An added, and equally important, reason is that, in vertically integrated operations, ocean transport can be used for transfer pricing with respect to freight costs by which a corporation can minimize its tax payments. Control also can be exercised through long-term charters and contracts of affreightment, and arrangements with closely related parties can easily provide (covertly, if not overtly) for participation in the profits and for advantageous transfer pricing. In fact, a transnational corporation may achieve the same results by negotiating privately with independent shipowners, especially if it uses open-registry ships whose owners reside outside the jurisdiction of the flag states and are not subject to substantial reporting requirements. It may even be to the advantage of a corporation to use an independent vessel, or one which appears to be independent, rather than a company-owned vessel, in order to avoid allegations of misuse of transfer pricing. The use of independent shipowners also gives transnational corporations greater flexibility in dealing with irregular shipments.