The second annual Hong Kong Maritime Forum, titled “Hong Kong – Global Industry & Thought Leadership: Building on Tradition & Innovation” took place on December 1, bringing business leaders together to address the pressing trade issues of our times.
Held for the first time exclusively online, the conference was sponsored by Capital Link and InvestHK with the collaboration of the government of Hong Kong.
The Minister of Transport, Frank Chan Fan, who is also the Secretary for Transport and Housing for Hong Kong’s Special Administrative Region and Chairman of the Hong Kong Maritime and Port Board, honored the Conference by delivering the keynote addre
Several ongoing initiatives to strengthen Hong Kong ‘s position as an important hub for global shipping were highlighted at the Conference.
The Forum discussed hot topics of critical significance for the industry and Hong Kong, featuring industry leaders from the global and the Hong Kong maritime communities.
Several initiatives under way aiming to reinforce Hong Kong’s position as a major hub for the global shipping industry were also highlighted during the Forum.
Discussions included Hong Kong as a global maritime hub, geopolitics and upcoming environmental regulations, the changing landscape in finance and capital markets, the significance of seafarers’ welfare and training, and concluded with high-level discussions on the future direction of the industry and its transformational impact on shipping.
Nicolas Bornozis, the President of Capital Link, Inc. welcomed the participants, stating “Hong Kong indeed has been a leading global maritime hub and the Hong Kong maritime community has been one of the major, leading contributors to the global shipping Industry.
“Hong Kong shipowners have gone through amazing challenges and transformation over the years,” he added. “Resilience, flexibility, adaptability, and a rich industry heritage underpin the Hong Kong Maritime Community.
Bornozis pointed out that the Forum members would be “taking stock of how Hong Kong came to the present point” at the Forum, as well as “why it has become a major international shipping center and what lessons we can take from the past for the future.”
Tim Huxley, CEO of Mandarin Shipping, related to participants that the initial reconstruction of the city after the devastating bombing and occupation of the second World War preceded the migration to Hong Kong of tens of thousands of migrants as the Chinese Civil War ended in 1949, a migration that laid the foundations of modern day Hong Kong shipping.
Huxley followed the growth of the newly arrived shipping families such as the Koos, Chaos, Tsaos and Tungs as they built up their fleets with war surplus ships before the Korean War.
Hong Kong’s greater community of 71 million people
“Hong Kong underwent a major change in 1997 with the return of sovereignty to China, but shipping continued to be a mainstay of the city,” he stated. “Looking to the future, the opportunities afforded by the Greater Bay Area and the role Hong Kong can play in the development of this community of 71 million will ensure that demand for the shipping skills Hong Kong has acquired over the past seventy five years will continue,” he added.
Shipping CEO Richard Hext stressed the importance of Hong Kong’s capital markets and the expertise that exists in Hong Kong as being one of the key reasons why the Pacific Basin was able to grow its market capital and become one of the world’s leading shipowners.
All the participants learned that Hong Kong how has a great opportunity for growth as a part of the Greater Bay Area, which will encompass a population of over seventy million and be the driving force behind China’s growth in technology.
“Superconnector” to China
In an upbeat assessment of Hong Kong’s prospects of remaining a major shipping center, all participants agreed with Hext’s point that they must keep getting the story out about both the maritime legacy that exists in Hong Kong and the city’s position as the “super connector” to China.
Panel member Hing Chao stated that “resilience and the ability to adapt are the core qualities of traditional shipping companies in Hong Kong, which over a period of over 60 years have gone through not only many market cycles, but regime changes and global economic crises. Moreover, as most of these companies are family owned, the lessons learnt are passed down the generations.”
In his opinion, Hong Kong and its shipping companies will play a bigger role in global shipping as China occupies an increasingly pivotal position in world trade and shipping.
He fully expects Hong Kong to not only to continue its role as super-connector between China and the world but, “using its unique position and mature maritime cluster, to lead future developments in key areas such as sustainability and decarbonization, and development of maritime technologies, in addition to maintaining its well-established position as a world-class center for ship owning, ship finance, as well as legal and management services.”
2020 shipping “Disrupted on all fronts”
Frank Chan Fan, said in his remarks to the Forum that “2020 is a year to be remembered. The emergence of COVID-19 pandemic not only reshapes the way we live, it also disrupts the shipping industry at all fronts.
“Closure of ports and various forms of restrictions have brought huge uncertainties to ship liners, and leave hundreds of thousands of seafarers stranded at sea. To the shipping industry, it is simply unprecedented.
Since April of this year, he stated, the International Monetary Fund “has made repeated revisions of its global economic growth forecast downward from +3.3% to the latest -4.4%. It would make this the worst recession since the Great Depression in the 1930s. According to the latest World Economic Outlook report published in October, the global economic outlook is going to be a long and difficult ascent.”
However, he also ended on an upbeat note, saying that “Hong Kong has survived the Asian Financial Crisis, the SARS epidemic, the Global Financial Crisis and other challenges over the years. Every time, we fight with all might, we overcome and rise again, and become stronger and more resilient.
“Our Shipping Register, the world’s fourth-largest, has extended its service network through the setting up of regional offices in London, Singapore and Shanghai since late 2019, and more regional offices will be set up in other parts of the world. All these developments have showcased Hong Kong’s status as a maritime services hub, and our commitment to serve the international shipping community.
“However unprecedented it is,” Fan stated, “Now is the defining moment for us to look ahead and chart the way forward. The future of shipping is nothing but bright, and being smart and green is key.
“This is particularly true in 2020, as the COVID-19 pandemic has given the impetus for all of us to accelerate the adoption of technologies. Smart solutions ranging from e-certs and e-communication, to automation, robotics and artificial intelligence are adopted to help reduce manual processes and thus minimize human contact.
“We see a green future in shipping too,” Fan noted, saying “the shipping industry is not only going to use cleaner oil-based fuels, but is also exploring alternative energy such as liquefied natural gas, fuel cells and even the use of solar and wind power, as well as more efficient propeller design.”
The Forum participants learned that the pandemic has resulted in new orders for ships being at 25 year lows. This has also affected pricing, with new building prices at their lowest in the last three years.
In particular, the CEO’s noted, European yards specializing in cruiseships are now in dire straits, as no one wants to order these enormous cruise ships at the moment.
Some merchant mariners not being paid due to pandemic-related lockdowns
Another pressing issue discussed at the Forum is the little-known problem of sailors being stranded at sea, sometimes working far beyond their contracts — and some not being paid at all — due to the havoc that the pandemic has created in the shipping industry.
The key issue here, Captain Zhou, the managing director of Wah Kwong Maritime Transport Holdings noted, is lack of international legal recognition for seafarers as “Key Workers.”
“This is indeed increasingly a humanitarian issue for those crew members trapped on board,” he said, “who urgently need to be repatriated to their home counties. In view of the importance of international maritime transport to the global economy, all governments have obligations to take collective actions to address this issue.
“The most effective way could be setting a set of minimum measures and standards at IMO or even UN level for the compulsory enforcement by all member states,” Zhou suggested.
400,000 seafarers still trapped at sea
Matthew Treadwell, Vice President of Hong Kong & Taiwan for Lloyd’s Register, stated in his remarks on the subject “At a time where the human race as a whole is anxiously waiting for a vaccine, feeling isolated at home often without seeing family and friends, we have to spare a thought for the 400,000 seafarers who are still trapped at sea.
“Seafarers who, since the start of the pandemic, continue to work substantial hours, seven days a week, on contracts that are being continually extended for months and months at a time,” he added.
“These are fatigued workers who labor unceasingly to bring us the supplies that keep the rest of us to the manner we are accustomed to. We need to continue the push for change, not just for today but for tomorrow, and be better equipped and prepared in the future.
“We need to remain supportive and kind to one another, as we all have our battles to deal with. Let’s work together to enable our seafarers to be on the top priority for the vaccine and help bring them home!” he implored the Forum participants.
Capt. Bjorn Hojgaard, CEO of the Anglo-Eastern Univan Group, and Chairman of the Hong Kong Shipowners Association stated: “Shipping is responsible for more than 80% of global trade by volume, including the bulk of all raw materials, fuels, foods and manufactured goods, not to mention medical supplies, equipment and pharmaceuticals.
“The list is long and the situation (regarding the sailors) is untenable.”
Other trends in the shipping industry discussed at the Forum included Machine Learning, Cloud technologies, blockchain, and big data, with many owners and operators seeing the benefits of digitalization.
English Common Law rules shipping in Hong Kong
In a panel devoted to the exploration of how English Common Law has resulted in Hong Kong becoming a regional hub for the resolving of maritime disputes, Arthur Bowring, President of the Hong Kong Maritime Arbitration Group, stated that the use of English Common Law in the city has been a great boon to Hong Kong shipping.
“This is a very exciting time for dispute resolution in Hong Kong,” he noted. “The Hong Kong Maritime Arbitration Group, which was set up as a division of the Hong Kong International Arbitration Center just over 20 years ago, is now an independent society with formalized terms and procedures that are closely modeled on those of the London Maritime Arbitrators Association.
This gives Hong Kong a unique status with the courts of mainland china for interim measures, he explained.
Of the 23 judges there, he stated, fifteen are from overseas. The chief executive has confirmed that foreign judges will not be excluded even from hearing cases on national security law. Hong Kong’s judiciary is one of the most internationally representative judiciaries in the world, he added.
Wellington Koo, the Executive Director of the Valles Steamship Company, opined that in this market, with the pandemic and other uncertainties, it would be “very difficult to have a very long-term planning.
“Instead of having a 10-year planning,” he stated, “one probably needs to have shorter planning, like one year, and adjust year-by-year.” However, he remained relatively optimistic for the tanker market next year and felt that there should be increased demand for tankers to move products around the globe.
All of the panel discussions and events held at the Forum are available to view online, by clicking here.
Founded in 1995, Capital Link is an investor relations, financial communications and advisory firm with a strategic focus on the maritime, commodities and energy sectors, MLPs, Closed–End Funds and ETFs. Based in New York City, Capital Link also has a presence in London, Athens & Oslo.