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Macro Macchiato: Diversity, and a Grand Tour

It’s been a busy few months at Shipping Strategy. At home we have been working on delivering the data crunching and analysis deliverables for a project we find very exciting, viz. the Diversity Study Group (www.diversitystudygroup.com). We have been working with Halcyon Recruitment Ltd’s MD, Heidi Heseltine on this project.

“DSG” as we have come to know it aims to promote best practice in HR diversity policies and strategies. It’s a membership association in effect, within which ship owners, managers and commodity traders can benchmark their diversity policies against their peer group and gain insights via employee surveys into how their colleagues perceive corporate support for different nationalities and ethnicities, gender identification and sexuality, physical ability or disability. Companies over a certain size in the UK must have a diversity policy, and that includes maritime and trading companies.

DSG will officially launch at this year’s London International Shipping Week in September. If this project is of interest, please contact DSG directly. Here are their contact details:

Diversity Study Group 90 Long Acre, London, UK, WC2E 9RZ T: +44 (0) 3746 3760 E: info@diversitystudygroup.com

Meanwhile, I am on the last leg of a Grand Tour that has taken me around some of the shipping capitals of Europe in the last three months: to Oslo, Copenhagen, Hamburg, Rotterdam, Antwerp, Marseille, Monaco, Athens and, after a diversion to New York last week, my Grand Tour finishes up this week at Maritime Week Gibraltar where this Tuesday I am giving the keynote address on “Shipping: an Industry in Transition.”

I’m pleased to say that, after one of the coolest and wettest springs I’ve ever known across Europe (I have been rained on everywhere), there is proper summer sunshine in Gibraltar. As a leading bunkering location at the mouth of the Mediterranean, Gibraltar has a unique physical location and of course an unusual political situation, being run by the British since its capture in 1704. But it offers a wide variety of industrial and service sector maritime products and I’m glad to see how lively the week is shaping up to be.

I wrote last week about the five kinds of risk in the shipping industry. All of these can be thought of as tiers of transition. To remind you, or if you didn’t see last week’s Macro Macchiato, here’s some bullet points with examples.

The five tiers of transition

  1. Geopolitical: Belt & Road Initiative, Trade Wars, Middle East

  2. Technological: Industry 4.0 and shipping

  3. Regulatory: Marpol Annex VI, ballast water, engine efficiency, Hong Kong Convention,

  4. Financial: Changing capital markets and corporatisation of ship ownership

  5. Commercial: Changing freight markets

The last of these is of course the one we are all most interested in. Oil freight markets (as measured by the Baltic Exchange) have been markedly less volatile as well as less remunerative since the global financial crisis, despite the world consuming over 100 Mn bpd of oil now, up 10 Mn bpd in ten years. On the same measure, dry bulk freight markets have been more volatile, with shorter cycles. And container earnings in the ten years since 2008 have been half what they were in the ten years before 2008. Why are the different sectors diverging in their behaviour when they are faced with the same risks and transitions? I don’t know the answer to that yet, but I can now look forward to a summer of thinking about it.

The Take Away

There is no doubt that the world is a more changeable and unpredictable place than it was before the global financial crisis. Shipping has not been left unaffected by changes to society, politics, technology, finance and economics. What bothers me, intrigues me, is why the outturn should be different for dry cargo, tankers, and containers. If you have any ideas, please do get in touch. Meanwhile, I will be in my deckchair, sipping a long drink, and having a good long think. I will keep you abreast of any conclusions I may draw.

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