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The private independent shipowner wins the day at Sea Asia parliamentary debateThe private independent shipowner wins the day at Sea Asia parliamentary debate

The second day of Sea Asia 2017 saw an impassioned debate as to whether “the best days of the private independent shipowner are over”.

Marcus Hand, Editor

April 26, 2017

2 Min Read
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Transforming the conference hall intp a parliamentary debating chamber six speakers - three for the motion and three against – put their case to the delegates, or members of parliament, with BW Group and Singapore Maritime Foundation (SMF) chairman Andreas Sohmen-Pao presiding as Speaker of the House.

The debate played out with a level of passion rarely seen at shipping conferences with core themes of other people’s money, or OPM, and scale running through the session.

Opening the speaking for the motion Michael Parker, global head of shipping for Citigroup commented on what has been happening in recent years said: “The few have destroyed the many, and that’s why the private shipowner will struggle to survive.”

Kenneth Hvid, president and ceo of Teekay Corp, noted that the company had started out as a private one in the 1970’s but gone public in 1995. “Size and reputation matters,” he stated, saying that a reason to be a public company is that bankers say they are focused on serving larger, public companies.

Mikael Skov from private equity backed Hafnia tankers said if you went to a bank wanting to buy one or two ships, “it was not going happen” and owners needed scale and a plan.

It was Greek shipowner Flippos Lemos, president of NS Lemos & Co, speaking against the motion, who coined the OPM term, which was then picked up by other speakers. “Shipping is quite simply not an ideal fit for the broader equity capital market. Other people’s money serves to exacerbate short term investment in the industry,” he stated.

Also speaking against the motion was Randy Chen, vice chairman of Wan Hai Lines, a niche privately-owned container line. “Financial markets and shipping are rarely aligned,” he noted. This means that decisions to buy are taken at the wrong time in the cycle.

“The simple rationale is we take the capex decision out of institutional money’s hands. That’s how you can ‘zig’ when other people ‘zag’,” Chen stated.

Kenneth Koo, chairman and ceo of TCC Group, questioned if there ever had been any best days in shipping except perhaps in the 1950s in Asia, with any booms being very short.

As for the so-called supercycle in the noughties he asked: “Who were the victims? Not us (family owners). I would say the banks were the victims as they kept on lending.”

When it all came down to the vote at the end of the debate, the independent private shipowner turned out to be the clear winner in the eyes of the members of the audience with some 73% voting against the motion.

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About the Author

Marcus Hand

Editor

Marcus Hand is the editor of Seatrade Maritime News and a dedicated maritime journalist with over two decades of experience covering the shipping industry in Asia.

Marcus is also an experienced industry commentator and has chaired many conferences and round tables. Before joining Seatrade at the beginning of 2010, Marcus worked for the shipping industry journal Lloyd's List for a decade and before that the Singapore Business Times covering shipping and aviation.

In November 2022, Marcus was announced as a member of the Board of Advisors to the Singapore Journal of Maritime Talent and Technology (SJMTT) to help bring together thought leadership around the key areas of talent and technology.

Marcus is the founder of the Seatrade Maritime Podcast that delivers commentary, opinions and conversations on shipping's most important topics.

Conferences & Webinars

Marcus Hand regularly moderates at international maritime events. Below you’ll find a list of selected past conferences and webinars.

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