SHIPPING: Denmark is rapidly on its way to becoming the most important centre for international shipping. Danish shipowners control more than 2,500 ships – and the chairman of the Danish Shipowners’ Association, Knud Pontoppidan, expects the trend to continue. “Copenhagen is simply bubbling with capability, quality and flexibility. Danish shipping is world class.”
It began with the Vikings, who were among the first in world history to exploit their superior ship technology for integrating shipping and foreign trade. The image of raw and ravaging hordes has tended to obscure the fact that the Vikings’ brilliantly seaworthy longships were just as much merchant ships as warships. The Vikings’ indomitable urge to constantly seek new challenges further and further away from home, turned the entire known world at the time into their trading zone. They planted the first seeds of globalisation as we know it today.
“10% of the total tonnage of ships exceeding 3000 tons is today managed by Danish shipping companies. Today, Danish controlled ships transport more than 10% of the world’s freight. It has made Denmark, and Copenhagen in particular, into one of the world’s most important shipping centres. Things are bubbling, not just in the wellknown big shipping companies like A.P. Møller-Mærsk, Torm, Norden, JL Lauritzen and DFDS, but in all Danish shipping companies which have proved amazingly capable of exploiting and timing the upswing in world trade that globalisation has brought.”
So says the chairman of the Danish Shipowners’ Association, Knud Pontoppidan. In his daily life he is an Executive Vice President of A.P. Møller - Mærsk, one of the world’s largest shipping companies. As the chairman of Danish Shipowners’ Association he is spokesman for a large number of shipping companies which jointly own more than 500 ships with a total tonnage of nearly 10 million tons flying the Danish flag.
“In recent years, it is just as much the operating activities of Danish shipping companies which beamed attention onto the Danish shipping industry,” he says. “Since 1988, when the Danish International Ship Register was established, the flagging of Danish ships has turned into tremendous growth which has made the industry into not only one of Denmark’s biggest foreign exchange earnes, but has also made Denmark one of the world’s richest and most efficient shipping nations.”
“Danish shipping companies are doing a lot of business. Not just through expansion by building new ships for the Danish flagged fleet, but also by chartering of foreign ships which are then operated from Copenhagen. There are a good couple of thousand ships which can be added to the 500 owned vessels. Politically and financially it has become attractive to run shipping activities from Denmark and the industry attracts many young talents both for sailing the ships as well as in the shipping profession. It’s no boast to say that Danish shipping companies are among the most competitive in the world today.”
’The Blue Denmark’ consists of a large number of subsuppliers for the shipping industry: Shipyards, highly specialised companies in navigation equipment, ship painting, equipment for fixtures as well as machines of every imaginable kind. More than 100,000 people are employed in this sector.
“The broad understanding for the industry by Danish politicians, as it has been run since 1988 with crew rules, tonnage tax and modernisation of technical rules, has meant that we have been able to maintain the connection to the sea as we have done since the Vikings. There are also many thousands of very capable young people who feel attracted to the shipping profession. Not just as sailors, but also as staff in ship brokers. They are skilful young people who are ready to travel, who know languages and who are flexible. And then we have a tradition for sound business practice.”
Quality is the prime characteristic of Danish shipping. At the beginning of the year the International Chamber of Shipping (ICS) updated its list of flag states which meet their obligations to international conventions. ICS looks at 18 criteria altogether and of the 106 countries on the list, Denmark is one of only four countries that meet all obligations. Denmark also has the world’s youngest fleet with an average ship age of 6 years. And new Danish ships are being built like never before. These are mainly ship types which can exploit the record high freight rates for advanced and safe transport which help push earnings ever higher despite the dramatically increasing prices of new ships.
“In 2004, Danish shipping companies generated foreign exchange earnings of more than DKK 120 billion (approx. USD 22 bn), and although you can’t necessarily expect that revenues will continue at this level, expectations for 2005 and the years beyond look very sensible,” says Knud Pontoppidan. “The developments we see in China, in India and gradually also in South America, make us feel optimistic.”
“Today shipping is one of the most liberalised trades in the world. But it was not like that 20 years ago. At that time, it was tied by protectionism and rules which meant that there were a lot of countries that you couldn’t just sail to freely. Together with other great shipping nations, Denmark has done a lot of work to liberalise shipping. Naturally new problems constantly arise. Tax rules, enhancing safety, combating terror, etc. But we manage it. And with the globalisation of world trade that we see today, there is no way back. What we must keep in mind however, is constantly to be on the guard against tendencies to protectionism where fear of globalisation can lead to thoughts of new barriers for world trade, new tariff walls etc. In such situations, shipping is hit first and the hardest.”
“Currently conditions are good and it is up to shipping companies to seize the opportunities. Globalisation has meant that all kinds of products are being carried all over the world. French wine is being shipped to the US and American wine back to France. Everybody can get everything from the whole world simply because the price of the freight itself is amazingly low at 1-2% of the shelf prices. And as long as this trade develops positively, shipping will continue to bloom.”
