The race to be an international maritime centre

Sam Chambers identifies the runners and riders who harbour shipping hub ambitions.

There’s been a raft of surveys of late detailing which is the greatest international maritime centre (IMC) in the world. Maritime CEO’s own poll a year back saw Singapore come out firmly on top, a result it has since repeated twice more with reports conducted by firms in Oslo, London and Beijing.

While the best known, traditional names in the IMC mix vie for top billing there are a number of names who are emerging as contenders, bolstered by keen government focus and with energetic teams travelling the globe to highlight their strengths. For London, Singapore and Hamburg read Dublin, Vancouver and Manila among the newer names keen to make a name for themselves with the world’s shipping community.

So what makes an international maritime centre? In essence, Maritime CEO contends the magic IMC formula is a mix of easy access to capital, shippers and experienced staff combined with a reasonable legal and tax infrastructure.

To this end, Singapore has made itself the preeminent shipping hub in the world, but one that it is still looking to bolster. Singapore Shipping Association boss Esben Poulsson has repeatedly warned this year that the city-state cannot rest on its laurels. “We feel we are a little weak in the capital markets and listings,” he tells Maritime CEO.

Hubris and laurel-resting for a decade or so has seen two established names – London and Hong Kong – decline in the IMC rankings. Both cities are now planning maritime renaissances.

The newly elected Lord Mayor of the City of London, Jeffrey Evans has set out his goals to develop maritime growth during his tenure. Evans, a broker with Clarksons Platou for more than 40 years and chairman of local lobbying group Maritime London, tells Maritime CEO: “It is now very exciting; right up to the highest levels of government there is an awareness that Britain has a massive amount to offer, we just must make sure that government is very well joined up, try to simplify processes, bring things to this cross government ministerial committee that the government will introduce.”

In Hong Kong, meanwhile, the city’s private sector appears to be making the right inroads finally with the local government to get maritime higher up the list of priorities.

“People, location and policies have to be our strengths. Competiveness, not incentives, is key,” says Arthur Bowring, managing director of the Hong Kong Shipowners Association. Bowring reckons Hong Kong has people and location sorted. “What we need now is policy,” he maintains.

With government coming out in support of shipping the key now is to get the city’s Legislative Council – the de facto parliament – to follow suit, Bowring says.

Hamburg, Rotterdam, Oslo and New York all continue to grow in IMC status, the latter two as the most vibrant places to source capital in shipping.

Of the mid-tier names two European places – Cyprus and Monaco – are making a strong run on their growing maritime cluster credentials. Monaco is growing as an all round hub, led by fast expanding owners while Cyprus, despite intense competition from other hubs, is leading the way in luring disgruntled Greek owners away from Piraeus. Some 42 Greek shipping firms had emigrated to Cyprus and entered the island republic’s commercial registers by the end of November.

Among the young pretenders to the IMC throne are many familiar maritime names, often being repackaged to promote themselves in the face of very expensive established names. The biggest names – the Londons and Singapores of this world – do risk pricing themselves out of the market. Others are waiting in the wings. Vancouver, Dublin, Shanghai, Busan and Manila are all trumpeting their potential.

This September saw the international launch of the Vancouver International Maritime Centre (IMC).

The Canadian city is trying to position itself as a base for shipowners with very friendly tax preferences. It is not the first time Vancouver has done this of course. Back in the 1990s, as Hong Kong readied for reunification with China, a number of owners hedged their bets by setting up in British Colombia.

Graham Clarke, the chairman and ceo of the new project, tells Maritime CEO: “Our mandate is three fold. First we will try to attract shipowners, then we will facilitate them, and also we are here to advise government.”

With shipowners at the centre of the Venn diagram, as Clarke describes it, it is then vital to get other services onboard, not least ship finance.

Clarke says every facet of shipping services is now being looked at by his team to make the Canadian city a shipping hub, even the shipping register. Could there be a second flag? “You never know,” he says, “we’ll leave no stone unturned. We will do everything to make Vancouver a great place to settle down.”

Meanwhile, Ireland has a unique opportunity to become a shipping powerhouse, a report in July claimed.

The report, issued by the Socio-Economic Marine Research Unit (SEMRU) at NUI Galway, claims a planned International Shipping Services Centre (ISSC) could put the Irish capital on a par with established hubs such as London, Hamburg and Singapore.

“Building on the experience from the International Financial Services Centre, and on Ireland’s success in aircraft leasing, the ISSC plan aims at developing a hub for international ship finance in Dublin to establish Ireland as an international maritime centre such as London, Hamburg and Singapore,” the report noted.

ISSC Dublin aims to be the world’s first shipping centre with everything under one roof like a trade centre, its ceo, Cormac Megannety, tells Maritime CEO. Megannety also says that the renewed focus on maritime by both the public and private sectors could see the Irish flag promoted as an attractive registry for global shipowners.

Ireland is growing as a global maritime business hub and its strengths in asset leasing could provide an alternative source of finance for shipping, according to a new report commissioned by the Irish Maritime Development Office and authored by tax advisors KPMG and legal firm Dillon Eustace.

The republic is trying to position its maritime sector to be as globally dominant as its aviation industry. Half of the top 50 aviation leasing companies in the world are based in Ireland, and more than half of the world’s leased aircraft are managed from the country.

“This report identifies many advantages that set Ireland apart as a hub for maritime commerce with a 12.5% corporate tax rate, combined with a very competitive tonnage tax regime, extensive double taxation treaty network, and favourable treatment of leasing, securitisation and other structured finance,” says Liam Lacey, director of the Irish Maritime Development Office.

The final three in our line up of heirs are all Asian, but vastly different. Shanghai might bristle at being termed an up-and-comer. It is the world’s largest container port, a major shipbuilding centre, and home to a number of very decent maritime tertiary educational establishments. It has brokers, banks, leasing companies, lawyers and owners. It also aims to be an international finance and maritime centre by 2020 – it is just the rules and regulations, despite the opening of a free trade zone, that are not moving fast enough. Among Shanghai’s key IMC backers is Ben Zhang, a serial entrepreneur, who has founded the Shanghai Maritime and Finance Excellence Center (MFEC) – a one-stop-shop service platform in the heart of Pudong. The centre has the backing from the UK capital, with industry lobbying body Maritime London and the City of London both supporting the initiative. Incentives are on offer to move in to the building. These include 20% off rent as well as the ability for companies who move there to leverage off MEFC’s pan-China network.

“By bringing everyone together under one roof, the cluster will help grow business for everyone,” Zhang says.

Busan, meanwhile, is having huge amounts of money thrown at it by the municipal and national governments to make it an IMC. Like Shanghai generous financing and leasing opportunities are on offer. Busan’s biggest problem is its lack of internationalism – it remains too Korean, English is not common.

Finally, there is Manila, an appropriate place to grow as an IMC given shipping’s lengthy downturn. The Philippines has already attracted many managers and lines to shift their back offices there. Authorities in the Southeast Asian nation are keen now to build on its maritime cluster. Infrastructure has to improve for that to happen but the low cost base when compared to Hong Kong and Singapore, an educated workforce and proficiency in English means there is a platform from which they can build.

Despite the downturn, the pursuit to become an IMC has never been stronger. No one can rest on their laurels.

This article first appeared in the just published latest issue of Maritime CEO magazine. Readers can access the full magazine for free by clicking here.

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