The Business Year Special Report
Voices from the sector
What trends are enabling and impeding Dubai’s development as an international shipping hub?
Over the years, a series of international shipping hubs have developed around the world, such as London, Singapore, and Shanghai. Dubai has made its mark thanks to its port infrastructure, most notably Jebel Ali. In terms of the core activities and technical support of the industry, the establishment of Dubai Drydocks has also been hugely significant. The length of time that the Drydocks has operated, and the length of time over which the port and services sector infrastructure has grown, gives Dubai a significant advantage.
Do you think that the climate for financing or investing in shipping is changing?
We have proposed to authorities an investment vehicle that could be directed at the shipping industry, but which would benefit from our expertise. We manage such vehicles for regional institutions and over the years we have done so for a number of conventional and Islamic institutions. Our first local partner was in fact, Dubai Islamic Bank. Aggregate investment volumes have not been huge because the institutions do not prioritize the international shipping market. However, our investment funds have consistently delivered between a net 8% and 12% p.a. through investing in shipping assets, which is an attractive return.
What led to the development of ASM?
ASM was established some 13 years ago. Initially, we manufactured fishing boats; however, the business model evolved to focus on the luxury market of sport fishing and passenger boats. Our passenger boats are also used to transport personnel to and from offshore rigs in the oil and gas sector. These boats can be air-conditioned or non-air conditioned depending on the requirements of different clients. Recently, we have been designing a new mold that will introduce a newly improved version of the passenger boats. Previously, we were focused on working boats for sea transportation, so naturally, we saw a gap in the market for more aesthetically pleasing boats.
How do you see demand developing over the next five years?
Our center-console sport fishing boats are also a significant part of our business. These are very popular for people who are into sport fishing in the UAE or the Gulf. They tend to prefer live bait fishing and usually demand a high-speed craft that has comfortable seating, stabilizers, and plenty of open space. Customers are now more selective about the finishing and quality of the materials used. So, in addition to the typical fiberglass and resins, we use gelcoat. In addition to this, we also carry out stainless steelwork in the factory. The two most popular designs for our craft are Italian and American designs with Emirati touch to meet the needs of our local clients. Over the next five years, we will continue to adopt new technologies and focus on safety, customization, and marine protection, while drawing cultural inspiration from marine fairing cultures like that in the UAE.
How has Maersk Training evolved over the years?
Maersk Training is the result of a reaction to an accident that happened in the energy sector 40 years ago. During the investigation, we found people had the right certificates but not the right competence. So, we wanted to create an organization that was focused more on driving performance and safety in the maritime, oil and gas, and renewables sectors. In the past 10 years, we have grown globally to have 10 large centers around the world and a few other smaller satellite centers. Overall, including these centers and our on-site trainings, we deliver training in more than 45 countries.
How is Maersk Training driving digital solutions and innovation?
There are steps we are taking in terms of e-learning and virtual reality. We are always focused primarily on how we can create a positive impact for our customers. We may trial new technology in close partnerships with specific customers who have certain needs, but there is no one size fits all. We prefer to work closely with them to design a specialized program and obtain specific results. One area in which we continue to innovate is in human factor training. We focus a lot of innovation on how to bring out the best in people.
What can you tell us about Seacor’s JV with COSCO?
Under the JV, we are taking on eight of COSCO’s vessels. Two have already been delivered in 2018 and six more will be delivered in 2019 and 2020. One of the most important aspects of this JV is that the vessels being delivered in 2019 and 2020 will be delivered as hybrid vessels with a battery power pack. We will benefit through reduced maintenance costs on the engines due to reduced running hours, whereas our clients will also benefit from lower costs. Equally significant, we all benefit from reduced CO2 emissions as a consequence of the reduced fuel consumption.
How is digitalization and AI going to affect the industry?
Our operations involve extensive remote monitoring of engines, fuel consumption, and engine performance; therefore, digitalization gives us greater control on pre-emptive maintenance and to plan our maintenance more effectively. If we can have better remote monitoring of our performance, we can reduce our operating costs by being in a better position to predict our periods of maintenance. Online applications and spares inventory control also assist to reduce delays and keep charter uptime of the vessels; shipping is a capital-intensive industry and delays can incur huge costs.