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Monday, September 24, 2018

Realising the true value of the shipping industry will engender a new respect

Nor-Shipping’s new-style opening with a ceremony and a conference drew record crowds earlier this month in Oslo. Hardly surprising, perhaps, given that delegates were addressed by top executives from three world-class owners (Teekay, World-Wide, Wilh. Wilhelmsen), an oil major (BP Shipping) and a shipbuilder (Aker Yards), as well as by three top-ranking politicians from Singapore, Oslo and from Brussels. 

It was the freshness and vitality of his presentation that made the words of one of the youngest speakers present stand out. Andreas Sohmen Pao,Managing Director of World-Wide Shipping andDeputy Chairman of Bergesen d.y., was determined to convince his audience of the desirability of restoring shipping as a respected, leading world industry, and of the need to take advantage of the shipping industry’s renewed strength and sparkle to structure a sustainable future before the next downturn in the inexorable rates cycle drains executive drive as well as company bank accounts. 

"Creating world-scale companies is in part about generating value beyond the cost of the fixed assets," he said, a premium that historically has been lacking in shipping. One reason for valuations close to the steel value is that the industry is not putting enough emphasis on the “soft elements” which create this premium, he continued. In other words people and perceptions – a premium sometimes referred to as goodwill, brand equity or intellectual capital. "Put another way, unless we can persuade people of shipping’s value, it is hard to attract investors and bring the best talent to our industry. And if we don’t have the best people, we have much less chance of creating value beyond the steel."

He went on to emphasise the commercial efficiency and cost-effectiveness of shipping – both part of the great story the shipping industry has to tell. It's not very different from the story that was being told in the 'old days' when shipping was perceived as something praiseworthy, something indispensable, something almost romantic. The difference is that today most people hardly ever see ships and ports; barely realise just how much their everyday lives depend on shipping; rarely express or read an opinion about shipping unless it is in the aftermath of a major accident. And so there is much more need for this story to be told – and the volume needs to be turned up higher. 

He also talked about taking more responsibility for shaping our own image, about reaching all potential stakeholders by any effective means, about “understanding perceptions better so that we can tackle real problems rather than imagined ones”. Moreover he emphasised that we should be making just as much of an effort to reach out to young people as we do in reaching out to customers and regulators, pointing to Singapore’s efforts to attract the young to shipping through dedicated maritime courses, subsidised training, fun shipping events and competitions. 

Sohmen Pao’s father emphasised the need for dialogue when he spoke last month at BIMCO’s centenary celebrations. The son showed the industry something of what that dialogue should contain. 

Contact: Bill Box