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GLOBAL
shipping is not merely suffering a cyclical
downturn, but from "fundamental structural
change", World Shipping Council chairman
Ron Widdows told a large gathering at Hong
Kong Trade Development Council shipping
conference.
Speaking
to the Asian Logistics and Maritime Conference
last November, Mr Widdows said changes in
ship finance, new mega alliances, environmental
costs, emerging market growth will combine
to change the face of global shipping.
"Traditional
shipping finance has not changed - it's
gone," he said, adding that the German
KG system that financed 30 per cent of the
ships afloat is no more.
"There
will be some PE (private equity) activity,
but it will be an opportunity for Asian
finance," he said as their economies
grow more robust, with other emerging markets,
while aging, mature economies slow down.
Mr
Widdows, also CEO of Rickmers Group, and
a former CEO of APL and NOL, said these
trends will hit trade flows as intra-Asia,
rather than east-west trades, not only dominate
global shipping in terms of tonnage, but
in dollar volume.
Mr
Widdows was part of a panel discussion that
included Singapore-based George Yeo, chairman
of Hong Kong's Kerry Logistics Networks
and KPMG logistics chief Justin Zatouroff.
Mr
Yeo spoke of the huge political, cultural
and social impact of China on ASEAN economies,
adding that China's plans were political
as well as economic, saying it planned to
lay in infrastructure throughout the region
that would remove physical and bureaucratic
barriers.
Mr
Yeo took a benign view of such developments
saying that China's interests were entirely
peaceful, while conceding that India had
concerns.
"China
will re-unite us," he said. "Today,
there are 128 countries which name China
as their most important trading partner.
These changes are of enormous historical
importance."
KPMG's
Mr Zatouroff said logistics development
as well as infrastructure would be key to
progress in the ASEAN bloc, with a burgeoning
e-commerce driving growth through popular
demand.
"It
is not profitable yet," he said, giving
an example of customers ordering three television
sets all offering "free returns"
and having selected one model, send the
other two back.
"This
not only adds cost of returning the sets,
but repackaging them for re-sale, which
is a cost that will have to absorbed,"
he said.
Yet
Mr Zatouroff's big concern was infrastructure
financing, traditionally a public sector
role, but with thin tax bases worldwide,
private financing was urgently needed.
"In
Britain, we benefit from infrastructure
investments made 150 years ago, but such
a financial window would be a hard sell
to a modern corporate," he said.
Mr
Yeo, inspired by China's infrastructure
building, pointed out that so many highways
and railways have been laid to the borders
of southeast Asia.
As
to finance, he imagined quid quo pros with
Beijing financing and road extension in
Thailand in exchange for buying its rice
surplus or offering electricity to Laos
for a right of way.
The
panel was asked a question about the varying
level of skills of the people of the ASEAN
and how that would be handled.
Mr
Yeo urged greater cultural sensitivity,
pointing out that the bloc was composed
of many religions - "50 per cent is
Muslim" - and said each culture had
different ways of speaking and meaning,
even to what contracts meant.
There
were pitches for more education and more
state spending to fix what is ailing in
national skills sets.
But
Mr Widdows said: "Let me take a more
competitive approach."
He
then told the story of opening up an office
years ago in Shanghai and more recently
in Chongqing, where he found western Chinese
workers highly motivated and outclassed
the Shanghai crew. "In Chongqing, productivity
was off the charts!"
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