Athens, Singapore, Houston: Held at maritime hubs around the world, the Shipowners Forum organised by TradeWinds magazine is a constant for the international shipping community. For the first time the event took place at SMM in Hamburg – and it immediately set new standards. In two high-profile panel discussions, participants explored the themes “Germany’s New Dawn” and “Global Ambition”. "While markets are recovering slowly, they must face new challenges – not only in terms of digital technologies but also as a result of stricter fuel and emission regulations," said TradeWinds editor-in-chief Julian Bray, who hosted the event and opened the discussion with a conversation with IMO Secretary-General Kitack Lim.
The participants of the first expert panel explained the strategies their respective companies are pursuing. Nicolaus Bunnemann, CEO of Atlantic Lloyd, stressed the importance of "promoting the German shipping cluster", which includes coordinating all activities so as to achieve the greatest benefits for the future. He expressed his conviction that “it is not the number of ships that makes the difference but the financial basis." Alexander Oetker, CEO of A O Schifffahrt, emphasised his commitment to Hamburg as a fantastic place to run a shipping business. "The more you want to grow, the more solid your roots must be." Growth, if not necessarily organic growth, is also a core concern for Zeaborn CEO Isabelle Rickmers: "Consolidation continues to be one of the top issues for the industry, and we want to contribute actively." For ship managers to remain competitive in the global markets, size is crucial, she added.
Hanse Ship Management (HSM) has chosen a different approach, reported Arnd Becker, the chairman of a conglomerate of 13 shipowning companies which manages roughly 90 vessels. He maintained that financing was still a critical concern: "Trust in our industry has waned considerably."
On the other hand, he said, his group had succeeded in attracting private equity capital from East Asia. Strong partners in finance are indispensable, agreed Maritime Asset Management Specialist Jan Hagemann who said that a true sense of anticipation had not yet arisen. The industry had undergone several waves of refinancing but failed to restructure its financing system, the CEO of Five Oceans stated. Christian Oldendorff, the owner of Oldendorff Overseas Investments,
perceives promising opportunities among well-to-do private investors. A positive signal, he said, was the fact that “investors are encouraging us to professionalise our approach." The more efficient the structures, the more attractive they will be to investors, he remarked.
Fair sharing of costs
Facing declining cargo rates and increasing bunker costs, liner companies have been hit hard by the complex market situation, as Hapag Lloyd CEO Rolf Habben-Jansen explained. The entire line segment had failed to see any return on capital employed between 2011 and 2018, he deplored. Only major players, such as Hapag-Lloyd, had done somewhat better. The new environmental regulations represent an additional burden that should not be underestimated, he added: "2020, that is practically tomorrow; from October 2019 we must begin bunkering new fuels." However, since low-sulphur fuels cost $250 more per tonne, his company will have to bear added costs of $1 billion per year. Considering the fact that the number of LNG-ready vessels remained low, and only a small portion of the global fleet would be equipped with scrubbers by 2020, it is important for the industry to develop a fair and transparent mechanism for absorbing the added costs, Habben-Jansen urged.
During the second panel discussion, George Hulse, CEO of the shipbroker Howe Robinson Partners, addressed another fundamental issue: irrationality in the markets. For example, referring to Asia he said it was difficult for private companies to compete with national corporations. In addition, robotics and 3D printing might well change the flow of goods. "Consolidation has not ended yet," said Hulse. A market segment where Zeaborn Ship Management is active. CEO Nils Aden said: "Our goal as a global third-party ship manager is to transform change into benefits for our customers. Size is only one factor in this scenario." The discipline most likely to profit from digitalisation, he said, is fleet management. With markets remaining highly competitive, the driving force over the next decades is going to be innovation, added Knut Ørbeck-Nilssen, CEO of the consulting firm and classification society DNV GL-Maritime. Digitalisation and machine learning offer enormous opportunities, he said. On the other hand, it is important to pay close attention to risks, such as cybersecurity.
“The best way to create added value lies in cooperation," said Jon Key, Director Strategy, Innovation & Transformation at V.Group, a leading ship management company. Crossing borders to learn from other industries and striving to become more efficient is the right way to proceed, he said: "The only ones holding us back are we ourselves." Apart from collaboration, diversity and engaging young talents are keys to success because including a variety of perspectives would lead to better solutions, he said. Philipp Wünschmann, Head of Shipping at Berenberg Bank, indicated that worries about a potential escalation of trade wars were exaggerated. What he has observed among his customers, he said, are "primarily discussions about future issues." Speaking about opportunities, he indicated, is more likely to attract investors then reiterating bad news about the shipping crisis.
The panel discussions were complemented by expert market assessments: Clarkson’s Research’s Stephen Gordon gave a report about shipping markets. At the time of the last SMM, the industry had reached the bottom of the downturn and the lowest newbuilding orderbook. In the meantime the market has recovered moderately, he said, with the order book standing at 568 ships worth $36.5 billion. "We have to congratulate the European shipyards," Gordon said. By focusing on cruise ships they succeeded in attracting a major portion of the orderbook in this segment. In the container segment, supply and demand appear to be in balance now, he added.
As the event drew to a close, Alexandre Tavazzi from the Swiss private bank Pictet presented an economic outlook. He had a positive message for the conference attendees: While the current situation was exceptionally unstable because of the unpredictability of the policies of US President Trump, even an aggravating trade conflict would have a limited impact on global growth, he said. Despite the debt crisis in emerging markets and Italy’s budget problems, "The corporate world is doing just fine. We are expecting solid growth for the global economy."
Packed with expertise and fascinating discussions, the TradeWinds Shipowners Forum has had an impressive debut at SMM.
To find out more about the TradeWinds Shipowners Forum go here.
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The leading international maritime trade fair takes place at the Hamburg Messe und Congress fair complex every two years. With roughly 2,300 exhibitors from 69 nations, and 50,000 visitors from more than 120 countries, SMM is the world's most important event of the maritime industry. It covers the entire value chain of the maritime sector, bringing together international decision-makers and experts and providing a platform for highlighting innovative technology.
The 2018 fair takes place from 4 to 7 September, once again under the honorary patronage of German chancellor Dr. Angela Merkel.