At The Prow

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Sam Chambers sam@asiashippingmedia.com

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Contributors: Nick Berriff, Andrew CraigBennett, Paul French, Chris Garman, Lars Jensen, Jeffrey Landsberg, Dagfinn Lunde, Mike Meade, Peter Sand, Neville Smith, Eytan Uliel

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Shipping’s fastapproaching demographic time-bomb

There is a potentially epic demographic time-bomb coming shipping’s way that far too few of us are discussing regardless of where you might stand on the whole autonomous debate.

I’ve been fortunate enough to moderate two shipmanagement panels in the past month at our Maritime CEO Forums in Singapore and Monaco.

At the former, Carl Martin Faannessen, CEO of Manila-based crewing specialist Noatun Maritime, shocked delegates by relating how, according to studies he had been involved in, once a country’s GDP per capita per year enters the $12,000 to $15,000 zone on a PPP basis, this tends to be the moment where sourcing ratings becomes difficult.

“So for the Philippines, India and Indonesia that means we do not have a lot of time,” Faannessen warned, with all three countries on course to crack this GDP yardstick this decade. He added that it typically takes between five and seven years to to go from zero to a stable source of crew in a new sourcing nation. Acknowledging the needs to source crew with decent English, a high level of compatibility, in relatively stable countries, where high unemployment can be a bonus, Faannessen selected Kenya as his top pick for new sources of crew.

Over in Monaco, the subject was debated with René Kofod-Olsen, the CEO of V.Group, telling invitees to exclusive shipowner retreat on the Côte d’Azur: “The brain drain in certain nationalities in not selecting a career at sea should keep us all awake at night.”

Henrik Jensen, who heads up crew manager Danica, warned delegates that other industries were coming in to take talent away from shipping, citing the IT sector in the Philippines as a good example.

“We have to have a real rethink about how we employ people. The competition for talent from other industries such as IT is a real threat,” Jensen said.

V.Group’s Kofod-Olsen argued that the stereotypical view of where ratings will come from in the future is set for change. “These barriers will break down,” he predicted.

How we have viewed the traditional crew sourcing powerhouses over the past decades is about to change rapidly, and we all need to be talking about it a great deal more. ●

Sam Chambers Editor Maritime ceo

What the midterms tell us about the American economy

The US is not in as bad health as the Republicans tried to infer

The midterm elections in the US are always in effect a referendum on the state of the economy and a judgement on the current administrations economic policies. Of course in America many other factors are at play too – social policy, Supreme Court decisions, culture wars. But economy is fundamental still.

The Biden administration and the Democrats were overall bouyed by the November results, having been at pains to point out to the electorate the apparent and significant third quarter bounce in economic performance this year – according to the commerce department gross domestic product increased 2.6 per cent on an annualised basis between July and September 2022. This is after a contraction in the first half of the year, but still good news. Up for the year and ahead of most analyst expectations for the quarter.

Job creation was good for the quarter with over 160,000 new posts available. Imports were down but exports up, in large part due to sales from the oil sector in the wake of the war in Ukraine. Though perhaps war in Europe is concerning consumers. Again according to the commerce department, consumer spending was up by a measly 1.4 per cent, which given some wage rises and new jobs should have been better. Rising prices, higher inflation, mortgage pressures (in some cases seeing rises of seven per cent) and fears of overseas events may have combined to dampen American consumer confidence. And most consumers know that the Fed is expected to make additional interest rate increases before the end of the year and in early 2023 too.

Looking for political advantage the Republicans argued the economy under Biden is in recession. This is not altogether clear at all though some analyst talks of “technical recession” with two consecutive quarters of shrinking GDP. But third quarter number reverse that trend.

Aside from the war related increase in petroleum exports boosting the numbers, other sectors have not done so well. The success of oil (and gas – with exports to Europe, in particular Germany, soaring) has largely led to some forgetting that the Biden administration’s ban on semiconductor exports to China is also one of the most important policy moves of the year and may not stop at semiconductors as the ‘tech war’ between Washington and Beijing intensifies. According to some estimates – chips are the sixth largest export category from the US (according to US trade data) and China by far the largest single destination for those chips.

Other sectors saw reduced exports due to global circumstances. For instance, plane maker Boeing is still in the Doldrums with the global tourist market still depressed and no new orders from once rapidly expanding markets such as China. Still growth was recorded in exports of plasma and vaccines, motor vehicle parts, medicines in pill form, and medical instruments – all major export categories. ●

USA: Leading 6 Export Partner Nations, Jan-May, 2022

Nation % of total US exports Canada 17 Mexico 16

China 7

Japan

UK

Germany

Other

Total

Source: Commerce Department 4

4

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