In the last 30 years how do you see the industry has changed? How has your company adapted to these changes?
The shipping industry has changed in two radical ways over the last 30 years: 1) Globalization shifting the newbuilding market eastwards and 2) increased awareness of the environmental responsibility of the industry and politics in general.
Representing the Danish marine equipment and service supplier industry, we have seen globalization result in newbuilding yards moving from Denmark eastwards. But globalization has made the Danish suppliers more international, using the global market to enhance their own production and value chains to become closer to more customers and partners all over the world today, instead of being dependent on the home market only.
An interesting contrast to the continuous move towards low cost production in countries for the major shipping segments, recent trends in the development of more specialized vessels has revitalized the Danish shipbuilding industry within, especially the fishing and aquaculture segment and smaller light weight material ships. Over the period of the last 30 years, we have also seen a radical move from iron bending to technical and system-oriented value creation in Danish supplier companies.
Another interesting change of the marine industry in the last 30 years is the growth in sustainable energy projects and the effect this has had on the construction and design of specialized tonnage to move huge energy projects out on the oceans. This is a trend in which Denmark has had a defining role over the period.
What major shifts have you seen in the last 30 years in terms of government policy which has either helped or hindered your business?
1) Globalization has opened the shipbuilding market and shifted the structure from political to commercial industries on a global scale. The industry is still important in national politics at individual country level with state protection, investment and interference at various levels, but the trans-border industry itself has grown more and more into a commodified industry with economy of scale, lowering unit costs and enhancing the hunt for standardizations – especially in the main segments of tank, bulk and container shipping. Containerships built for the main trade lanes such as Asia-Europe around the millennium are in feeder services today. The marine industry has gone from being a foreign policy power play to a national political scene, mainly with reference to jobs on a local level.
2) Pulling the other direction has been the environmental focus to reduce the carbon footprint of goods transported by sea. In the good years, you could sell and charge premium products because it was good SCR (Social Corporate Responsibility), but in the last decade the developments within energy efficient and environmental technologies has mainly been legislation driven. The latter has and is causing a major shift in the industry, challenging ship owners on the technology choices to meet the future of environmental demands and legislation.
The latter has truly developed the Danish marine industry tremendously. Comparing the amount of shipyard workers 30 years ago in Denmark with the spin-off of technology and service providers, the former Danish newbuilding yards have spawned into the Danish maritime industry today. There are a lot more jobs within the industry in Denmark today and the average maritime employee in Denmark adds more value to the country and the industry as a whole. That aside, we will always support a continuous development in making the marine and any other industry, for that matter, less polluting and more environmental friendly to ensure that we have a market tomorrow and a home for the coming generations.
Has internet technology and in particular ecommerce and IOT (internet of things) affected your company?
In short, yes – both communicatively with the industry as a whole, but certainly also the product and general business development of our members. Based on the development of higher complexity in registering, measuring and reporting to meet growing environmental standards and enhancing the operational performance of the vessels as a competitive edge, we have seen a big development of the service industry supplying the shipping lines. With technological development, and especially the exponentially growing level of digitalization, vessel operation and seamanship is a much more complex task today with limitless possibilities of data sets. This has opened the market for many new types of suppliers to the industry within digital products and the service sector in general. Owners and operators outsource areas of the operation, where they might not have the expert knowledge in house, or do not wish to carry the organizational burden of the increased amount of tasks themselves.
Digitalization and IOT has already changed navigation and registration fundamentally and the future of IOT will continue to affect more parts of the vessel from the bridge and deeper, to the engine room; structural design and daily operation – shore based or on board.
There is no doubt that this development will continue onwards at full speed. The point, as I see it, is how human interaction with this digital development will transform the jobs and workplaces within the industry and how responsibility will be distributed and claimed in the future.
How has your company had to evolve in terms of product offering in order to adjust to the changes in the industry?
Indirectly, as a representative for the industry in Denmark, we cover the full product range of the entire maritime market globally. We see the amounts and types of products diversify and grow with especially the amount of service and digital products expanding the range of products. Interestingly enough, I find that the type of dialogue is one of the main adjustments we experience directly. In the 30 year period, this has gone from a direct dialogue mainly with shipyards to a more complex group discussion, involving designers, institutions, politicians and the end users - the ship owners. To a certain extent, over a period in the early 2010s, products transported by sea displays a growing concern over the carbon footprint of the consumables. Today, the media landscape has become a major stage for dialogue, which includes the risk of losing the depth of the conversation to find relevant and sustainable solutions. However, we aim for a deeper dialogue with partners such as Marintec China and other trade shows to ensure that these marketplaces develop in a manner, where actual industry concerns are being addressed. For us, we see the changes going from a customer/supplier relationship to a partnership, where sparring and brainstorming is what develops the marketplaces as a whole. This is not an easy approach in an industry where the cargo-segments head for more commodification, but it is a way of taking responsibility.
Being an exhibitor for over 30 years now at Marintec China, how would you describe your relationship with this event?
Basically as a marriage. As in marriages, we have ups and downs – and sometimes a smarter, younger and more attractive partner walks by and gains some attention. So we take our relationship seriously and continue to evaluate and talk about what is important and how we develop ourselves, the show and the industry. This is not only every 2nd year in Shanghai but often, and all over the world.
Danish Marine Group has been actively involved in the show and the Chinese marine industry for over 40 years. We consider ourselves as being a part of the growth of Marintec China to the level of today, where it is the most important show in Asia for many of our member companies. As many of our members, we are ‘all in’ on China with local representation and involvement in the industry on a national level as well.
What do you get excited most about when returning to Marintec China at each edition?
Personally, I get most excited about meeting our Chinese colleagues amongst our own colleagues and those of our many members with staff in China as well as the Marintec team. On top of that, it is always exciting to see the national representation of the shipyard and shipbuilding industry – not the least, the level of internationalization of their business. To me, the indicators of internationalization such as currency adaptability and the level of cross-border buyer/supplier projects in the Chinese marine industry and how this is displayed and physically located at Marintec China show are exciting to see. This is also true, as to the Chinese interest in new themes and developments in the industry such as the initiatives within the cruise and pax-segment
Do you have any funny stories or experiences you may have had or people you have met at Marintec China over the years?
Do you feel Marintec China has assisted in your company’s success over the years? If so why?
I feel we have assisted each other in developing Marintec China as not only a relevant national Chinese market place, but also a good place to gather the industry on global terms. The continuous dialogue and the willingness to listen has lifted the quality of the marketplace, where we can focus on the actual maritime business. The Marintec team has provided a room for dialogue on development of the show together with us as an exhibiting partner, which has made both the show and the Pavilion of Denmark grow in terms of space, exhibitors and relationship to the Chinese maritime market.
How would you describe Marintec China to someone who has never visited?
As the largest maritime tradeshow in Asia and most important maritime event in China. Bringing your Chinese colleague or partner is still a good idea.
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About Danish Marine Group
Denmark is one of the largest shipping and maritime nation in the world. Danish Marine Group gathers the entire marine suppliers industry, representing a deep insight into the needs of shipowners, operators, shipyards and naval architects. Based on close and respectful dialogue, the assignment for Danish Marine Group and its member companies is to optimize, improve and reduce the environmental footprint of this vital industry for world trade and cross border cooperation.
The Danish Marine Group is the largest cluster of its kind in Denmark working with all the maritime segments for more than 50 years. The network of companies is part of Danish Export Association, which represents more than 600 companies globally – most of them marine related - and has had their China main office located in Shanghai for more than a decade. Mr. Mark Lerche is head of Danish Marine Group.