Bulgaria, and Albania.

More thanillion tons of7 million tons ofseaborne trade carried0 by foreign ships probably were carried in non-Bloc ships. Comparable datandicated that aboutillion tons of Satellite trade were carried in non-Bloc

ships.

Seeppendix,elow. See Tableppendix, Plans called Tor Polish ships to carryercent ofseaborne trade, which would have5 million tons, but it is doubtful that this goal was achleved-

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Polish trade accounts for aboutercent of the seaborne trade of the European Satellites and more thanercent or the seaborne trade of the entire Sino-Soviet Bloc. Polish ships are still carrying only aboutercent or Polish trade, leaving more thanillion tons to be carried by foreign ships, almost all non-Bloc ships. Only the USSR surpassed this volume3 million tons carried by foreign ships, again almost all in non-Bloc ships.

D- Other Developments* 1. Poland

By the endll Polish maritime plans for thead been exceeded. Tonnage added to the fleet (not including Chlpolbrok ships) wasercent above plan, and the volume of cargo handled in the ports wasercent above plan. Czechoslovak and East German transit through Polish ports increased considerablyut the largest increase was in Polish foreign trade. Theillion tone of cargo handled in Polish ports0 already exceeds the long-range port plan to handleillion tons

Poland route, cone route

ndia placed its first ships on the India-

!. The original agreement between India and Poland was

ludedroviding for three ships of each flag on the Poland, sometimes using chartered ships, did in feet start India service, but no Ship was ever assigned by India. ew agreement was signed, providing for one Polish and one Indian ship sa'.ling each month. By the end India had placed two ships on the run.

The ships on the Poland-US Gulf line0 added davana, Cuba,ort of call on the westbound leg. Poland now has four freighters on this route in addition to four others on the Poland-US Atlantic Coast line. The first Ship to Call at Havanaons of Czechoslovak cargo in

olish Ocean Lines hadhips, most of them inCO-DWT class, on the South America route. In September an express service was announced, to be servedf thehips,uaranteed uniform speed ofonots. At least two of these ships will be newly built vessels acquiredanish

Certain developments concerning operations of the East German, Czechoslovak, and Polish fleets are discussed in I, B, p.bove and I, C, p. above.

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shipyard9 Rio de Jsr.lerolanned to be the only discharge port, but cargo is to be loaded for the return trip in Rio, Santos, Montevideo, and Buenos Aires.

The small fishing port of Kolobr?.eg uas opened in0 for foreign trade cargo. 'Ihe porl is designed to handle small shipsWT) for the coastal and Baltic service. To date, the export cargo has consisted almost entirely of coal, but there are plans to increase the general cargo capacity- By the end of December, probably not moreons hud been handled in the port-

2. East Germany

In0 the first East German ship called at Rangoon, and inegularly scheduled service between Rangoon and the OK/European Continent and East German ports was advertised."

TheWT)oyage to South America late9 and has stayed on that route0 andpparently the beginning of regular service by East Germany to South America. This chip initially called at Brazilian ports only but later expanded the route tc Buenos Aires and

The two French refrigerator ships {banana bouts)by East Germany0 and still outfitting in Antwerpare destined for the West Africa route. Although intentions to serve both West Africa and South America have been repeatedly publicized for the past year or two, these will be the first Bast German ships assigned to West African Service.

Tn September, one cf the two Soviet-built East GermanWf) was switched from its regular Black Sea or Albania to Wismar route and sent from the Black Sea.-to Cuba with Soviet petroleum- In October the Second of the Soviet-built tankers also entered the Black Sea to Cuba trade, and it was reported that both were on lime charter lo the USSR, lnl, however, both were back on the Blacko Wismar route. In the meantime, two more tankers of the sane type were on order for East Germany in Soviet yards. Although one of these tankers was launchedpparently it has been placed In Uie Soviet 1'lect, and it is nowthat the USSK has postponed further deliveries of tankers to East Germany,

- :9

II Mi

The newly constructed Pctersdorf harbor at Rostock was opened to traffic in0 amid predictionsons would bc handled at Pctersdorf by the end Actuallyons were handled owever, the new port area should expand to allow moreill ion tons to be handled in Rostock compared with lessillion tons

E. Prospects1

Jt is expected that all Satellite fleets will increase again1 and that the combined tonnage may beillion DWT, including aboutankers totaling moreWT. Poland and East Germany probably will gain the most tonnage. Hungary may acquire its first large shipsumania should receive the first of theWT freighters on order in Yugoslavia; and Bulgaria plans to double its fleet capacity above thathe first of theDWT tankers, launched lnhould be delivered to the lolish fleet-

Although fleet performancesexpected to Increase, it

is believed that the volume ofwill again rise ln

proportion. here mayillion tonsforeign ships.

IV. CogBBunist Far East

A. General

Developments in merchant shipping in the Communist Far East0 showed no marked changes 3oth North Korea and Korth Vietnam continued to operate only with Ships of lessRT, although North Korea recentlyon freighter. The combined performance of the fleets of North Korea and Northcontinued to be lessercent of the performance of the Chinese Communist Fleet (see Table ecline in the rate ofof China's fleet performance and fleet growth reflected the serious economic problems experienced The anticipated venture of the Chinese Communists into international0 also failed to materialize.

Many operating problems continue to harass the Chinesemerchant fleet. Shortage of fuel husecurring problem, probably greater0 than in preceding years- Congestion of harbors was less frequent than usual, and no reports of port congestion were noted until late in December Some progress also was noted

" ollows on

-

Table 6

Estimated Performance of the Merchant Fleets of the Communist Far East

Countrv

Q 9

Metric Tons Carried

China

0

7 8

Korea

7 6

Ton-Miles b/

China cj North Korea North Vietnam

9 o

0 0 8

8

These figures include performance of chartered Free World ships in Communist China's coastal trade. Figures for North Korea include inland water traffic. For the first time it has beento break down the performance of North Vietnam and to remove the inland water performance figures. Data are not available for North Vietnam on metric tons of cargo carried-

autical, miles.

are rounded to theillion metric tenmiles.

in improving coordination among shippers, railroads, and the merchant fleet. It is believed, however, that the Chinese failed to fulfill the performance plan for their merchant fleet. It ls estimated that water transport performance Increased0 by aboutercent, but this increase is assumed to apply equally to coastal and inland water transport and is considerably short of the plannedercent for these modes of transport-

-

3. Communist China

1. Growth of the Fleet

At the end0 the merchant fleet of Communist China included iVf ships totalingWT. Additions to the fl'et continued to be predominantly general cargo ships, andf thehipso the fleet0anker.* By Jie end of the year, however, the Chinese were engaged actively in negotiations to acquire more tankers.

The acquisitions0 resulted in an increase in the fleet capacity ofercent compared with an increase ofercent This smaller increase indicated that the Chinese fell behind in their attempt to achieve an announced fleet goalillion DWT If this goal is to be attained, the fleet would be expected to expandate oferccnt annually between the end9 and the end

Additions to the fleet0 cost Communist China an amount estimatedillion. illion of this total represented the cost of building seven ships0 DWT inyards. The5 million constituted the estimated cost to China ofhipsWT purchased from non-Bloc In addition, China received one ship from Poland and transferred one to Czechoslovakia, but details of the transactions are not known.

Acquisitions0 continued to be from both Bloc and non-Bloc sources (see In examiningt must be kept in mind67 were years of slow growth or the fleet andere years Of rapid growth.

Additions to the fleet from domestic production declined0 because of the announced inability of the Chinese to complete the outfitting of vessels under construction, but,domestic production has continued to be an important source of additions to the fleet. In theears, however, aboutercent of the additions to the merchant fleet of Communist China were purchases from the West. Such purchases increased sharplyccounting forercent of new additions compared with onlyercentn almost every case these secondhand ships were more thanears old. Tn the present depressed world market the Chinese probably have found it as cheap to purchase these ships as it would be to charter

Net additions to the fleet werehips. One ship was transferred to Czechoslovakiaollows on

-

3 yeare- ,ercent of the capacity of the Chinese fleet has been purchased from Lhe West. This reliance will continue for several years if the Chinese hope to attain their eoals planned Negotiations for the purchaS ot add?

nd at the end of ?he year

the Chinese uere negotiating Tor large tankers for the first time

2. Utilization of Foreign Shipping

^Pendcnce of Communist China on foreign merchant

snip, to move its seaborne cargo remained high The assi

. assign-

ment to the coastal trade of the new ships added to the fleet0

trade compared withercent In spite of this improved

atillion tons of cargo in the coastal trade,same volume as chartered ships moved in

bhe Chinese remained completely reliant on

nternation^ seaborne trade, uhich Thu, the Chinese

utilized chartered ships tootal ofillion tons ofcargo

atter for some Surprise uas the failure of Communist China to make an initial venture into International shipping services with ships flying the Chinese flag. "Ihis failure may bTeiplalSTin Wirt by the inability of China to complete the outfitting of ships

Snents ^ ^ i gat ionsome of these ships have been waiting for moreears

to be outfitted. Until these bottlenecks are eliminated, the Chines will remain highly dependent on chartered shipping.

3- Prospectsl

1 and

Although the Chinese fleet will continue to expf to xnprove in qualityncreased reliance on foreign shipping in likely. The best growth that the Chinese Coarnuni^ts have beer, able to achieve thus far wasWT9 Although this record may be surpassedI, the rate or growth

P^Koff clw "he icVeL nccde*'

f2rCf additions to the fleetjol will oe purchases from the West. The fleet at the end1

would be about adequate for the coastal trade were it not for the Chinese Nationalist control of the Formosa Strait. Until theaeare eliminated, the Chinese Communists Mill be Torced to utilize some Western shipping in the coastal trade. If negotiationsl for the purchase of large tankers, they probably will be used to transport petroleum to China from distant areas such as the Middle East and the Black Sea. It would be expected that these tankers would fly the flag of Communist China, but they may be registered In the fleet of another Bloc country as apparently come Chinese ships are at present.

An increased involvement of foreign shipping in Chinese Communist trade can be expectedl, and, based on the first quarter activity, the participation of Free World shipping will increase while Bloc shipping probably willecline. The major portion of the Increase in shipping will result from Australian and Canadian shipments of grain which are being transported primarily in Free World ships under charter to the Chinese. It is estimated that shipments of grain to China by sea1 will amountillion tons which will requireeliveries0 tons.

- y> -

bi.,k}

|

iiiiJ

I|

j

i

HI

St

m'ln 5ljK| I

3

i

52

lijiBI t

, 1

Table 9

Seaborne Foreign Trade of

Thousand Metric Tons

Estimated

7 8

European Satellites a/

Poland

ships Foreign ships

Germany

German chips Foreign ships

ships Foreign ships

ships Foreign ships

490

699

409

ships Foreign ships

ships Foreign Bhlpe

805

935

800

925

ships Foreign shins

445

470

630

700

600

Tmblc 9

Seaborne Foreign Trade of the Sino-SovietContinued)

Thousand Metric Tons

i960

duplication of trade between the Satellites

ships Foreign ships

ships Foreign ships

Soviet Bloc

duplication between the USSR and the Satellites b/

2

r132

ships Foreign ships

China

v,

ships Foreign ships

N.A.

N.A.

Sino-Soviet Bloc

duplication between

China and the Soviet Bloc cj

A.

ships

ships d/

31

f t

Table 9

Seaborne Foreign Trade or the Slno-SovietContinued)

a- Polish data arc all from official Polish publications, with0

estimate based on resultsonths. The total seaborne trade

AnZl "SaS?"? OV?kJB,and Bulearlaofficial published

figures. East German total trade haa been estimated on known transit trade through several European and Bloc ports. All other trade data have been estimated from varied and random indicators, with Rumanian trade data the

SVff thJhe excePtionis*Bulgarian data, which are from official publications, the amounts carried by Satellite ships are estimated from total fleet performances.

figures are estimates based generally on piecemealweakest facet is trade between Rumania, Bulgarie, and the USSR movingBlack Sea, for which there arc virtually no data except generalinformation. Consequently these estimates may be high or low byas 25

esult of either published information onmoving between China and each European Bloc country orknown Shipments. The estimates may be as much asercent low.

<t. These amounts of cargo shown as shipped on "foreign" ships ineludr? cargo carried by Bloc ships for other Bloc members. No compilation has been possiblehlp-by-ship basis, but judgingew publishedon Polish performance and scattered indicators on other fleets, as muchillionillion tons of theillion carried by foreign ships0 were carried by Bloc ships.

-

Table 10

Estimated Performance of tlie Merchant Fleets Of tile European

b

Thousand Metric Tons Carried

Poland

East

Million Ton-Miles e/

Poland

EuSt

Including performance of ships of lessRT. b. In nost cases, estimates are based on published dataortion of the year, with the rest of the year being estimated on the basis of the ships added and routes sailed. For those countries which published no performance data, the estimate for the entire year was based on prior performance and the growth of the fleet, e. Including cargo carried by the Polish ships assigned to the Chinese-Polish Shipbrokers Corporation.

d. Estimated on the basis of the fleet ln operation, performance of tne ships in prior years, and announced performanceonths

ir. Metricautical miles.

i !

I I

t isr|[

t 1

. IS jj

| li

fe|hllft|fcl||f

Table 11

Merchant Fleets of the European Satellites, by Type, Number, and Tonnage a/

5 (Continued)

?

and Type of ST.io

1

c/

^

-y

j

?

,-

cargo

cargo

3

Satellites

'

cargo

"

Includes only snipsnd above and including supply Ships for lhe fishing fleets- For the yearsI'W

Anr.ual Review,BMAnnual Review of Morcftant Shipping Ir. the SECHET.

on known nc^uisilions and losses.

based on puollshed plan data-

Original document.

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