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Friday, October 19, 2018

Sea Asia 2007's keynote session considers the Asian voice in world shipping and concludes that if you want to be heard then you have to speak up

The first Sea Asia conference held this week in Singapore fielded an impressive panel of high level speakers for its keynote addresses and as keynote panellists. As they considered the Asian voice in world shipping, they examined the issues that matter to Asian maritime players.


Dr Sun Jiakang, Managing Director of Cosco Container Lines, gave a run-down of the container ship markets, pointing in particular to how market tonnage supply has been kept tight by longer voyages to and from the emerging markets using up part of the excess vessel capacity. In addition, more heavily-loaded containers means that vessel TEU capacity is not fully used. The combination of both these factors has meant that more vessels have to be deployed to maintain punctual schedules.


Captain Takao Manji, Senior Managing Director at NYK Line, opened with a combative statement bemoaning the fact that Asian ship owners are forced to follow regulations which are not necessarily in their interest, as the developed nations outside Asia take the lead on the regulatory front.

He went on to encourage the industry to join NYK in 'thinking out of the box' to find a solution to attract the manpower of the future. Training to be a seafarer does not attract the young, said Manji, because of absence from home, financial factors and a relatively slow career path that means 8-10 years to become a master or chief engineer. Standardisation of ship design would be one road worth following, he believes, as well as backing more specialised training academies, as NYK is doing in the Philippines – NYK crews are now nearly three quarters Filipino, he said.


Douglas Hsu, Chairman of Taiwan, China's U-Ming Transport Corporation and Far Eastern Group, examined the newbuilding order book, boosted by China's recent increases in efficiency which have seen construction time for a capesize reduce from 13 to 9 months, and has seen deliveries on time or even early. He asked whether the size and nature of the current orderbook (which is being boosted by new companies taking orders for ship yards that are not yet built) means facing a global mismatch in supply and demand, or whether the dynamism of the Asian economies and phase-out of single hull tankers will keep the markets in balance. Panellist Andreas Sohmen-Pao, Managing Director of BW Shipping, responded with a warning that there is a history of the industry being surprised by unexpected and/or political events which create an upturn or a downturn, and that we should not count on the current positive influences lasting for ever.


Jong-Chul Lee, President and CEO of STX PanOcean, wondered whether newbuilding prices will remain high on the back of fat orderbooks and strong demand, or whether increased competition from capacity expansion will lead to a softening. His unambiguous response was that as long as Chinese demand continues, newbuilding prices will remain high. Despite extremely low levels of demolition, he expects high prices to continue until 2012. This opinion was backed by Sohmen-Pao – at least for 'the next few years'. However the BW Shipping MD expects that any sign of increased yard capacity and thinner orderbooks would lead to 'give' in prices – although the existence of lower prices would encourage those holding cash to invest it, which would slow the fall.


Frederick Tsao, Chairman of the IMC Pan Asia Alliance Group, believes that we have an exciting ride ahead of us and that with finance always on offer where there is growth, the shipping industry can 'get ready to rock and roll'. Sohmen-Pao agreed that cheap money is a wonderful thing, but added, quoting billionaire investor Warren Buffet, that while we are partying like Cinderella at the ball, making the fun last as long as possible, our clock has no hands. We will get no warning when the party stops.


SS Teo, Managing Director of Pacific International Lines, discussed the effect of supersized container ships on the box trades and the effect of Panama Canal expansion. There are 160 Very Large Container Ships on order, he pointed out, but when the market comes down, these massive ships will be inflexible when it comes to redeployment, he believes.


Yudhishthir Khatau, Managing Director of India's Varun Shipping, and President of the Indian National Ship Owners' Association, emphasised the shortage of quality seafarers, asking whether the capacity for manpower training is adequate to meet the needs of an expanding industry. He believes that the infrastructure is there to turn out 5,000 officers every year, but that the problem is lack of facilities for training at sea. He asked for industry help to support such training, adding that the problem is compounded by trained officers leaving the sea earlier – the average Indian master has earned more by the age of 30 than his father did by the age of 60, he said, meaning that he has paid for his house and is ready to retire then. Tsao added the observation that the shortage of seafarers could be eased if there were more women embarking on seafaring careers.


Andreas Sohmen-Pao, Managing Director of BW Shipping (the amalgamation of Bergesen and WorldWide) talked of how the size and scope of the Asian maritime sector is not yet matched by its influence in the maritime sector. Asking whether Asia needs a stronger voice, and how it should be projected, he called on Asia to ensure that there are high calibre representatives available, who speak out in a balanced and thoughtful manner. He then went on to ask how much the Asian shipping community actually aspires to participate. "We can clamour for a voice, but are we willing to give the time and energy to make it happen?" Frederick Tsao added that when it comes to the aspiration among Asian shipping players to participate, "I'm afraid to say there is virtually none." SS Teo also emphasised that "if you want to be heard, then you have to speak up."


Sea Asia included an extensive conference and exhibition programme, having as its theme, "The Asian Voice in World Shipping". The next Sea Asia conference, which is organised by Seatrade and/on behalf of the Singapore Maritime Foundation, will be in 2009.


Contact: Bill Box