The process of shipping involves numerous calculations, combinations, and approvals. Tonnage is one such metric that helps ensure safety and smoothness in shipping. What is Tonnage in Shipping? Tonnage in shipping is the carrying capacity of the ship measured in terms of volume or weight. The word 'tonnage' is derived from the practice of levying dues on ships. These dues were collected based on 'tons' that a vessel could accommodate. In the past, the tonnage was calculated based on the ship's internal volume. But today, the measurement procedure has changed to a system where the cargo's weight is considered the unit of measurement. Ton is the standard unit of measure for this capacity. Although the technical definition of tonnage has changed several times, it is usually expressed in terms of weight or volume. To sum up, tonnage in shipping is the total number of tons registered or the total carrying capacity of the ship. Who Issues International Tonnage Certificates in Shipping? Manning regulations, registration fees, port dues calculation, and safety rules are devised based on the tonnage of ships. All ships should have an International Tonnage Certificate (ITC), which is issued by the flag states in consultation with the Tonnage Measurement of Ships 1969 and the International Maritime Organization (IMO) International Convention. The vessel's certificate society carries out the required calculations before delivery. It also issues the certificate on behalf of the flag state. Even though the certification has an expiry date, it has to be amended in the case of changes in the vessel's framework. What is Tonnage Tax in Shipping? Tonnage tax is a taxing method levied on shipping companies instead of conventional corporate taxation. The tax amount is usually less than the traditional government taxes and, therefore, is often considered one of the leading maritime subsidies offered by the government in recent times. The tax is levied based on the total tonnage value of the entire fleet of vessels under the operation of a single enterprise. Another upside of this taxation mechanism is that it is not dependent on the profit of the company and the volume of the total shipments, making it easy and convenient for shipping companies and authorities to calculate tax. For example, it doesn’t matter if the freight is carrying its total capacity of 500 Kg of load; the tonnage will remain the same.