– Our goal is to see shipping lead the field
‘You represent an industry that has really felt the effects of the oil price drop at first-hand. But now the worst is over,’ said Minister of Trade and Industry Torbjørn Røe Isaksen at NHH’s shipping conference in Bergen.
'Our goal is to see shipping lead the field. We have a sound economy, political stability and a high cost level. This means that we will be early adapters, because we have to start using new technology,' said Minister of Trade and Industry Torbjørn Røe Isaksen.
'NEW GROWTH, PROUD HISTORY'
The Minister was one of the speakers at NHH's Leadership 2018 shipping conference in Bergen this week. The main topics at the conference were the future of the maritime industry, green shipping and digitalisation.
'Seen as a whole, the ocean industry is responsible for 70% of Norway's export values. With more than 1,000 vessels, Bergen is home to Norway's largest fleet. You have a complete maritime cluster, which puts you in an excellent position to contribute to maintaining Norway's position as one of the world's leading shipping nations,' said Torbjørn Røe Isaksen.
'If Norway is to achieve sustainable development, we must restructure the Norwegian economy. This issue went straight to the top of the agenda after the oil price fell,' said the Minister.
THE WORST IS OVER
'You represent an industry that knows all about this – how much a fall in oil prices can hurt. You proved that the industry had the ability to restructure once the offshore orders stopped coming in. Right now, the worst of the crisis is over. We are optimistic, but we note that the ocean industry's turnover is still lower than before the crisis.
We have to be the best at innovative thinking,' said Røe Isaksen. Digitalisation is one of the macrotrends.
Professor and macroeconomist Øystein Thøgersen, rector at the Norwegian School of Economics, also emphasised technological development in his talk at the shipping conference. Combined with greater international political uncertainty, this puts increased pressure on shipping.
'There has been a lot of political risk in the past few years. The ability to handle political risk and uncertainty is important to business and industry. Our industries also need to keep up to speed with rapid technological development,' said Thøgersen.
Harald Solberg, CEO of the Norwegian Shipowners' Association, shares Thøgersen's concern.
'We are particularly worried about protectionism. Many countries think it is reasonable to implement measures that protect their own industries, such as customs barriers. We know that increased free trade will make a positive contribution, also in poor countries. Brexit is also worrying, initially because of the uncertainty about what trade barriers might be introduced.'
According to Solberg, however, certain trends make the around 150 members of the Norwegian Shipowners' Association slightly more optimistic today.
'We are very happy with the proactive policy that the Government is implementing. Our industry is highly globalised. We have Norwegian-controlled vessels all over the world. That means that we encounter all kinds of challenges, including competition from other ambitious maritime nations.'
RANKED FIFTH IN THE WORLD
Updated figures show that Norway (Bergen) is the world's fifth biggest seafaring nation measured in terms of value (and not tonnage), after Japan, Greece, China and the USA. The Norwegian fleet has been strengthened in recent decades to enable it to carry out demanding and advanced operations.
Shipowners have invested large sums in expensive vessels with advanced functions.
The maritime industry employs 90,000 people, and creates NOK 170 million in added value. Solberg and his members believe in increased profitability going forward.
Professor and shipping researcher Roar Os Ådland has a background from the world's biggest shipbroking firm, Clarkson. He was recruited to an endowed professorship at NHH in 2012, funded by Bergen Shipowners' Association. This summer, his contract was extended by another five years, until August 2022.
He is a researcher at the Centre for Shipping and Logistics at NHH. At the conference, Ådland threw some cold water on the most ardent advocates of digitalisation of the shipping industry.
'I believe that digital solutions will become cheap, relatively easy to copy and fast to implement. This will lead to lower prices, and it will happen quickly. That means that you only have a very small window of opportunity. Right now, being a pioneer may not pay off,' says Ådland.
Shipowners have to spend a great deal of time and money on technological development. They must carry heavy costs themselves, but will not get much in return, since other players will be close at their heels, the NHH researcher believes.
SHIPPING AND LOGISTICS
Professor and logistics researcher Stein W Wallace is head of NHH's Centre for Shipping and Logistics. Shipping and logistics have always been two important fields for NHH, and several researchers from the centre gave presentations at NHH's shipping conference this week.
Wallace believes that this research is very important to the industry.
'But, as researchers, our place is early in the value chain. Our job is to find out what works and what doesn't, and to give our students a relevant education. Our studies and research projects will not be of immediate benefit. That's not our world; we are researchers, not consultants.'
The centre consists of a group of shipping and logistics researchers, comprising several permanent researchers, a postdoc and a few research fellows.
Relevant to Norway
'Roar Ådland and I began in 2012, and we have built up this group slowly, but surely. A lot of the group's research activities concern maritime logistics. We are also interested in the logistics of road transport, but the centre's focus on the link between logistics and shipping means that we are becoming stronger in this field – a field that is particularly relevant to Norway.'
'Do you envisage the centre growing in size and strength?'
'I'm hoping for two things. Firstly, that we will manage to secure more projects, which will enable us to take on more research fellows and postdocs. Secondly, that NHH, which now has plans to invest more heavily in business administration, looks in our group's direction. Shipping and logistics are fields that NHH needs,' says Wallace.