- Xinhua-Baltic Report 2019: Singapore retains top spot as international shipping centre
Singapore has topped the 2019 Xinhua-Baltic International Shipping Centre Development (ISCD) Index for the sixth year running. The index provides an independent ranking of the performance of the world’s largest cities that offer port and shipping business services.
Based on objective factors including port throughput and facilities, depth and breadth of professional maritime support services, as well as general business environment, the report is a collaboration between the Chinese state news agency, Xinhua, and international freight benchmark provider, the Baltic Exchange.
Acquired by the Singapore Exchange (SGX) in 2016, the Baltic brings together complementary strengths of Singapore and London, two of the world’s most important maritime centres.
In the six years since this report has been published, there has been a general rise in the performance of Asian and Middle Eastern locations. The first report in 2014 included three European locations in the top five; in 2019 only London remains. The top five international shipping centres are Singapore, Hong Kong, London, Shanghai and Dubai.
Lu Su Ling, Head of Baltic Exchange Asia, says; “Singapore commands a strategic position as a maritime hub in the regional and global arena. The maritime industry is, and will remain, a big contributor to Singapore’s economy and it is therefore important that we continue to innovate and invest in this sector to achieve long-term success.”
“We are honoured to top the 2019 Xinhua-Baltic International Shipping Centre Development Index for six years running. It is a vote of confidence to the quality of services offered by the Port of Singapore, as well as the conducive business environment that facilitates an array of maritime activities in Singapore. This would not have been possible without the strong support from the maritime establishments, industry partners and unions. We look forward to an even closer working relationship to bring the Singapore maritime industry to even greater heights,” – Dr Lam Pin Min, Senior Minister of State, Ministry of Transport and Ministry of Health.
Xu Yu Chang, President of The China Economic Information Service, a wholly-owned company of the Xinhua News Agency, says; “Shipping is an essential method of international trade transportation and has become a significant pillar in the evolution of globalisation. Over the years, the joint index by Xinhua and the Baltic Exchange has become a globally recognisable evaluation tool for shipping centres around the world. In the context of continued globalisation, I believe our index will play an even greater role in optimising the allocation of global shipping resources and promoting the scientific development of international shipping centres in the future.”
Based on the evaluation scores, Singapore shows strength in ship management and shipbroking services, while Hong Kong is benefiting from China’s Belt and Road Initiative and economic opportunities in the Guangdong-Hong Kong-Macau Greater Bay Area. London’s first-class services in shipbroking, legal and shipping finance were highlighted. As important cities in emerging economies, Shanghai and Dubai are catching up with London in their level of shipping development, and were ranked fourth and fifth respectively.
Click here to download a copy of the report.
Top 10 port cities of the Xinhua-Baltic International Shipping Centre Development IndexRanking2019201820172016201520141SingaporeSingaporeSingaporeSingaporeSingaporeSingapore2Hong KongHong KongLondonLondonLondonLondon3LondonLondonHong KongHong KongHong KongHong Kong4ShanghaiShanghaiHamburgHamburgRotterdamRotterdam5DubaiDubaiShanghaiRotterdamHamburgHamburg6RotterdamRotterdamDubaiShanghaiShanghaiDubai7HamburgHamburgNew York – New JerseyNew York – New JerseyDubaiShanghai8New York – New JerseyNew York – New JerseyRotterdamDubaiNew York – New JerseyTokyo9HoustonTokyoTokyoTokyoBusanNew York – New Jersey10AthensBusanAthensAthensAthensBusan
- An evening with Paralympic sailor Hannah Stodel
Holman Fenwick Willan has kindly offered to host the Baltic Exchange Sailing Association in receiving Paralympic Sailor Hannah Stodel in a social drinks evening in London, on Wednesday 9 October (1715).
Hannah is an inspirational speaker and will briefly share with us her vision of undertaking the Vendee Globe challenge in 2020. All are invited to join us for this evening, which will extend to drinks and canapes after her introduction.
Read more in advance at www.hannahstodelracing.com
To help us prepare in terms of numbers, it would be helpful if you could RSVP your intended number of guests to Philip Bacon (email@example.com). Alternatively please contact Amanda Hastings, BESA Social Secretary, (firstname.lastname@example.org) or Camilla Roberston at HFW (email@example.com).
- Finn Trophy – 21 Sept, Isle of Wight
This annual event traditionally brings together two or three flotillas of ocean-going boats that compete as teams in name of The Baltic Exchange, Lloyd’s of London, and sometimes The London Stock Exchange. This year, we have agreed with several other City-based sailing clubs to mutually open our summer / post-summer events, so we might have other teams competing, e.g. John Lewis or The Portcullis Club.
On Friday 20th September evening, crews gather in Cowes for dinner and light refreshment, in concentration for the athletic feats of the following day. Early on the 21st, a starting gun will see the flotillas race off neck to neck round a dedicated course within the Solent, which will be shorter than last years’ Nab Tower race. After the racing and the traditional ‘apres’ social on Marina and nearby watering holes, Saturday evening the motley crews regenerate themselves into a glamorous gathering for Dinner at the Royal Yacht Squadron and perhaps prize giving, if the winners can be decided.
Companies or groups may enter boats and crews in the Racer or Cruiser categories for Team Baltic; if you are not part of one, please get in touch as we will be seeking to accommodate individuals on Team Baltic boats in need of crew. There will be Special Provisions for Young Baltic Association members.
If you have never sailed, don’t be daunted – this is a perfect chance to try it out!
Please contact Philip Bacon for further information and entry forms.
- Banking on climate considerations
Around the world, the environmental agenda is increasing. International focus has been levelled on Greta Thunberg, the 16-year-old credited with starting the school strike for climate movement. Extinction Rebellion, which aims to use civil disobedience and non-violent resistance for environmental protest, has received media coverage across the globe. The Ocean Cleanup has become known for its effort to clean the Great Pacific garbage patch, a Pacific Ocean marine debris particle gyre. As resolve to protect the planet has increased, it has filtered into international shipping and as the sector moves away from fossil fuels to decarbonise, it faces a rapid fleet and technological alteration. This exposes a lot of sectoral players — particularly banks — to risk.
“If banks discover too late [that] they have invested in ships that will become undesirable or even obsolete because of this change, they could see valuation write-downs or even defaults in their portfolio,” notes Dr Tristan Smith, a reader in energy and shipping at the UCL Energy Institute.
The environmental element
Now, shipping stalwarts are getting tougher on their environmental approach. Eleven major shipping banks have stated that they will now take account of climate considerations in lending decisions. The move, the first of its kind, has seen the banks sign up to the Poseidon Principles, which offer “a framework for integrating climate considerations into lending decisions to promote international shipping’s decarbonisation”. Indeed, incentivising the decarbonisation of maritime shipping is behind the institutions’ choice to think about climate when deciding upon lending.
The Poseidon Principles’ founding signatories include Citi, Société Générale, DNB, Nordea, ABN AMRO, Crédit Agricole Corporate and Investment Bank, Danish Ship Finance, Danske Bank, Amsterdam Trade Bank, DVB Bank and ING, with more banks anticipated to sign up in the near future (including Asian banks). Citi, Société Générale and DNB led development of the values, along with Maersk, Lloyd’s Register, Cargill, Euronav and Watson Farley & Williams. Support was provided by the Global Maritime Forum, the UCL Energy Institute and Rocky Mountain Institute, and the principles’ drafting committee featured representatives from signatory banks. Committee chair Michael Parker, who is global industry head of shipping and logistics at Citi, says the banks realise the platform they have within shipping to promote responsible environmental stewardship in the maritime value chain.
Now, shipping stalwarts are getting tougher on their environmental approach
“The Poseidon Principles will not only serve our institutions to improve decision-making at a strategic level but will also shape a better future for the shipping industry and our society,” he says.
The values claim they create “a common, global baseline to quantitatively assess and disclose whether financial institutions’ lending portfolios are in line with adopted climate goals” and are therefore key for supporting decision-making of a responsible nature. They are also said to be compatible with IMO goals and policies, including the objectives of lowering annual GHG emissions by at least 50% by 2050 and GHG emissions peaking as soon as possible. Poseidon Principles signatories make a commitment to including them in their internal policies, procedures and standards and agree to collaborate with their partners and clients continually to put the values in place. The principles apply to lenders, relevant lessors and financial guarantors, including export credit agencies.
“The Poseidon Principles are the starting point for pricing in the climate risk of financial institutions’ ship finance portfolios,” says Dr Sophie Parker, University Maritime Advisory Services’ principal consultant. “The disclosure of a bank’s portfolio climate alignment score is the catalyst for banks to start thinking about why particular ships in their portfolio don’t perform as well as others compared to the climate target. It provides the impetus for determining what solutions can be applied to reduce their carbon footprint in the future and to consider the risk of devaluation if they remain exposed to fossil fuel-dependent assets. This will become increasingly important as the shipping industry moves away from fossil fuels to clean fuels.”
Those involved with the values are singing their praises, while Human Rights at Sea and Eco Marine Power have also applauded the standards. James Mitchell, manager of Rocky Mountain Institute’s Global Climate Finance and Industry programmes, lauded “the foresight and commitment” from all those participating in the principles’ development.
“No less than 78% of global GHG emissions can be linked to global capital stock, like power stations, modes of transport and manufacturing facilities,” he states. “By redefining what is possible through cross-sectoral collaboration, the Poseidon Principles rewrite the role that the financial sector can play in helping achieve the goals of the Paris Agreement.”
“The Poseidon Principles are a tool to demonstrate that [banks] are acting responsibly and allow them to compare climate risk with each other, but also a tool that will allow them to manage critical investment risks, retaining their crucial role in providing the liquidity that enables international trade,” adds Dr Smith.
The values’ launch could not have happened at a better time. They demonstrate how sustainable firms can receive reward for good practice. Going forward, the environment will be a key factor when it comes to doing business — and that includes the shipping sector. With growing interest from investors more widely surrounding corporate social responsibility, environmental, social and governance (ESG) — the three main factors when it comes to measuring the ethical effect and sustainability of an investment in a firm — are now critical when it comes to institutional capital.
“ESG … has become incredibly important,” notes Andy Dacy, chief executive of JP Morgan Asset Management’s global transportation group. “You cannot put institutional capital to work without looking at the ESG aspect.”
What’s more, in the next decade or so, there will need to be significant change in the shipping field if the sector wishes to adhere to what the IMO wants. According to Maersk chief operating officer and executive vice president Søren Toft and Lloyd’s Register chief executive Alastair Marsh, emission-free ships must enter the fleet by 2030 — with Mr Marsh saying that this has to happen for the industry to meet the IMO 50% by 2050 goal and Mr Toft saying it must occur “to deliver on ambitious climate targets”.
“This leaves us only ten years to develop the new marine fuels, propulsion technologies and infrastructures that will be required,” he warns.
“The 2020s will be a critical decade for not only piloting and prototyping new fuel types and energy sources but also building future fuel supply chains,” explains Mr Marsh. “The introduction of the Poseidon Principles demonstrates that ship finance is determined to support shipping’s decarbonisation challenge across the maritime value chain and also support other factors such as the energy transition.”
The Baltic Exchange will hold its next Ship Finance Executive course on 11 and 12 November in London in the UK. More information can be found here.
- Baltic Member Update
The following companies have applied for Corporate Membership:
Company Individual Alufer Mining Limited Mr T Clarke Singapore Marine Pte Ltd Mr A Sappino
Mr T Z Tea
Best Line Petrochemicals FZE Mr B D’Souza Dorian LPG (UK) Ltd Mr N Grey-Turner
The following individuals have applied for membership of an existing member company:
Individual Company Ms K Savvopoulou Howe Robinson & Co Ltd Mr L de Klee Braemar ACM Shipbroking Ltd Mr D Chan Singapore Chamber of Maritime Arbitration Mr S Y Lee Singapore Chamber of Maritime Arbitration
Any comments should be passed to Karen Karanicholas by 24 July 2019.