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Pupils from Skive HTX on a visit to a Maersk container vessel. Photo: Danmarks Rederiforening

Confidence in the future

Tax, Talent and Technology are the key words in the ambitious plan of making Denmark the leading European maritime nation by 2015. As of today, Danish shipping income has never been larger, and the same goes for the order book.

The Minister of Business Affairs Bendt Bendtsen along with the whole maritime community – from the Danish Maritime Authority over the maritime organizations to the individual shipowner flying the Danish flag – launched the plan.
Optimism is unusually high in Maritime Denmark these days. This is written in early November, only a few days before the general election, which is to be held on November 13 and might give the country a new government and therefore also a new Minister of Business Affairs. However, the organizations expect that the framework for future years will remain the same for work from Copenhagen, which now is called the Capital of the Oceans.

The Danish Maritime Cluster is already a good way towards the goal, fuelled by the extremely high market for almost all categories of ships. At the moment of writing, dry bulk carriers are experiencing daily rates almost close to heaven and hardly ever seen before. The capesize ships have been fixed at a level around USD 190,000, while panamax units can achieve around USD 100,000 in the historically high market, which has also given the Danish balance of payments a new record (the third in a row) of an estimated annual surplus of DKK 180 billion for 2007.

Also the high price of oil, which was sold at a level of USD 93 at the beginning of November, gives a lot of leeway to the maritime cluster including offshore activities.

	The Nordby Mærsk is one in a series of 16,000 DWT tankers from Shanghai. Photo: Bent Mikkelsen

Huge advantage
Danish owners positioned themselves several years ago by ordering or taking control of new tonnage from shipyards in China, Korea or Japan. This has given them a huge advantage in the upgoing market and a handy position for future years in shipping.

The tax scheme was a mutual agreement with the government in early 2007, giving the shipowners tax-free sales of older vessels as well as some adjustment on the tonnage tax-scheme, which meant that further ships on time charter is covered by the tonnage tax system. In return for these adjustments the owners promised the Minister of Business Affairs a much larger fleet under Danish flag – a growth of up to 50 per cent in five years. Furthermore, more employment of Danish seafarers is part of the package. Especially some 200 positions for AB apprentices have been on the Minister’s agenda.

Record order book
One of the advantages is that the market has generated so much cash for the Danish shipowners that they have secured the largest order book ever in history. At present orders amount to 325 ships totalling 50 million DWT (very close to the present controlled fleet of 55 million DWT) of modern ships with a high degree of technology to meet the future. The 325 ships is also a new record for the Danish Maritime Cluster. The number of ships on order gives an indication that the individual ship in the fleet will be larger in the future. Often, smaller units have been sold off and replaced by much larger ones, as in the container business at Maersk Line. Lately a number of the M-class units have been sold off. Their 60,000 DWT is replaced by a number of units from Far Eastern shipyards in sizes ranging from 90,000 DWT to 100,000 DWT as well as the giants from Odense, the E-class ship with a deadweight of 156,900.

A mixed crew of one Dane (captain), one Latvian and three Filipinos onboard a Danish coaster. Photo: Bent Mikkelsen

Its also unusual, compared to former days, that the Danish owners have a large portfolio of bulk carriers ranging from six capesize units ordered by Lauritzen Bulkers as the first in that segment, to several handysize units under construction for D/S “Norden”. For the first time in years D/S Torm has ordered panamax units directly for Danish flag from the long-time connection with the Japanese shipbuilder Tsuneishi Shipbuilding Co. Over the last decade Torm usually took the new ships on time charter from the Japanese owners for take-over after some years in service.

A large number of the 325 ships on order are tankers. They go from 310,000 DWT crude oil tankers, under construction at Dalian Shipyards for A. P. Møller-Mærsk’s subsidiary in Singapore, to a large number of product carriers ranging from 50,000 DWT from Chinese shipbuilders for Torm, Norden and Lauritzen Tankers. The latter company plans to place the tanker newbuildings as well as the capesize newbuildings under Danish flag in order to support the government plan for 2015.

In the smaller segment a company like Scan Trans has joined up with German shipowner Hermann Buss for a series of newbuildings from a Chinese shipyard in order to secure modern tonnage for the future business in project and heavy lift transport. J. Poulsen Shipping of Korsør has joined up with Harren & Partners for a pair of uniquely designed dock-ships – virtually a sailing floating dock – of about 10,000 DWT for combined heavy lift and float on-float off. It is planned that the first ship of the two will join the Danish flag for sailing under the Danish International Ships Register. In the small segment is Svitzer A/S, which for the last five years constantly has had a portfolio of 30–40 tugs and support vessels under construction in China, Singapore and Russia.

Growth in shipping
Looking back over the last ten years, the Danish Maritime Cluster has been growing dramatically. The overall growth in those years has been 57 per cent, turnover grew 240 per cent and the number of employees grew by some 30,000 people.

The Danish Shipowners’ Association calls it the Danish stronghold with these headlines:

• Danish owners own three per cent of the world tonnage.
• Danish owners have five per cent of the world’s shipbuilding contracts.
• Seven per cent of the world tonnage is controlled from Denmark.
• Danish shipowners transport ten per cent of world trade.

Looking at world trade, the North American continent is still the most important market for Danish shipping. Every hour all year round a Danish ship calls an American port. In fact, 17 per cent of the total Danish shipping income (around DKK 25 billion) comes from the American market. Next on the list is China, which at present has 15 per cent of the shipping trade, but with a fast growth trade, which is expected to overtake the US market within a short period of time. The Chinese share of the shipping income is DKK 15–18 billion. However, the largest market in Danish shipping is Europe, with a share of 24 per cent of the total shipping activity, valued at some DKK 25 billion annually.

The remaining shares of the shipping trade are divided among South America (ten per cent), Japan (ten per cent), Middle East (six per cent), Africa (five per cent) and a remainder group.

Recruitment
The Danish Maritime Cluster has already had some success in the highly profiled recruitment campaign called World Carriers. The campaign was launched twelve months ago and has up to now given the minimum fill up of the education positions in the Danish maritime schools. This year, 2007, some 200 applicants have been taken in to start their education as a ship’s officer. On top of that 123 persons have been signed on as apprentices in shipping offices throughout the country. Furthermore, the intake of students to the Danish Technical University (DTU) has increased by some 54 per cent during this year. The two training ships, the Danmark and the Georg Stage, have had a full summer with more applicants than allowed on the ships. All in all the Danish Maritime Cluster has had around 2,000 applications from young people showing an interest in a future education and working life in the maritime sector.

The campaign is rather modern, with a great use of TV-spots/commercials showing young people working in positions as for instance shipbroker’s apprentices in Haifa, Israel, or as ship’s officer on one of the E-class container carriers from A. P. Møller-Mærsk. Apart from encouraging 2,000 youngsters to send in an application, the commercials have also provided great knowledge of Danish shipping. According to market surveys made for the campaign office, knowledge of the Danish maritime cluster is up 10 per cent and knowledge of shipping in general is up 16 per cent.

The campaign is coordinated from the Danish Shipowners’ Association on behalf of the whole Danish shipping community, ranging from shipowners to shipping companies, schools, authorities and manufacturers in the maritime industry. A total sum of DKK 24 million will be used for the campaign, sponsored by DKK 16 million from Den Maritime Fond (a foundation based on the profit from the privatisation of Danmarks Skibskreditfond) and some DKK 8 million from shipowners and other participants in the campaign.

“It is still too early to say if the campaign was a success or not”, says Michael P. Elwert, head of the campaign. “It will take at least three to four years to see, if we found the right way to communicate with young people in the schools and lead them to the maritime industry”.

//Bent Mikkelsen

Latest update 22-11-2007 14:29

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