Latest / UnDocked: The Maritime Transformation Show / The End of Easy Globalisation: Bergen Maps the New Maritime Order
Transcript
- speaker-0: thank you so much for coming on the Undocked ⁓ For anyone who doesn't know me, I don't think there'll anyone who doesn't know you, but anyone who doesn't know you, ⁓ who are you? Pia Melling, welcome to ⁓ Nice of you to join us here as we are both in Bergen. So obviously we're good friends, we know each other very well, but for the audience who perhaps don't know you, quick introduction of who you are and who you're representing here. speaker-1: Thank you so much. role. ⁓ Julian Bray, the editor-in-chief of Tradewinds and publisher of Tradewinds as well. speaker-0: Well, welcome on the show. We are here in Bergen, hot off a week in Athens for Macedonia. You spend your life speaking to the market, speaking to ship owners. What is it that you're seeing both at Macedonia and in Norway? I guess the implication that for you on the PCTC market with what China's doing in terms of exporting cars, Nick Chubb: Hello everybody and welcome to this very special episode of Undocked. ⁓ hello Ral. You're back home. speaker-1: thank so much for us on Undocked podcast. ⁓ For in our who doesn't know who you are, would you mind just giving a brief introduction to yourself? speaker-0: Sabrina, welcome to Undocked. Great to have joining us here in ⁓ Bergen. ⁓ For our listeners who may not with you, could you give a quick introduction to yourself? speaker-1: Sure. I'm with the OSM Thome, which is, as you know, one of the larger third-party ship managers and service companies in shipping. And I've been working in shipping my whole life, more or less. Now it's gonna be yeah, 26 years ⁓ in various roles. Ship owners, ⁓ some equipment suppliers and in service industries. And more on the commercial side ⁓ most of the time. Raal: Hello Nick. Yes. Back home after a very productive week last week in Bergen as our listeners will discover. speaker-1: The big issue at the moment is how much risk is building in shipping markets, I think. Obviously, most markets have been very profitable now in this very disrupted and volatile period of the last five or six years, in fact. But more money than ever has been made, quite literally. That isn't just some journalistic prolix. is true. But new buildings have been kept relatively constrained so far. speaker-0: Today I am an active farmer. ⁓ But for not so long time ago I was the Swedish Prime Minister for more than 10 years. Before that I was also Minister of Finance. ⁓ I spent a lot of time in European politics and international politics. speaker-1: Well I'm I'm Sabrina Chao. I come from Hong Kong. ⁓ previously I'm a ship owner ⁓ for my family business, Hua Kwang. I have founded a new company called Sea Capital ⁓ about three years ago now, ⁓ which we are doing business in ⁓ leasing. So ship leasing, operating, lease and finance lease. Nick Chubb: Yeah, it was a busy day, wasn't it? Raal: Yeah, pretty crazy, pretty crazy. First ever Undocked Live on stage, But it was ⁓ an incredible ⁓ event. speaker-0: Yeah, yeah. And what brings you here to Bergen? speaker-1: Well, this is my first attendance actually at ⁓ this ⁓ week. So the dinner tomorrow. We have ⁓ some ⁓ customers here. ⁓ and of course I also wanted to be part of this conference today, which was very interesting and ⁓ also listening to you guys. how many former Swedish prime ministers end up as farmers? speaker-0: and you've traveled a long way to be here, mean, shipping calendar is very, very busy, why was it important for you to be part of the event today? speaker-1: You have this real concern that China is becoming too dominant. Yeah. and you think, believe that the simple solution is to stop dealing with China. Yeah, yeah. ⁓ and you forget that ⁓ they've actually built that dominance over twenty years and it actually caused it will take us twenty years for to fix the problem. And that time you actually need their assets to ⁓ keep ⁓ our world ⁓ moving. speaker-0: I am the only one. But you have had earlier farmers who have ended up as prime ministers. But I am the only one who have gone the other way. speaker-1: I actually have another role. I am actually the ⁓ honorary counsel for Norway, ⁓ in Hong Kong. ⁓ so it's it's always nice to come back to the country that I represent to and and then of course, you know, I'm ⁓ appointed to this b position because of my maritime heritage. So I think there is a lot of synergy between ⁓ sort of like ⁓ a great maritime nations like Norway and ⁓ to China who has an aspiration to really rise up in power to become sort of speaker-0: Yeah, yeah. So tell me about what was your thoughts and reflections on the day? It's been a very packed agenda. speaker-1: to accelerate. ⁓ There is quite a lot of capacity being soaked up by all the disruption rerouting around the Red Sea, obviously around hormones, around the Cape, the problems with Russia ⁓ and them now exporting their oil to China and India. speaker-0: Michael, welcome to Undocked. It's fantastic to have you here in Bergen. I'm keen to talk about what you've been talking about today on the stage at the conference. ⁓ for our listeners who haven't been here, perhaps you could just introduce yourself and what brought you here to Bergen. Nick Chubb: Yeah, it was. I've obviously been a lot of shipping conferences over the years. ⁓ and I think the combination prob probably present company accepted the combination of quality of speakers ⁓ and actually the intensity of the programme for the day, they packed a lot into a very short space of time. ⁓ but I feel it ⁓ speaker-1: Yeah, it was packed but and you know it it is the usual ⁓ topics that we hear these days. ⁓ we still talk about decarbonisation but it's a lot about AI and resilience and and geopolitics. But I think it was a good mix and also some, you know, ⁓ other thought provoking topics like how we spend our time. ⁓ and I re I really appreciate it and ⁓ and it was a very professional ⁓ lineup I would say. You gave a fascinating keynote this morning at BISC and I was wondering if you could share with our audience some of the insight from that. You talked about the cornerstone ⁓ institutions of the 20th century being the European Union, being ⁓ NATO, being WTO and essentially all of that starting to look like it's under threat. Could you just expand on that a little bit more for our audience and what that means for the shipping industry? speaker-0: I think that's to me, of the most interesting things about this is that we don't have an alternative. ⁓ speaker-1: Yeah, I'm a professor. I mostly study geopolitics, especially US China relations, and I kind of float between the policy world in DC and and academia. And unfortunately, when the world gets worse, demand for people like me to talk and come to conferences like this goes up. And so I think it's ⁓ it makes total sense, you know, why you have this big international shipping conference bringing in geopolitical analysts because you've got closed sea lanes, you've got rising protectionism. So that's an artificial prop. If that all comes off, if suddenly it's a world of peace and honey, what happens to shipping? It certainly isn't 2008 again, but people are wary of the situation. Nick Chubb: gave everyone a really good grounding in where shipping is at in the kind of global geopolitical picture, which was nice. speaker-1: Sh shipbuilding is the most extreme, right? Because China today has in in our segments, largely deep sea segments, has seventy eighty percent of global ⁓ output. Yeah. and ⁓ but seventy eighty percent of those are actually delivered to Western owners. Right. Or if you include Korea's yeah ⁓ and and ⁓ there's not not any capacity anywhere. It will take ⁓ of like ⁓ a a force to be reckoned with in in the future. So I think it is important to come and establish that connection and to understand sort of the mentality of the community here and to explore business opportunities. speaker-0: Yeah, yeah, some thought provoking. speaker-1: Yeah, and the death of the manager. Which is good because I'm the I'm leadership. speaker-0: They say that history doesn't repeat itself, but it does rhyme. So you're saying it isn't 2008 again, are you saying by mentioning 2008, are there rhymes that you see? Raal: So we should we should set the scene little bit for those that are not aware. So I think the big, biannual shipping event is down in Oslo for nor shipping which which is exactly one year ago, pretty much last week, which is where you I started this this whole podcast off speaker-0: you They were all created after the Second World War to avoid a new war. And the idea was to trade with each other and to respect each other. How do you feel about the death of the manager? ⁓ And your role today really in the conference, in the keynote that you gave, you were kind of almost representing the whole region, trying to kind of laying out. Can you talk a little bit about, maybe give us a kind of little pen sketch of your speech today and what you were covering? speaker-1: You know, I'm I'm at that age where I feel like I I'm okay. But I I'm actually a s a little bit worried about my kids who are now twenty one and nineteen. Like what's what's what education should they ⁓ pursue? What kind of jobs will they get? What will the market look like in five, ten years? Yeah. I mentioned at the Maritime Bergen conference a little earlier the old quote apparently from Sir John Templeton, the legendary investor, and he said the four most dangerous words in investing are this time it's different. I always stop with that one because I think this time it is different is in fact five words, but let's not be pedantic about it. That's a journalist there. There are good reasons to think this time it is different though. First of all, the world is continuing to grow. ⁓ and this sort of looming great power conflict. So you know that's what I study day to day and unfortunately it's highly, highly relevant for a lot of different industries and especially shipping. years if not decades to to rebuild that capacity. Yeah. And that means that if if we if we stop buying new builds from Chinese yards, we're actually ex we're actually accelerating ⁓ Chinese dominance in Marit ⁓ at sea. Yeah. Because today ch China only controls twenty percent of the world fleet. speaker-0: Small nations have the same right as big nations. Every individual has the same rights and values. That gave a stimulus for trade. And that in turn gave a lot of shipping activities around the world, constantly growing. speaker-1: I think I I you rightly mentioned Raal I I'm like the few Asian represented here today. So I think it is important ⁓ to have sort of like someone representing China and Asia and and coming from what our perspective and how we see the world today in in in terms of like the green transition, ⁓ the world, ⁓ all the geopolitics and all that. And I think, you know, just to maybe give a bit of a snippet of of my talk this morning, ⁓ it is very much about one that is of ⁓ peaceful But you know, we can't plan all these things. We just have to adapt. So that's my philosophy. Yeah. ⁓ and of course we as a ship management company, we are also adapting to to the changes all the time and what our ship owners need help with and and what is happening around us. And that's I think that's the number one takeaway for me. Yeah. Just we just need to change constantly. And and if you are opposing that, if you are thinking that it has to be stable, we just have to continue like we used to do. Raal: kind of thought this would be a ⁓ good idea. 51 episodes one year later, we were back here, we're still going, ⁓ and we were back Norway. Now Bergen doesn't have the ⁓ size of the Norrshipping kind of international community descending, ⁓ but Bergen is probably represented by than Oslo actually speaker-0: it. Nick Chubb: We're still going. speaker-0: Yeah. speaker-1: ⁓ but they control eighty percent of the relevant shipbuilding. So in in in twenty years they will ⁓ take themselves from that's interesting. So so it's a many speaker-0: Now everything of this kind is more or less under threat. I don't say that it will go away, but it is threatened. And that will have an impact, of course, on foreign trade and on shipping activities. Take for instance tariffs. Take for instance sanctions of different kind. Take for instance military threats to speaker-1: is growing, the fleet, this is compared with 2008, 2008 to 2026. The world is bigger, it's more complex, this is an era of disruption of course. Critically, the sector specific booms you've had in shipping over the last four or five years, first of all dry cargo, you remember with the lockdown and then containers coming through lockdown, then the oil and gas business after Russia, No w no one wants to think about security. You know, it'd be just great if we could just like move along and keep focusing on our core business. It's sort of like buying insurance. You know, it's like, gosh, do I really have to check this box, you know, when I rent a car or whatever. But unfortunately this is the worst. speaker-0: I guess the way that the state-driven market works is that if ⁓ western countries stop buying Chinese-made ships, state-backed ship owning will pick up that slack. There's no way those shipyards will be left. speaker-1: And I think that's what China wants ⁓ to represent in the world, that we are a nation who mind our own business. ⁓ We don't like people to mess with us, yet we don't mess with other people. We are there to establish mutual respect and to explore mutual collaborations that will thrive in a win-win situation. That will be the death of you as I see it. So I think adaptability is basically number one ⁓ choice. Raal: so it's a different type of event. It's a much more intense, much more owner led, ⁓ more Norwegian centric ⁓ but it's organised by Maritime Bergen, speaker-0: But I think what you did today kind of really explain ⁓ why we are where we are in a way that I seen done before. And it was in very stark terms. Obviously you relied on quite a lot of graphs and so on. if you could just walk us through a kind of, you know, ⁓ sort of the narrative from this morning, because I think it'd be really great to share it without all your... Yeah, I was asked for a word in ⁓ Cyprus shipping week, I think it was last year, someone said, one word of, know, and I chose improvisation. I think that is really what we're talking about here. And that's sort of, it's a difficult thing. Because I think that's one of the challenges that we're asking a lot of our seafarers now as well, to sort of be able to respond correctly when the rule book sort of... speaker-1: No, I think it's I think it will basically I mean they will definitely grab there was actually that I mean I think ⁓ Julian was saying that but there was second half of last year basically speaker-0: different routes and so on. It's a new situation. speaker-1: Russia Ukraine and now with Hormuz. That has ⁓ helped companies... ⁓ speaker-0: Yeah, one of the things that struck me quite hard was your comments around China valuing the world-based order. Because I think there's a bit of a perception sometimes in the West that China has something to gain by the kinds of conflict that we're seeing in the West and there's sort of being a fragmentation in old alliances. you sort of argued against that pretty strongly. speaker-1: When I look at shipping's role through the 20th century, it's felt like a sort of quiet infrastructure in the background. Not many people know about it. And I think perhaps as a society, we take advantage of it as an industry, generally speaking. In the face of everything you just talked about, I feel like the shipping industry is increasingly losing the narrative on the power of globalization to enable peace and to lift people out of poverty. strengthen their balance sheets more than ever before. I saw a fascinating statistic recently from one of the brokers. were pointing out in 2008, excuse me, eight, Merck had about 20 billion in debt and only about three and a half billion in cash. Today, it has much the same in debt, about 17 and a half billion dollars, this is, in debt, but it has, guess how much cash? 17.3 billion. Seventy was the the the the inflow orders it in China ⁓ kept up but but seventy percent of them were actually Chinese. But that bec that was because after Liberation Day and this ⁓ port fees and everything. Yeah, yeah. people stopped ordering. Yeah. But it came back at the end of the year because people figured they were they didn't I mean ⁓ people were looking around for alternatives, but I mean, for me, it's sort of it started as like a personal puzzle because I came of age in the 90s when it's all about globalization and democracy spreading, and it just didn't seem like you'd have a major war. And here we are in 2026 in a very different world. And so I've long been thinking about what are the big structural factors that have gotten us from one place to another. Because so much of what I read in the media just kind of zeroes in on like very specific things, like, ⁓ Trump did this or Putin did this or whatever. And so the more I looked at it, the more I realized. speaker-0: It's been torn up. And we're having to do that, I think, as an industry. We're sort of having to navigate what is now becoming a really very difficult back. speaker-1: But I I liked what you said about how competency can change and what you said on stage and ⁓ you know all the classroom training that we've done, all the modules that we completed, and also you know, the a whole education system is probably very much behind in terms of how we need to consume ⁓ knowledge and competency and learn new skills going forward. So that's gonna be a very interesting area to follow the whole training of seafarers and and us of course. I I think it it comes from, you know, something a l a lot more deep rooted in into sort of like the Chinese culture that we are not there to impose. You know, we are there to represent us, you know, we are a peaceful nation. We are here, we want prosperity for all our people, but that's our priority. We are not here to meddle in other people's business and we hope that you will also re respect and do not meddle in our business. And that has always been sort of like Chinese ⁓ diplomacy. I think ⁓ it it's not just now, but like you can actually trace trace back, you know, hundreds. speaker-0: Andreas, for anyone who doesn't know you, ⁓ could you just give us a brief introduction of who you are and the organisation? speaker-1: What advice would you give ⁓ leaders across the shipping industry on how to ⁓ be better at telling that story and sharing the narrative with world leaders? really wow so cash has gone from three to seventeen debtors come down a little bit and that is I thought that's a that's a fantastic emblem of the situation industry so even if my name is Andreas Enger. I'm ⁓ Oslo based and CEO of Hercotliners. I'm also president of the Norwegian Shipowner Association. So have this sort of double That there's a relationship between the growth and the global economy, the ability of lots of different people around the world to make money, and the amount of political conflict you tend to see. I mean, this is just human nature. When the money's flowing, everyone's getting along, everyone's cooperating, you don't want to kill your business partner. But once you know things start to tighten up, you know, everyone starts trying to grab a bigger piece of a more stagnant pie. And when you look at the long-term trends, I mean, unfortunately, I can't show all these different charts. Yeah. You've just seen speaker-0: I think that the shipping industry is so big so they can take the lead in special sectors. One idea expressed by the Chinese participant today from Hong Kong, Sabrina Chao, was that... Raal: I think you'll see in the show today, ⁓ as we share some of the findings from I think, ⁓ you know, very valuable and diverse speaker-1: Even if markets suffer from the end of some of this disruption, the resilience in the industry and frankly the operating resilience have haven't got through the last few years, but the cash resilience as well is going to be far, far greater. then their support for their new building orders, which again are their less than half what they were in 2008, is going to be much stronger. speaker-0: two hats on today. Very nice. And with your Norwegian Shipowners Association hats on, tell me about Bergen as a maritime cluster and why days like today are important. Nick Chubb: Yeah, and we we decided as as well as recording our own undocked live episode, ⁓ which will come out next week, ⁓ we also decided that we were gonna steal all the speakers as they came off the stage and and sort of whisk them off to a to a side room ⁓ for a quick undocked interview. So this episode is actually packed full of interviews ⁓ from the great and the good across the shipping industry. We've we've got we've got ship owners, journalists, we've got political scientists, we've got speaker-1: Yeah. speaker-0: historic commitment to The other thing that struck me and I sort of made a mental note of it and I'm probably slightly misquoting it so give us the proper quote but I think you said something about the commitment to sort of decarbonisation and greening of the shipping industry was part of the identity of Chinese shipping. I hear that correctly? The shipping industry could take the lead in the green dimension to go for green transportations, to go for green investments, to go for green innovations, to be the modern leading way of transporting goods and talking about it themselves. speaker-1: I mean Bergen is obviously a very, very important center for Norwegian maritime activity. ⁓ I think they they they label the set the self set the maritime ca ⁓ capital and w whether whether or not you can discuss that definitely is definitely it it's it's a very rich culture here. Yeah. You know, there are lots of great companies. Yeah. And I think they're they're it's it's I I think it is the place in Norway where you have speaker-0: We interviewed the CEO of Global Ship Lease, Tom Lister, probably a couple of months back now, it's a very similar story. They're gearing, their balance sheet is looking very, very cash heavy, and I asked about it, and he said we are just waiting for there to be blood in the water. that's, know, as soon as we're in that situation, then we can start deploying the cash, but right now is not the time. speaker-1: This secular slowdown in economies all across the globe, and it's all different types of economies. Advanced economies have had it the worst, but even some of the emerging markets that were booming in the 2000s are now having severe and sustained economic slowdowns. And when you dig in, you see it really makes their internal politics much nastier because everyone starts pointing the finger at each other. For dictatorships, they have to worry about their legitimacy at home if they've relied on, you know, hey, I'm the one that gave you better livelihoods. And then you see them start turning on. Yes, very very much so. Very much so. I I think, you know, in in terms of like the commitment to green and and I think that's where I I keep going back, you know, to to my speech and also on the panel as well, that ⁓ that regulatory certainty is so important because, you know, as as I think most most people know that China is very good at building infrastructure and like the whole ramp up to decarbonization in terms of biofuel, methanol and all that, all that is ready to go. ⁓ but Nick Chubb: politicians. and and they're giving their view on the state of shipping, ⁓ where shipping sits in the world ⁓ and ⁓ and and what the future might look like. So there's ⁓ there's there's a lot to cover in the next hour or so. speaker-0: telling about their own history. If they do so, others have to have an opinion about the shipping industry. And then it is quite difficult for others to say that the shipping industry is going in the wrong direction because everyone knows that this is in the best of interest for the next generation. So the shipping industry could link themselves to the speaker-1: But I think actually on that one, this time it is going to be different because arguably there won't be so much blood in the water so quickly because people will be able to cling on for longer. You'll have those zombie companies in dry bulk, they went from 2008 to 2014 clinging on until finally something horrible came and stamped on their fingernails and they had to let go. That was six years, I it could be 10 years with the amount of cash people have on them. maybe detra developt ⁓ you know total social environment and the whåving. Så sa itsa it is it is and then depending on which ⁓ shipping segment you look at the det may or may not compete with the same plats för this. But but but they have a väld kompet ⁓ komplet maritim Raal: Yeah, absolutely. speaker-0: But one thing I did want to talk to you about, because you've sort of taken on the role now with Tommy moving up to CEO, you've taken on the Chief Services Officer role at OSMThome And that seems to me to be a very, very interesting example of evolution of ship management. speaker-1: foreign countries ⁓ as well and for china and russia in particular I mean I think Putin and and Xi this threatens their long-term ambitions, you know, to kind of reconstitute their their broader empires. And so I think it's no randomness that they've really gone on the aggressive military front as they have fewer and fewer economic carrots to try to get other countries to give them concessions. it hasn't gone ahead is because we don't have that regulatory certainty. For example, what really constitute as green. ⁓ what we think is green might be constitute as grey in in in in some people's mind. So what how how how is that ⁓ so so I think you know it is very important that you know that China is already think like decades ahead that you know we will get there. Not twenty fifty, China is saying twenty sixty, but we have a roadmap to get there. But we just kinda need to know speaker-0: future doing investments in new equipment and technologies being the green way of transporting goods. Well, and you've got the pressure of a fleet that needs to be renewed as well. So it is not, we don't have the option to just sit and wait. speaker-1: cluster. Yeah. Yeah. ⁓ with ⁓ some ⁓ lots of tradition and ⁓ and and and you know very capable ⁓ companies. speaker-0: and it's becoming more and more of an area of growth within the ship management sector. So I was wondering if you, I mean how long you've been in role now? Yeah, you talked about those tailwinds, three big tailwinds have been propelling us that are all kind of running out at the same time speaker-1: But then even the fleet renewal piece in 2008 I think is about 50 % of the existing fleet that's on order. Today, the fleet is nearly twice the size, but it's only 20 % of that proportionately. containers it's 38-40%, LMG it's 40%, but tankers, even after the slew of tankers this year, it's only about 20%. Dry bulk it's only 13 % I think, figures we were looking at last week. wonderful advice and I really appreciate your time. speaker-0: You were on a panel this morning, a sort of CEO panel, which I really enjoyed. And a big part of the discussion was around decarbonisation and the ⁓ Western and by that, mean, really sort of European and American approach to decarbonisation. Has it kind of hit the buffers and what is the likes of China doing when it comes to decarbonisation? And actually you mentioned quite an interesting gap between where Europe and America is today versus where China is. Thank you. speaker-1: Just since January. So it's ⁓ yeah, student six months. speaker-0: What's your reflection on that part of the business that you're now running? speaker-1: It's very interesting and and most of the large third party ship managers they do this and they have they have ⁓ more rapid growth in that area. ⁓ And what's interesting me is to see that ⁓ the smaller and medium-sized shipowners they're now struggling more to do everything in-house. ⁓ And ⁓ of with new regulation ⁓ popping up, ⁓ with technology change, with ⁓ digital transformation, ⁓ everything is becoming more complex and it's also difficult to get ⁓ to train the crew and at at r and retain. and make sure that what we deliver is actually what the world also wants. speaker-0: Yeah, I think there was ⁓ some interesting kind of dynamics on the panel talking about the fact that we have seen, we can't deny, a slowdown and a bit of backpedaling in the West. And we assume that that's a global ⁓ picture, but some of the other people that you shared the stage with on your CEO panel made that point that actually when they go and they travel out in the East, it's a different thing. What's really driving that commitment ⁓ in China? speaker-1: Yeah, so I mean the the three main factors were ⁓ we used to have very truly transformative technologies. And when everyone's implementing the industrial era technologies and they're spreading all around the globe, you just get you know ⁓ shooting star kind of levels of economic development because you're taking ⁓ you know peasants and they can now work in factories, you have roads, you have logistics networks, you have electrification. That makes a massive impact for economies. And it also leads to a big boom in population. And so you see this huge surge in the global population. those core areas, they're not overbuilt. And even with the containers, just to just go on about that for a moment, they are the container lines, you know, unlike previous eras, they are managing to control their pricing. Yeah, they do have the power of the the big lines is clearly stronger. They have presumably driven by data. Yeah, know, digital ships, key thing they they have a they have a finer control ⁓ on the on their pricing so they can speaker-0: to just elaborate on that for the podcast. speaker-1: ⁓ if a little bit of context to it, right? I mean there was great beliefs and high hopes in the sort of decarbonisation interested part of the industry. Yeah. That IMO should get together right what could have been, you know, the most effective ⁓ global level playing field for driving car decarbonisation, right? Because shipping has this unique benefit of having IMO that is regulated with real teeth and getting decarbonisation into that framework. The crew. So in this ⁓ might be more interested in outsourcing parts of what they have done in-house before. ⁓ what we offer is this. ⁓ you can run your own in-house ship management, or you could offer ⁓ running the ships, but you could you could still buy of these scalable services that we offer where we have specialist knowledge but also the economies of scale. And I think if you look at, for example, ⁓ lube oil which is now Raal: geopolitics really dominates ⁓ most of the shipping agendas in a way that it done certainly in my memory. And now and this year, been been the focus. And so it won't surprise anyone. speaker-1: I I think ultimately, you know, if you look at China and our development as well, you know, a lot of our cities only came about in the last twenty to thirty years. So that greenness or like, you know, ⁓ the electrification is very much gone into the planning of of a whole city in in many ways. So that is why in many ways in many ways China it's can can go through this step much easier and of course we don't have the kind of democracy that you have in the West as well. So it's very easy when you say, Okay, this is how we're gonna go and we're just gonna go Population, which from an economic perspective just means a lot more taxpayers and consumers and ⁓ and workers. And so that also helps propel that boom. And then you have the globalization, especially after the end of the Cold War, all these economies being integrated. And so you just have billions of people linked together. But now, and what I focused on in the talk that you're you've mentioned is just each one of those tailwinds has really turned into a headwind recently. Globalization's eroding. We've kind of like picked all the low hanging fruit of just implementing basic industrial. Raal: that that was the backdrop. But I think what was different for me was ⁓ the quality of conversation around the geopolitical elements. And I felt that I don't know what you think, but I felt like I came away with a better understanding of why we are where we are. speaker-1: manage that supply side better. speaker-0: Yeah, and I guess actually it is a, the container market is a much more consolidated market than it was 15 years ago. Julian, thank you so much. I'm looking forward to the rest of the day and seeing you on stage later. speaker-1: work in a real way with teeth, which was the proposal, would have really changed the game. And when that Yeah, indeed. ⁓ A scarce resource, of course, also very expensive because of the war in the Middle East. If you have very good relationships with the suppliers, you will get preference when you need a supply. And And there was some disagreement in the European circles, American circles, whether that was good or bad. Yeah, yeah. But but you ⁓ but and then when it was blocked largely by by the US being very actively opposed or postponed in reality, but but then you know ⁓ there were ⁓ some relief with some of the people that this is now over. Yeah. ⁓ and ⁓ deep depression with others that ⁓ now we don't get what we hoped for, right? Yeah. Thanks a lot. And doing it and funding is not really a problem, and then you can just go ahead and do it. But whereas, like you know, even for ships, for example, that when you build from scratch, and whether you want to retrospect, it's a much more expensive exercise to do, and I think that's where ⁓ in many ways China can is is man we are managing to deliver on a lot more ⁓ in a very short span of time because in in many ways we we skipped the last 50 years in development and and it's probably easier to Nick Chubb: Yeah, I I I think from a the perspective maybe this is a good starting point would be Michael Beckley, who is an American political scientist. And I think ⁓ the European centric view and and probably dare I say the Norwegian point of view ⁓ is one of of bewilderment about speaker-1: Industrial era technologies, and so far AI hasn't you know really boosted productivity as much as we'd like. And then it you know, two-thirds of countries are basically having shrinking populations at this point, and it's only going to get worse because that's actually a knock-on effect of industrialization. You know, we all move into apartments or whatever, and people stop having so many children. ⁓ and so now, unfortunately, we have these smaller and smaller generations coming up. So it's really sucked a lot of the boost that we had that we basically enjoyed for all of our lives prior, and we're only now really. to be part of a bigger group when these kind of crises hit ⁓ the economy it's is beneficial. And of course when we look at ⁓ how we ⁓ work with ⁓ with ⁓ with our crew as well ⁓ both in making sure they have enough ⁓ medical support and psychological support and the right nutrition through our catering ⁓ services this is this is really adding ⁓ to ⁓ crew welfare and crew retention and it's of course also So so it has it suddenly became a very much more negative sentiment. Yeah, yeah. ⁓ but what I found speaker-0: So I mean, I think you hinted at it, but I'd like to sort of make sure it's concrete. ⁓ When you talk about like what you want to see in terms of that commitment and clarity, is it as simple as something like the net zero framework actually going into statute, or is it more than that? Nick Chubb: Trump, America First, MAGA and and why that movement exists at all. And what I loved about Michael's perspective was actually an ability to explain it in a way that it becomes slightly less bewildering, ⁓ and and it be and becomes just slightly more accessible to understand how we are in the world we're in. ⁓ speaker-1: differently. I mean I'm I'm seven, eight times a year in China and spend a week every time and spend time with lots of our Chinese partners and and stuff. So yeah and we I mean we have some very very important ⁓ Chinese customers. ⁓ we're not allowed to talk about them but you know most you you know who they are. But ⁓ and it's ⁓ many of them, both on equipment and cars. ⁓ and we spend a lot of time with them. And and what I figure about a year ago when we are all hoped for IMO, it wasn't really so much movement in China. Yeah. But then I saw gradually now Limiting issues on board that can be costly. So I think we are growing quite a lot, But our existing customers that we run the ships on technical management and we have their crew, ⁓ of course, it's ⁓ to bring the OPEX down for them and to make sure the speaker-0: Yeah, I think Nick and Nick and I on the show, we kind of fixate about things like AI and what this is going to do and how it's going to transform. I your talk was rather sobering in that regard. You kind of talked about the fact that we've we've had the big change. That was the Industrial Revolution. And you talked about the real and resonating impact of that. And you were slightly, I guess, skeptical about what real impact things like AI are going to genuinely have. speaker-1: Yes, I I think that's a very good starting point. I think you know it it it always has to start with the framework first and then you go into details. ⁓ personally I'm I'm not a big believer on on sort of like the the penalty side of things because I don't really see that as adding to any value ⁓ to the whole decarbonization agenda. It might be an incentive to do so, but I don't think that it it's a value add proposition. ⁓ but but of course any framework that comes to be ⁓ ⁓ what's happened is that ⁓ they've they've scaled up production of ⁓ ammonia they're continuing so I mean they they do this sort of five year plan organized ⁓ sort of ⁓ communist program and they they they are on a long term tr trajectory yeah and really the IMO hasn't really affected that. So while while ⁓ you know part of US has gone into excitement that it's over some of the European I mean, AI is fantastic. I'm just saying, compared to the industrial revolution, so far it's been relatively small potatoes. I would recommend the work of Robert Gordon, who's an economist at Northwestern, who wrote this massive book where he just went through all the industrial era innovations because it goes, runs the gamut from public health, because of sanitation ⁓ to obviously machines and transport and communications. And I think the big thing that sets the industrial era apart from AI, AI is a very good coordination. ships have a more uptime and that they are more commercially successful. That's that's the goal of bringing in these services. can be manipulated in in in or you provite people from different different different different aspects. So I think it is very important to agree on a framework. That's the first big step. And then of course ⁓ there's a lot of details to be sorted out as well. Especially, you know, I am a ship owner, you know, coming from sort of like a more operational practical point of view, that it has to work and deliver on a framework that really achieved the goal that we have in mind. ship owners have gone into depression because it's not happening and and China has just been grinding on. Business as usual. ⁓ but then it's a other very important part when when you talk about particular there's been a huge debate on on making alternative fuels, right? Technology. It helps us coordinate activities. What the industrial era did was not just have new ways to coordinate through like the telegraph or the telephone or global shipping, but also it was a massive energy transformation. Our ability to harness energy just went off the charts once you started using fossil fuels. And so ⁓ unless AI can somehow then create a fusion revolution or some some change in the energy capture for humans, it I don't see it having the same type of economy-wide impact. speaker-0: So your message would be more carrot and less stick. Yes. And do ⁓ you think the world has much to learn from shipping in terms of the kind of collaborations and global networks that we've established in this industry? speaker-1: And ⁓ the main argument, the main valid argument against it is that in many ways a very inefficient way to use green electrons that you can put on a grid and do whatever. Yeah, yeah. But what has changed also during the last year is that China has so much capacity of building solar and wind power. Right, okay. So now they're scaling electricity generation much faster than the grid. Interesting. So so they're building they're now building at scale off grid Yes. ⁓ Raal: connectivity shouldn't mean more complexity. IEC Telecom's OptiView gives you complete visibility and control over your onboard network. speaker-1: ⁓ I I I think so. ⁓ I d I I think sometimes ⁓ when when we look at shipping it it it it is i in many ways quite quite a fascinating industry that, you know, we as a whole industry agree that we should all go into net zero and and hold ⁓ decarbonization and and and and all of us once to reach that goal, we just want to make sure that, you know, there is a roadmap to get there. Whereas you don't really see that in many other industries where you kind of like that you had. That's not to denigrate I mean, the f no other innovation in in history has come anywhere close to this, so that's not to knock AI, but it's just we need to keep some perspective. Raal: Designed for maritime environments, it allows you to manage bandwidth, prioritize critical applications and optimize performance across your fleet. All from one intuitive interface. No guesswork, no wasted bandwidth, just smarter network management. Because when you can see everything, you can control everything. Take control with OptiView from IEC Telecom. speaker-0: I think that was it. Yeah, you weren't weren't nagging on AI. You were simply trying to frame it in and against the already downward pressure. It's not like it's not just that it's not going to be incremental. It's just it's it's facing. looking for. speaker-1: Renewables. And the only way to monetize off grid renewables, in or the best way at least, is to is to turn it into hydrogen. And to and if you if you if you want to take the hydrogen further away than you can pipe it, ⁓ the most effective way is to turn it into ammonia. Yeah. So so so suddenly you got this kind which which is actually not driven by It's a dual revolution. So you have AI getting better, but you have humans shrinking. And so you know, some of those charts showed that just the shrinkage of that population is going to require massive productivity increases or just require all of us to work many more hours, those of us that are left. And it's just very hard for any innovation, even something as ⁓ amazing as AI, to just easily make up that shortfall. siloed into like very narrow short term vision. So ⁓ that that I think, you know, it's something that probably we should t all take away a little bit that, you know, you need to have a much further goal rather than the next two years. demand for ammonia as a fuel is driven by the ability to to to s to build very very cost effective ⁓ renewable generation capacity ⁓ and that that is ⁓ become much more scalable than you know building grids is much much more cumbersome. Yeah it takes longer time. So so so you come into a situation and all of that has happened at the same time as the IMO process collapsed, which which creates very, very different dynamics in ⁓ in the sort of China space and in the speaker-0: So. Thank Yeah, it's almost like national interests are getting in the way of the kind of cooperation that Shipping's enjoyed, certainly in the whole of my career that I've been involved with. They should listen to us, that's my message. If there was one good thing that you would like to see, one big change that you'd like to see in the industry, what would it be? You also joined a panel which I just caught as well, which was interesting and you made some comments. think you were the conversation that come around to decarbonisation, which is always a big, big topic in Bergen and Norway more generally. But you had some sobering kind of ⁓ advice on that, not as someone. speaker-1: Yeah. I would like to speaker-0: does that leave ⁓ Alta Land is now in terms of ⁓ as an alternative fuel and what your plans are? speaker-1: See people meeting together and getting together much more often. I I know that, you know, in the world of technology, everyone's so easy to jump on a call and do video call, but I think nothing beats meeting and really going and seeing places and really understand the the kind of progress and ⁓ commitments that each that all of us, you know, represent and come from. So it is very important to have that human aspect. speaker-0: I'm not going to paint you as a climate-spec skeptic or anything like that. You were positive about that, but you had some sobering thoughts on how we approach it from here. speaker-1: ⁓ we have we're in the middle of a twelve vessel ⁓ new build program. Right. The first eight has already been delivered as ⁓ ammonia ready, but actually running dual fuel LNG. Yep. And those are those are in operation. Yeah. The next four are ordered with a dual fuel LSFO ammonia engines. Really? And the first of that is going to be delivered next summer. Okay. Not this but in the in the year in the year. ⁓ and that is going to use ⁓ be able to Right, so the question was about are you gonna get this global agreement to just get everyone to adopt net zero? And unfortunately, I feel like the EU already tested that. So I think the EU's assumption was we adopt stringent climate regulations and the rest of the world will eventually follow. I would encourage anyone just to Google ⁓ China's CO2 emissions, and they're just gone off the charts. And Chairman Xi has said numerous times: we're not gonna condition our energy usage or our economic development on some kind of foreign body. So it always have that I think in shipping. ⁓ but it is important to remember that and continue with run ammonia but in a dual-fuel mode. So we will only do it whenever, you know, cost and customers and demand allows it. And it and and we we are fully committed to that. We will take delivery on those four vessels. But I think we also the the delay or the derailing of the IMO process will make this process speaker-0: And you've certainly proved that by traveling. And to contribute into this podcast with us as well. speaker-1: Yeah. It's not, you know, decarbonization is great. Somehow we have to figure out a way to make this type of transition. I'm just very skeptical that when we talk here in a beautiful place like Bergen or even in Washington, DC, about some kind of global rules and assume you know Russia or China or India or any of these other major economies is gonna go along. If I can if I may, you know, we Hong Kong we have a maritime week in November as well. So I wish that, you know, all of us can come see us and visit Hong Kong and see China for yourself. speaker-0: That sounds like a great challenge. Challenge accepted. Thank you very much. speaker-1: Thank you. longer and a bit more cumbersome, right? Yeah yeah. So so for us we are s we still have we have an objective of ⁓ being ⁓ net carbon neutral by twenty forty. Yeah. We're not change we're not changing that. Okay. But and it we we believe that the direction of travel is clear. Okay but but but I think we will start more carefully in the beginning. Yeah yeah yeah and scale up ⁓ more over time. But but we are we are on that track. But we will run. I mean we we we will continue to run on L S F O we will continue I just feel like the EU already tested that. No one followed them. And then the EU is stuck in a situation where they're importing 60% of their energy and half of that is coming from Russia. And then Russia starts invading a sovereign European state. I mean, it just shows you you can't ⁓ you can't ⁓ forget about security as you're also trying to move to these noble ⁓ climate goals. speaker-0: Yeah, your point, no one wants to think about it or cares about it or is very excited about it, but it's defining this particular era that we're in now. speaker-1: to have LNG vessels in operation. We will we are using already lots of biofuel. We are chasing bio LNG for the ⁓ so so I mean I think it's it's it's it's part of a mix but we we we we will make the step into into ⁓ ammonia ⁓ next summer which will be ⁓ next year we ⁓ which will be one of the first Right, it's it's one of the downsides of being ⁓ someone who works in the national security space is it's like, look, I know n no one wants to no one is happy about this, right? Like I it's not like anyone's like great, we get to rearm now, but it's just unfortunately sometimes the world becomes more dangerous. speaker-0: Is this affecting the number of dinner parties you get invited to? speaker-1: Yeah, I I get invited once to a lot of dinner parties, but I haven't gotten a lot of reinvites, so maybe that's why I hadn't thought about that. speaker-0: I've got one more question for you. noticed when I saw you were speaking, I did a bit of research. I noticed next year is the 100th anniversary of Ho'ol Tala. So two parts of it. One is, what do you think has made the organization sort of resilient enough to be in the market for 100 years? And then second, what does the next 100 years look like? I think there's always a gap between ⁓ what people want to hear and what they need to understand. And I think that's one of the things that I thought was really good. But I thought what was great about your presentation today is it made it easy to understand things that I think we're all struggling with. Like you said, we'd like to pick off heroes and villains and have a simple narrative. the reality is we're going into an era which is just plain difficult. have things that gravity is coming to bear. the first of the services you were running with Vigo, ⁓ very focused when you launched that everybody's eyes were on decarbonisation, fuel efficiency, all those sorts of green related subjects. And as we've heard today, ⁓ I think Norway still ⁓ the flag for those but we've seen that the focus has inevitably shifted ⁓ with a lot of geopolitical and so on. ⁓ How do you feel about sort of business at the moment? speaker-1: Yeah. Start with the first you know, family for the previous ⁓ one of the previous anniversaries ⁓ made a very great book on the history actually, which is quite good. Okay. The title of the book is Shipping Through Cycles. Okay. Wow, okay. And and I think there has been a still I mean one of the things that ⁓ has and and we were a family company mostly up to up to the IPO'd in twenty twenty one and family is still still the largest shareholder and and and very active in the company. I think it hasn't really shifted. I mean, the the renewal renewable fuels or the new fuels, that has been maybe that balloon has kind of ⁓ lost some of the speed. But ⁓ what was mentioned also by ⁓ by Haral in Notfill today is that ⁓ what he said, 75% of the fleet has has not really engaged in in meaningful energy-saving ⁓ technologies, I guess. I assume they are slow steaming and so on. But that's huge potential. And we see a lot of ship owners interested in this and they speaker-0: What would you like to see happen for us to marshal this age and try and get the best we can at? speaker-1: Yeah, I mean I think in the short term, ⁓ you know, if you live in ⁓ you know, a democratic country, ⁓ the West, as we sometimes call it, ⁓ I think you have to recognize there are short-term dangers. Obviously Russia is making that very clear, and I ⁓ worry very much about China ⁓ making a move on on Taiwan or maybe on the Philippines. And so unfortunately we're just confronted with the situation that there are real potential and actual aggressors ⁓ on the round. And so we have to do what our predecessors did. Raal: so that was ⁓ Michael Beckley there, political science and tenured professor at Tufts his rather sobering view of the ⁓ state of affairs are underpinning. speaker-1: ⁓ but But I think what what has happened, they have had the ability to adapt. They've changed segments. ⁓ have been innovative. I think for since the nineteen sixties. I mean we have a Volkswagen Beetle on the floor of our office ⁓ in the in in in in ⁓ Oslo. And in ⁓ in nineteen sixty one sort of ⁓ car car the vehicle freight at scale started with ⁓ shipping beetles from Germany. Raal: I guess a lot of the geopolitical situations we're seeing. What's your thoughts on that? speaker-1: Are doing it, but maybe a little bit less talk about it. ⁓ And ⁓ and Evigo is ⁓ positioned to be a ⁓ advisory for these owners and also to be able to run the whole project so that we could give the ⁓ advice on what kind of technologies would would work for your ship and your trade, and then we could get a good Nick Chubb: Well, it's a bit depressing, isn't it? I don't wanna be ⁓ all doom and gloom, but it's kinda hard to come away f it was hard to come away from his talk and also to come away from that interview ⁓ that you did without feeling slightly depressed. Raal: You speaker-1: Multiple times there were these coalitions that came together to take on Napoleon, to take on Imperial Germany and Nazi Germany and the Soviet Union and contain them. I'm hopeful that we can do it through the process of a cold war, which is not going to be great, but it's better than a hot war. And I just worry that if we leave ourselves prone, it just becomes very enticing for Putin to move on to the next European state or for Xi Jinping to think that he can try to take Taiwan back by force. So in the short term, it's about kind of circling the wagons, ⁓ Raal: I did my best to try and introduce some levity, did try to be upbeat at the end there, it ⁓ was a bit a mic drop presentation and everyone kind of went a little bit like. ⁓ speaker-1: ⁓ deal with that supplier because of our size and we could also run the whole project in terms of engineering and dry docking and installation and follow-up later. So that's ⁓ definitely a demand for that ⁓ still speaker-0: dawning on me that, yeah, when the business started, the PCTC wasn't a thing. speaker-1: But they've been in oil tankers, been in liners, they've been in all kinds of I mean they're obviously in gas. I mean they they it's not two separate companies, but they also have the Hurg Evi which is a major energy supplier to Europe through the FSRUs, right? So it's a they've been the company's been through a host of different ⁓ segments. Yeah. And I guess speaker-0: And it's a very complex picture, isn't it? If you look at the success stories, you mentioned Odfell, the Bauer Olympus, for example, what they did there. It's a combination of lots of tweaks across lots of areas from AI weather routing to biofuels use, modifications, wind assisted propulsion, suction sales. Nick Chubb: Yeah. speaker-1: Having more defense and industrial cooperation among Western democracies in both East Asia as well as Europe. But in the long run, I think, you know, I really think it's gonna eventually lead to a better future. I really, I really do, because yes, we had this period of rapid economic growth. It also caused a lot of upheaval. You know, there were massive revolutions going on throughout the 19th and 20th century. The world wars happened because of the rise of new great powers on the scene. Now we're kind of moving to this sort of geriatric situation where everyone's gonna. Nick Chubb: His his his upbeat ending, ⁓ which I'll I'll paraphrase was essentially that sh shipping needs to become much less focused on efficiency, much more focused on resilience, and shipping should become much more visible ⁓ on on on the world stage. which I think is something that we would we would wholeheartedly agree with. ⁓ speaker-1: I don't have that history clear enough, but but the car carrier business started kind of in the sixties, but then was still racks into bulkers and those kinds of things, right? And then then into the ⁓ seventies, eighties you started to get the the specialized Aurora vessels and and so the family's been in the in the f I think in the forefront of those developments. And we have, I think, ⁓ multiple times during that time launched new concepts that has been the largest and most advanced and the Aurora class that we're building now was the And then for us to be ⁓ you know, the practitioner here, because there's a lot of theory on how these things will work. ⁓ mostly they ⁓ promise more than ⁓ can be measured. But then also in combination, how do all these ⁓ if you put on sales and a few other technologies, how do you actually make sure that you can maintain this, that you have the spare parts, that you that the crew knows how to operate, and ⁓ what limitations could it potentially give you for trade? Raal: Mm. Yeah, and I think that's when people kind of, and some people watch this show to sort of see, you know, what's the temperature or whatever, you know, I think that theme about resilience being more important than efficiency. I think we've about that a couple of weeks ago as a sort of emerging theme and it really, I really heard that loud and clear in the course of the day. speaker-1: Be like in their 50s or above, you know, we're just gonna be too tired to fight these kind of wars. ⁓ it's it I don't think you're gonna have the same kind of big geopolitical power shifts going forward that you had in just the very tumultuous 19th and 20th centuries. And so even if our growth rates aren't as spectacular, quality of life can improve, technology can improve, and at the end of the day, we're we're the healthiest, most educated, ⁓ longest-living humans that have ever come along, and I can see those trends continuing, even if like the GDP growth rate. largest and most energy efficient car carrier ever built when really when launched. Wow. ⁓ has been copied after that. So it's ⁓ getting competition but that's ⁓ I think ⁓ mostly because it was it was recognized as a good idea. and and you know commercial flexibility. So that's something that we ⁓ will model and help our customers with. Because this to keep track of all these technologies and especially what does it mean to operate ships with all these ⁓ options on board. Yeah. That's something that I believe a big manager like ourselves with many ships and different ship types in operation, we can offer some good insight to that. Nick Chubb: Yeah, yeah, one hundred percent. ⁓ and what was fascinating about this conf conference was the ability to bring different world views. I d I'm not don't necessarily want to say opposing views, but different worldviews. ⁓ and so so the the the next ⁓ keynote speaker and and ⁓ the next interview that we'll run ⁓ is Sabrina Chow. So Sabrina Chow is the speaker-0: And the next hundred, what will you be shipping in a hundred years time if you weren't shipping cars? speaker-1: That one I don't know. But I mean I think if if if if you look at it from I I think that one is a bit difficult for me to answer because Rates don't surge back up to you know five to ten percent like they were for a lot of the tail end of the twentieth century. speaker-0: What a great and positive message to finish on. So thank you very much for joining us. speaker-1: The I think the centennial kind of thing is is a little bit of a family thing. Right, okay. And the kind of the the the family today has two legs in shipping. Okay. One being her got liners, the other being her gave you in in gas and energy, right? Yeah. ⁓ and I think the the Nick Chubb: Immediate past president of BIMCO, and she was the chair of Wua Kuang, the ⁓ Hong Kong-based ship owner. ⁓ she's now the founder and CEO of C Capital Limited, ⁓ which is a new initiative providing ⁓ lease finance to the shipping industry. ⁓ but she was ⁓ bringing to the table very much the kind of China world view ⁓ and ⁓ where China feels ⁓ it sits. speaker-1: It was my pleasure. Thanks very much. Thanks, Michael. Cheers. Take care. the kind of longevity of the of the of the family interest is about being willing to enter and exit segments when it's appropriate, right? So so but what what we are doing with with with Herc Outliners, we are building a company to basically increase scale and maintain an a a position in basically moving vehicles and also equipment. We have didn't talk about that, you know, construction equipment, mining equipment, all these kind of ⁓ Nick Chubb: in this kind of global equation where you have a a mix of the the headwinds that were talked about by Michael and the ascension of China at the world stage over the last twenty years ⁓ and and what all of that from from the from the China perspective, which I think is something that we just don't get exposed to. In Western media. So it was a a a fascinating talk and a fascinating conversation ⁓ that you have with her, which we can play right now. speaker-1: heavy large stuff is is a very important part of our cargo as well. Interesting so so so so so we we we have we are on a mandate and we'll work on perfecting that and try to and what the what we're in the middle of now is trying to renew that business with with larger, more efficient, more energy and efficient and ultimately zero carbon capacity. Yeah. And and and I guess that is a that's an agenda for thirty, forty years in its own right, right? company would never have survived for a hundred years without being a willing and able to give up and entering into different segments ⁓ as ⁓ market evolves right and and I think if you if you if you I don't I'm not going to predict for hundred years but might be different kind of vessels and different kind of cargo that is Nick Chubb: So that that was Sabrina Chow. Raoul, what was your impressions sort of off off the back of interviewing her? speaker-0: Based on that, one more question, if I may. So the theme of our show is maritime transformation. It's really interesting to hear the transformation that HOAC's been on over the last century and the transformation it's currently on. What advice would you give to other leaders across the industry who are facing very, very difficult transformation challenges in terms of how their organization operates? Yeah, and as you said, there's a lot of moving parts there in terms of having the people ready with the skills at the right time. Exactly. So, ⁓ but coming back to today, ⁓ of all the things that you heard what you like to see happen or come out of this or what has it changed your thinking in any way or would you, is there something you'll be watching as a result of what you've heard today? Raal: Yeah, I think for me, I think ⁓ was ⁓ the commitment and talked it in the interview her as well there, ⁓ sort of ⁓ the Chinese commitment and interest the global ⁓ speaker-1: Yeah. ⁓ that's it's very difficult to give but I I can I can tell you what has worked okay for us. Yeah. ⁓ and and that is because I I I think it's very hard to say because I I've I'm sort of jumped into something six, seven years ago. Right, okay. Right, that had already had, you know, ninety three years of history. Yeah, yeah. ⁓ and and but what what we focused on, you know, we recognize we had a very capable organization in Oslo, in Manila, in our major markets like you know Well, I think the geopolitical situation is our number one ⁓ concern where we c we I don't feel like we really can do anything other than than trying ⁓ to adapt. Raal: And as I said in the clip there, there's that temptation to seem they must be rubbing their hands with glee when we're all kind of fighting amongst ourselves in the West. ⁓ But also, and the commitment to the green agenda as well, because that's something else that was like, now Bergen traditionally ⁓ has always been the home of really fighting for sustainability and those kinds of topics. And I wouldn't say that's changed, but clearly they're also dealing with the realities of. speaker-1: Of Japan, China, US, Germany, that that you know were very capable of managing this business. Yeah. So as a leader, I have not spent so much time on that. A little bit of improvement, a little bit of cost-tuning, a little bit of those strengthening somewhere. But but our focus from pre-pandemic into now has been Raal: that are coming from this kind of, know, it's easy to see that someone would take their eye off the ball of things like decarbonisation when there's so many other things at ⁓ play. So the fact that China is coming across very strongly and there is huge investment going into decarbonise. And course ⁓ that is not just a kind of like, ⁓ you know, to Jesus moment, you know, ⁓ as it speaker-1: ⁓ but ⁓ for the AI part, I think ⁓ Together with the owner, together with the board, spend lots of time and energy into focusing what are the most important choices. Okay. And what are are we doing to get those right? Yeah, yeah. So so so so so so I'm I I have the fantastic privilege of having a role where ⁓ you know it's i ⁓ the point of the death of the manager is n it's not much to do anything about. It's just maybe a fact that some those some roles will be changing or even ⁓ co ⁓ completely disappear. Raal: This is also the fact that they don't have oil reserves and they don't have a lot. renewables makes total sense in terms of their own resilience and stuff in there. you for me, think those were, it was interesting to hear that and it was interesting to, ⁓ difficult, I think maybe ⁓ not to, you know, that there was a clear subtext around, you know, that we all need to get on with our own business and minding our own business was a pretty strong theme in there as well, which came across. But as you said, I think, speaker-1: But I think to back to your point about how we ⁓ consume learning, ⁓ both on shore and on board, that's something that we can do something about immediately, right? And I think for us we are now testing out all sorts of ⁓ ways to improve our back office functions, ⁓ but also ⁓ the more you know preventive maintenance and ⁓ and help the crew make their life easier to get through every task that they need to do. So I think that's mostly focused on making six to eight good choices every year. Yeah. As oppos as as opposed to dealing with ⁓ two hundred and fifty and we talked about ⁓ talked about AI earlier. I mean right rather rather than making ⁓ two hundred and fifty operational decisions every day. Yeah yeah so so I think actually having having that kind of Raal: We don't often get a chance to hear what was clearly an articulation of a position rather than just necessarily one person's point of view. So I thought that was a bit of a first, certainly for me. I don't think I've heard that before. speaker-1: For me, a very exciting area to be investing more time in. And ⁓ and I'm glad we're getting some help from from you on that. And and we could rapidly make life easier for a lot of people. And we and I do see that in our organization now we're getting a lot of enthusiasm on this, you know? Normally change, people are don't like change and they're a bit skeptical, but Nick Chubb: And I was able to actually get under the skin of the Chinese commitment renewables. actually in my conversation with Andreas Enger. So Andreas is the CEO of Hogue Autoliners. their primary business these days is is owning and operating PCTCs, so car carriers. ⁓ and there's ⁓ two interesting things from that. One is ⁓ speaker-1: But but that's a that that's kind of a mass low hierarchy kind of structure, right? Yeah. If the basics doesn't work. Yeah, yeah, yeah. Yeah. Right? So so so I think what what the what ⁓ and that's probably also a little bit of longevity, right? Making sure that you have the operational organization, that you have a capable thing. Yeah. And I mean I think as a CEO you should aspire to have an organization that if you went out sailing for three months, yeah, everything would be okay when you come back, right? And that doesn't mean that Raal: Yeah. speaker-1: ⁓ most of my colleagues are so excited because they now see what ⁓ these tools can help them do in their job, how they can make their life easier. And and then we have this very positive movement in our organization where everybody wants to try ⁓ new ways of working and and think about ⁓ smarter ways of achieving our goals. And that's we should use that energy ⁓ to really ⁓ make some shifts, ⁓ I believe, right? Nick Chubb: what China is doing in terms of alternative fuels ⁓ and and the reason they're investing so heavily in alternative fuels, but also what the Chinese auto auto market has done over the last twenty years speaker-1: don't do things but it means that you focus on you know structuring us to get get get the important choices right rather than every day running yeah ⁓ running the business. speaker-0: Yeah, I've been saying with with transformation generally anything big shifts like this there's a phrase that we use in English While you've got the bonnet up. Yeah, you know If ⁓ we're gonna do all of that, what else could we do? What else could be transformation? think that's great advice and I think, you know, big kind of takeaway of that is that, you know, if the phone's constantly going, if there's constantly emails coming in, then you're probably doing something wrong and actually need to think about how the organization's running underneath to make sure those decisions get taken. And I think six to eight big decisions per year, if you're asking the right questions, will allow you to transform a business that's been around for a hundred years. speaker-1: Yes. Transformation is like that. But I mean I I don't think you should ⁓ understand this because it's I mean that's the huge privilege because that type of structure that allows you to do things, that's not something you put together in the three month project. That's something that it ⁓ requires a ⁓ legacy. I mean if you look at you know our operation we've we've been we've been and you and you know, instead of ⁓ taking ⁓ the systems and no the old processes We should just rethink ⁓ our processes entirely. ⁓ And there's ⁓ we shouldn't be too worried, I think, about the long term ⁓ effects. ⁓ we should look at what can we do this year and this month, right? ⁓ and to ⁓ to not be ⁓ so skeptical ⁓ also. I mean Raal: and ⁓ you sat down with Andreas and you ⁓ got into these ⁓ in a bit of detail. So maybe should take a at that now. Nick Chubb: Let's do it. speaker-1: fifty years in Japan. We've been ⁓ we've actually been with our own team and all staff more ⁓ twenty five years in China. Yeah, yeah. ⁓ similar in all the other markets. We've been for more than twenty five years in in ⁓ the Philippines working with ⁓ seafarers and so we have that platform. Yeah. Yeah that is extremely difficult to create from tr from from scratch. Yeah. And is ⁓ making ⁓ making the top job a lot AI ⁓ does make mistakes, but so do people. And ⁓ it's it's not like people are perfect either. but of course you need that you need that ⁓ domain competency to to know whether it's ⁓ giving you the right advice or not. And of course that's also a worry if we don't have ⁓ the specialists. more interesting. I mean if it didn't know if I should say easier, but but but it allows you to it allows you to to work on ⁓ work on important choices than in a transformative scenario matters a lot, right? To validate, ⁓ then ⁓ then it can give us the wrong advice of course. We have a lot of specialists. We have a lot of deep ⁓ technical knowledge in our organization ⁓ and and I'm sure we could that to even better use ⁓ with ⁓ your digital twins. Like in the sense we were early in, you know, defining it entirely new ⁓ vessel concept. We actually did that at the time we didn't make any money and we're almost close to f we being in financial stress ⁓ distress. But we had, you know, people on the technical side with the ⁓ curiosity to figure out and we knew our vessels started to build along. So we started actually with this as a paper project with some very, very good designers in Finland. Yeah. What would the best speaker-0: Yes, well it's been a pleasure, it's great to catch up with you and I know you've got, it's a big week for you, you've got a million things to do, but thank you very much for taking the time to join me. you. speaker-1: possible future-proof car carrier you could build with the current available technology, what would that look like? And when we when we got the answer to that, we basically were so inspired by it, but that we and our owners we decided to list a company to raise capital in order to make it happen. Because even when we That's incredible even when we made that Raal: Andreas Enger there of Hogue Auto Liners. really interesting what you're saying there, again, backing up that whole resilience idea. And I thought was really interesting then saying, well, what does that then mean in terms of leadership and how you kind of take the organization forward? Congratulations to them, by the way, on 100 years coming up. That's no small... speaker-1: When w so is it was it it was a choice. I mean talking about that it was a choice to actually develop the concept. Yeah. And we did it even if we d knew we didn't have the resources to realize it. And then it was and that obviously drove the next choice was that we do the necessary changes to our capital structure ownership to to get those resources. Wow. And then I mean the ⁓ th those are the kind of things that transform a company rather than just managing it. Raal: No small feat at all. But yeah, I think this is really gonna be one of the key topics I think about like, because resilience to your operations, but it's also resilience to your organization and how you put in place the kind of organization that can function and make decisions and, you know, gain that commercial advantage maybe from some of the uncertainty. speaker-0: You could easily spend a lot of time working on the wrong questions. How do you go about asking the right questions of yourself, of the organisation, of the market? Nick Chubb: Yeah, and I I think certainly, you know, thinking of the CEO's job as making six decisions a year, and and not only focusing on what's the right decision to make, but also then actually getting that call right, I think is a is a really interesting way of of thinking about it. ⁓ and actually it brings us nicely on to onto the next interview, which is which is Julian Bray from from TradeWinds, because you know, Julian spends all of his time speaker-1: I mean I mean if if if you take that in modern speak, isn't this a little bit like ⁓ you know chatting with Claude? I mean ⁓ if if you're able to provide context and ⁓ and yeah ⁓ and I mean I think we you have some of the same if you work I mean I just described the organization. I mean to have the organization with so much experience, whatever. Yeah if a leader, if you if you provide some context and ask some questions Raal: Yeah. Nick Chubb: asking ship owners the questions. It's very, very rare to get to kinda sit down with Julian and ask him some questions about everything he sees. ⁓ and we had a really interesting conversation about the parallels between where the market's at today and the amount of money being made today versus where the market was at in two thousand and eight, ⁓ before the the the great financial crisis. ⁓ and, you know, are we looking at the same ⁓ scenario or are things slightly different? ⁓ and for CEOs out there running ship shipping companies speaker-1: And actually listen to the answers. Yeah. ⁓ you can refine your questions and you can adjust the context and you can you I mean I think I think it is i it is actually I mean I I think the the the process and that's sort of the little bit of hope of ⁓ of life after I AI is yeah I i I I think in many ways and it's quite interesting as a test case because the ⁓ I I think the way of leading an organization with capable people Nick Chubb: What are those, you know, six decisions they should be taking through twenty twenty six? speaker-1: Who has a lot more information and understand things in a lot more detail than you look. Yeah. Looks very much like again chatting with Claude or or whatever, whatever kind of because because ⁓ and and you can there you can immediately see it, right? If you ask, if you app ask a stupid, imprecise question, you get the fluffy answer. And ⁓ and if you if you if you narrow it in, then if you if you provide context, you you suddenly get some insights that ⁓ that you didn't know. speaker-0: I like that. I think that's wonderful advice. Andreas, thank you so, much. I really appreciate it. you. Raal: I thought it was brilliant that you managed to ⁓ grab him and that he was, like I said, was game enough ⁓ to do it. yeah, take a look and see what he had to say. speaker-1: Thank you. Nick Chubb: Napptin. Raal: that was Julian Bray, editor of Tradewinds Magazine there. Great interview, Nick, well done. I'm interested to see what Julian was saying there around the sort of, know, changing of the market dynamics and these kinds of debt cycles and that sort of stuff. It was very interesting. And I think there's a kind of like, there's a thread in the way that the... Nick Chubb: Well, thank you very much. Raal: industry is kind of shifting and changing also caught up with Pia Melling, who's the Chief Services Officer of OSM, Tome. ship manager, ⁓ 400 ⁓ plus ships in technical management, I think 30,000 upwards employees, seafarers and so working through their crew management as well as their technical management arm. So it was good to get a chance talk her about ⁓ the way that ship management is changing as well and negotiating some of these headwinds that we're seeing more globally. Nick Chubb: Let's take a lesson. Thanks, Rao. That was really interesting. Raal: I think that's the key thing for me is that we don't, in this immediate rush to just keep the wheels on, that we don't lose the kind of long-term perspective that was building out of the decarbonisation story. and lots of other things that will support that transition it's about building that a different kind of industry that's much more sustainable for the future. Nick Chubb: Well that that brings me very nicely on to on to the final interview of the day. Michael ⁓ Beckley's talk ⁓ concluded that the two things we need are are resilience over efficiency and then also to be able to make shipping more visible. ⁓ and I was I was very fortunate to nab five minutes with ⁓ Joran Persson who ⁓ is the former ⁓ Prime Minister of Sweden. and he Has borne witness to ⁓ all of the benefits of globalization over the last ⁓ sort of 50 years or so, and talked at the event ⁓ about the importance of the kind of major international institutions. ⁓ and also had some great advice for the shipping industry about how to ⁓ become more visible and and and sort of capture that visibility that perhaps we're we're lacking. Raal: Let's take a look. Nick Chubb: All right. So that was your in person. Raal: Yeah, and you were very excited to NAB, Jörn. I wasn't sure whether we'd get him, but he was very game. And yeah, it was interesting. It was good. He actually gave his opening speech in Swedish, didn't he? Nick Chubb: I was. Yeah. No, he was. He was. Well, I was slightly nervous he wouldn't want to be interviewed in English. Raal: But of course, you know, being a global politician, was perfectly capable of speaking in English, as you saw. I thought one of the things that he did in that opening ⁓ and you touched on it in your interview there as is sort of setting that stage around Nick Chubb: He was. Yeah, yeah. Raal: in a sense, how ill equipped we are to deal with the situation that we find ourselves in because we've grown up in an era where we were taking for granted, yeah, the idea that things were gonna, that everybody wanted the same thing, that the path was for global trade to get more and more, for trade to be more and more globalized for. everybody to be wanting peace and prosperity and all that sort of And then we've kind of, the rubber sort of hit the road in terms of finding out that, you know, it's not, these things were not to be taken for granted and that we have to live with a new reality. And I think, you know, he's right that that's caught us all a bit flat-footed, I think. Nick Chubb: Yeah, one hundred percent. But I but I did like that ⁓ He was able to pull it back to a kind of longer term vision of where we could get ⁓ you know if we if we take ⁓ the industry's role in decarbonisation seriously. And I think if we take communicating about it seriously, and that's you know, coming coming back to the whole theme of this episode, that's why I'm so glad that that forums like this exist. and that the organizers of those forums are are are willing to invite us to kind of pitch up camp and and speak to all the interesting people who come along. Raal: Yeah, I thought one of the things that just to sort of, know, we've sort of captured some of the keynotes and some of the debate there. I think one of the other things that was going on in there that they did quite deliberately was they created sessions that would challenge people's thinking. If you think about the audience that was there, that is people whose daily reality is looking over data, is looking at market trends, is looking at... know, forecasts around, around what's going to happen geopolitically and regulation, all that sort of stuff. There isn't huge amounts of value in repeating that for that audience. But where there is a lot of value is giving them thought provoking sessions that, that sort of try and challenge their, their, their orthodoxy of their thinking or their, you know, just things that will spark a different, you know, a different view on the problem. that may then enable their creativity and get them to think about. And I think that's something that I'd like to see more in lots of the programmes in the sort of events that you and I have frequent. Nick Chubb: I think it's one of the biggest dangers of modern society that we all live in our own algorithmic feeds. ⁓ and therefore we get very, very insulated from worldviews that might be different to ours. And so I t totally agree with you. I think it's super important to get exposed to that. so that you don't end up in a kind of groupthink ⁓ and and possibly ⁓ become blinker to to to the reality of the world we're living in. I hope For everyone listening, watching, ⁓ it's been interesting kind of hearing those perspectives. ⁓ and if you did find them interesting, please drop us a comment, let us know. ⁓ if you have any follow-on questions, ⁓ let us know ⁓ in the comments. ⁓ and ⁓ and if you haven't ⁓ subscribed to this feed wherever you're watching it or listening to it, please make sure you do because it allows us to go out and do more of that kind of stuff. Raal: Yeah, hit the bell, hit the likes, hit the subscribes, make the comments, it all helps. Thank you. Nick Chubb: Awesome. Thanks, Raul. Well next week we will could be back in Bergen, speaking, and we'll air our our special undock live episode. ⁓ Raal: certainly will, which again hopefully did played its part in getting some new thinking happening in the room and you'll find out anyway when we talk we show you what we did last week. Nick Chubb: Some new perspectives. Thanks everyone. Have a great week.