The Lloyd’s List Top 100 casts light on those in the industry who can see beyond the storm
LEARN to sail in high winds and free yourselves of the hope that the sea will ever rest, was the salutary business advice famously offered by Aristotle Onassis.
For those currently being buffeted by the turbulent swells of the global economy it is perhaps cold comfort to remember that such cycles have been survived before and will inevitably blow in again.
But then trouble has never been hard to find in shipping. It’s how you deal with it that counts.
At this point last year, the pages of Lloyd’s List were strewn with forecasts of blood on the streets and imminent bankruptcies.
While a great deal else may have changed in the 12 months since Lloyd’s List published its inaugural Top 100 ranking of the most influential people in shipping, the promise of pain has certainly not evaporated in the intervening months.
If anything it has intensified and the shipping industry’s top executives are in the middle of what is likely to be the greatest test of their careers so far.
None of those that have made this year’s list have completely escaped the problems facing the rest of the market, but it’s fair to say that some strategies have fared considerably better than others. While cash flow has divided the industry into a story of have and have nots, ultimately it is not luck that has formed our assessment of influence this year.
The Lloyd’s List Top 100 this year are united by their ability to look beyond the current challenges and consider what the industry’s ultimate exit strategy will look like.
They are the innovators and the visionaries, and for this reason our Top 100 can be considered a roll call of the figures who will likely guide us into a new era of shipping.
Innovation in our industry has until recently stemmed from economies of scale and the need to move more, cheaply.
But the gravitational pull east, environmental drivers, consumer demands and national requirements for energy security all point to a new age in shipping. A new age driven forward by a new generation of industry leaders, where companies have to start thinking not just in terms of new efficiencies but of overhauling the entire global supply chain and established ways of doing business.
For this world order to fully emerge, however, further changes are going to be necessary and every one of our Top 100 will be looking to capitalise on the conditions that will catalyse that change.
They will be looking first and foremost to China.
Before change of any magnitude can occur, China has to open up, clean up its business practices, allow creative destruction to happen in its yards, and then turn its ages-old penchant for innovation to create an environment where this overhaul of the entire supply chain can happen.
The simple truth is that no matter how much innovation is displayed by shipping’s elite, the evolution of the industry will not happen unless China weighs in a much more progressive manner.
The man we deemed to be the most influential in the world of shipping last year, China’s transport minister Li Shenglin, only last month reassured a worried industry that China would “guide the orderly arrival of new container and dry bulk ships in the market”.
That may sound like a welcome helping hand given the current structural overcapacity undermining an already fragile market. But it is also a frank admission of a belief that the state has the right to control rates in the global shipping industry, which is more usually run along the lines of market-based principles.
China is changing rapidly and while its shipping industry may not be the organised force that outsiders sometimes assume, it does know its own weight and is increasingly willing to deliver a challenge as Cosco has determinedly illustrated this year. That is a risk for shipping but be sure it is also a situation brimming with opportunities.
Of course, China Inc is not the only global force for change and the industry could do worse than following the lead of the Japanese in their ability to foster long-term innovation capable of delivering a new generation of superior, cost-effective ships.
A new age in shipping, driven forward by a new generation of industry leaders, will require a new approach to technology and investment.
It’s worth reminding ourselves that modern shipping was effectively invented between 1950 and 1970 in the white heat of progress fuelled by a globalisation made possible by shipping and logistics innovations. Since then innovation has been, well, sluggish at best and wilfully stagnant elsewhere.
Many accept that the industry must go back to basics to become more cost effective and efficient, and companies like AP Moller-Maersk are making great strides in that respect. But the real game-changer in terms of ship design is yet to fully emerge.
The signs, however, are positive. Many of our Top 100 have started to speak publicly about embracing new technologies and viewing shipping as part and parcel of a flexible supply chain rather than static steel units that we roll off the world’s shipyards in ever-increasing numbers.
Put simply, the new-world economics will demand a fundamental change to the way we think about shipping. As we search for the technical solutions to the challenges we face, it is important to remember that shipping exists to answer the demands of society.
But it is impossible to ignore the realities of the financial mess that many, even those on our list, are in, and the potential this has to be less creative destruction and more total write-off.
If a restructuring of the order envisioned here is going to happen, the industry must find ways to expand and diversify its capital base. The question of how we pay for all this innovation has not yet been answered fully.
Private and public equity will continue to play a role, but for that to happen investors will need to adjust their time horizons and investment perspectives.
Shipping meanwhile must go to the public for equity and to do that there’s a long uphill battle to build confidence. Our industry is still in the dark ages when it comes to disclosure and in order to obtain the capital to build the model it must convince investors that it has the will to change.
None of this is going to happen without constructive engagement from China. It can’t happen without meaningful investment in innovative, green technology and a positive engagement with all stakeholders, not just the financiers. It requires new ways of thinking and dealing with the new market dynamics that are emerging before our eyes.
If there’s a theme that binds the diverse array of figures on this year’s list, it is that shipping has proved itself time and time again to be uniquely adaptable and open to new ideas.
A shipping crisis is a good time to look ahead and that is precisely what the Lloyd’s List Top 100 is all about.
The characters on our list have continued to influence the market through clever advances, well-timed deals and seizing opportunities where others only saw risk, but they have also recognised the enduring nature of enterprise and imagination in the face of powerful adversity.
That is why they are the most influential people in shipping today.