LISW17: Global Maritime Cluster Round Table Debate

SMI used the opportunity of LISW to bring together the heads, or leading representatives of many of the world’s maritime clusters to debate the issue of how clusters should work and cooperate with each other. The panel assembled before an audience of 85, in the London offices of maritime lawyers Hill Dickinson debated the issues. Chaired by SMI Editorial Director Sean Moloney, the panel consisted of Simon Doughty, CEO of the Wallem Group; John Hulmes, Chairman of Mersey Maritime and member of the board of Maritime UK; Dick Welsh, Director of the Isle of Man Ship Registry; Chris Shirling-Rooke, CEO of Mersey Maritime; Esben Poulsson, President of the Singapore Shipping Association; Scott Bergeron, Chief Executive Officer of the Liberian International Ship & Corporate Registry (LISCR); Kaity Arsoniadis-Stein, Executive Director of the Vancouver International Maritime Centre; Thomas Kazakos, Director General of the Cyprus Shipping Chamber; Dr Patrick Verhoeven, Managing Director – Policy and Strategy at the International Association of Ports and Harbors (IAPH); Nawfal Al Jourani, Chief Officer Dubai Maritime Cluster.

Paul Brewster IMDO
Can maritime clusters really work constructively together or are they ultimately out to strengthen their own roles internationally?

Sean Moloney
Esben would you like to start

Esben Poulsson
I think the answer is yes and no. Clusters can and do work together so at a working level, for sure, we can collaborate. We do, however, compete as do all our board members but we sit down and work on a common purpose so I would say that yes it can be done and is being done. Anything that raises standards is a good thing. And good old-fashioned competition tends to raise standards anyway.

Sean Moloney
Every time I go to Hong Kong there tends to be a lot of competition with Singapore. Are you very happy to work with the Singaporeans on everything?

Simon Doughty
We have to work together because as an industry we are so fragmented. We are often not going to the IMO with a single voice. So, there are so many areas we must work together on. We go to a lot of these conferences around the world and I must talk extensively about ballast water or low sulphur fuel but we need to bring it all together. We should be forming working groups together but we will also compete and try to bring new companies into our clusters. The young generation of seafarers don’t come from Hong Kong or Singapore but come from India, China and the Philippines, so except for the Shanghai cluster, we have to work out where the technical people will come from.

Sean Moloney
As clusters, you are out to strengthen your position globally, so how do you balance that against the need to cooperate?

Simon Doughty
Hong Kong has traditionally been a strong cluster and if you look we have three of the world’s largest shipmanagement companies there. Hong Kong’s shipowning group is not new to the market and has been around a long time. Hong Kong also has one of the largest ports in the world and the Hong Kong Shipowners Association is celebrating 60 years of existence. So, it is a solid base. We have a very good legal system and there are not many places in the world where you have a 25-minute commute into a main city for work. We are also in very close proximity to China.

Scott Bergeron
I agree with Esben’s answer of yes and no because when you look at a cluster, if you consider government support of it you have to ask what is their objective? It has to be economic growth and in that regard it would be very difficult to convince a government that it is worth collaborating in its strictest sense. But then I look at New York and Greece for example, where there is a strong collaboration, developed through business ties. A lot of the IPOs were launched in New York, establishing Greek ship ownership in New York City. Collaboration between Norway and Singapore is another good example.

Sean Moloney
Internationally, as a cluster is New York losing its way do you think?

Scott Bergeron
I don’t think it is losing its way, however, I think it is missing critical elements. There is an association in New York which tries to strengthen the cluster and one of its lines is, what is New York as a cluster missing? And a strong aspect of what is missing is the technical side. New York is an expensive place to work and to employ people from, but other cities have that problem as well. So I think New York is not as holistic as it could be.

Sean Moloney
Thomas, what are your thoughts, especially bearing in mind that Cyprus as a shipmanagement cluster is very strong technically.

Thomas Kazakos
What is the purpose of a maritime cluster? It is supposed to facilitate the development of maritime activities and these can vary. The problems facing clusters are often the same and the solutions to the problems internationally are often the same. Giving a practical example, Cyprus went through a financial upheaval in 2015, not related to shipping, but you wouldn’t believe the amount of support we received from our main competitors around the world telling us to be strong because while Cyprus may not be as big as the other clusters, it is an important cluster. Yes, we have a level of competition but we must work together and focus on the things that matter as well as try to gain more clientele.

Sean Moloney
Patrick, you have spent a lot of time in Brussels working with the European regulatory machine. Is Europe doing enough to support the clusters here in Europe?

Patrick Verhoeven
As I head up a global ports operation, as opposed to the ECSA secretariat, I have technically now left Europe. But it is a very pertinent question and one which has been on the agenda of the European Community Shipowners’ Associations (ECSA) for a while: does the EU have a shipping policy? And at best what we can say is that we have the State Aid Guidelines which give a fiscal framework but then you have the odd bits and pieces and they don’t always sign up for the common goal. This is the main issue with the European Maritime Policy, and this year the European Commission has agreed to debate the Maritime Policy and we also had the European Shipping Week in March. What will happen is that apart from continuation of the basis, which is the State Aid Guidelines, there are many other issues which could be done; more shipping friendly or proactive approaches – something that maybe the European Union is missing at the moment. When you talk about cooperation, that is present among many of the clusters in Europe but we are working towards one solid goal which Member States can apply where they can compete on a level playing field.

Sean Moloney
I want to bring in John Hulmes, because as we all know, Brexit is dominating debate at the moment. What would you say are the opportunities for the UK outside of the European Union, moving forward?

John Hulmes
Who knows, as there is insufficient information as to where the national cluster is going. Insofar as the world is concerned, I don’t think that Brexit will make much difference because the UK has always been a global trading nation; shipping has always been international and we are dealing with international companies many of whom have interest in clusters throughout the world anyway. So, as a cluster organisation, we must face the fact that our main components are also main components in places like Singapore or Hong Kong.

Sean Moloney
The UK is setting out its stall during LISW and the UK Shipping Minister John Hayes announced this week that he wants to double the size of the flag.

John Hulmes
Yes, we have seen the headline figures but we have still to see the substance behind that.

Sean Moloney
Nawfal, let me bring you in because Dubai had its own financial crisis but has effectively and publicly bounced back. Give me your views on where you see Dubai fitting in internationally, and where you see cooperation existing?

Nawfal Al Jourani
Many thanks for this and I appreciate the discussion today. A very important point is the nature of shipping itself and it is international. By virtue of that, it forces all of us to look at competition in a different perspective. When you compete, it doesn’t mean that you displace or replace. We do complement each other because the international business of shipping needs geographic distribution of quality of excellence locations, if you may, where there is a playing field with a certain quality standard, or business excellence model, or a shared language of all of these clusters. But the components of clusters are not identical because in Dubai, our components differ from Canada, Hamburg or the UK. What is critical for all of us is to look at what distinguishes each one of us in a way which can actually help us achieve on one hand the internal growth that we all want, while on the other hand, ensure that we contribute globally. When we were facing our crisis we decided to implement our maritime strategy which embraced tangible behaviour from the Government departments and the private sector. As a result we have increased the number of shipping businesses in Dubai to around 5,600 – all of which contribute almost 7% to Dubai’s total GDP. Every maritime cluster around the world has its own added value: in Dubai we are the number one in our region and we are not saying we are going to replace Singapore. What we are saying is that you are building an excellent model in your own environment and you build it and share it with other businesses. We are the Dubai cluster – we will never be the Singapore cluster.

Sean Moloney
Where do you see opportunities for collaboration – Iran or Iraq. Is this possible.

Nawfal Al Jourani
It is all possible. Opportunities for collaboration are numerous. For example, knowledge sharing.

Sean Moloney
So bringing in Kaity, what do you think are the drivers behind the growth of maritime clusters and is the composition of the future clusters changing as shipping changes?

Kaity Arsoniadis-Stein
I always look at it in terms of the ship owner and what works best for him. Looking at it from that macro view down, you want to be in a jurisdiction that is stable. A stable, modern democracy where owners can have their companies and have a good idea where the regulation is coming from: will it move and how quickly will it move; what is going to change? Because when they are planning the next five to 10 years for your company, you do not want to be somewhere where the regulation will change overnight and reduce your competitiveness. So, while shipping is changing, the jurisdiction you are in should be stable.

Sean Moloney
I want to bring in Chris and Dick on this issue. You are looking after clusters in a certain part of the UK where there are opportunities for collaboration. But Dick, you also have an eye on the international market as well when you are heading up a flag like the Isle of Man?

Dick Welsh
We can’t sit in the middle of the Irish Sea and expect world shipping to come to us so when we set our maritime stall out and we want maritime business, we want it to be truly international so we start with the ship registry but we also have to realise that we don’t have shipbuilding or a strategic port, we are not strategically located, but we can do things as an offshore centre. We are in Europe, but not part of the EU, we are in Britain but we are not part of the UK. We  have to work with other clusters to draw on the international business. We are not affected by Brexit, although there are certain elements which hang on the UK coat tails, and we are interested to see what happens there. But in terms of the shipping business, we are a non-EU flag, we have always been excluded from the EU incentives that drive shipping towards some of the traditional shipping centres in Europe. We have set ourselves up as a yachting centre and we work closely with the other Red Ensign partners and we have different strengths and jurisdictions there. It is key to us that we can talk to other clusters.

Sean Moloney
Paul, as the questioner, what are your thoughts? In Ireland there are lots of growth opportunities presumably, especially considering Brexit?

Paul Brewster
Growth of the Irish maritime sector is not driven by growth in the Irish flag. Growth has been seen on the business side of things. It is clear that different clusters and different regions have different areas of expertise. And therein lies the opportunity to collaborate. There has been a lot of interest in Ireland following Brexit and it’s not surprising considering that Ireland is not that big a shift over from the UK. But equally there has been a lot of interest from Asia.

Chris Shirling-Rooke
In Liverpool, when we talk about maritime, we talk about the whole supply chain and add to that the universities, the colleges, and it is also local government playing a big role as well. And our job at Mersey Maritime is to create the opportunity for new jobs. The main point here is that every cluster is so different, with so many differing strengths. Sean, as you now, we also sit on the board of Maritime UK, and if you ask yourself ‘what does a maritime cluster look like?’, we work very closely with the Isle of Man. And we call it collaborative cooperation.