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Anything, Anywhere

Asia-Pacific shipagents are having to expand both their geographical presence and their package of services

Being a shipagent is about being where your principals need you to be, and doing the job that they need you to do. Shipping, though, is a flexible beast, so agents need to be equally flexible in terms of location and of service provision. A look at the shipagency sector in the Asia-Pacific region reveals examples of both.

New networks
The shipping landscape – or seascape – is changing in the Asia-Pacific region. New ports are sniping at established neighbours (Tanjung Pelepas is siphoning off business from Singapore, for instance), while new regional hubs are developing, Shanghai being the most notable. Shipagents in the region are having to show their principals that they are nimble and swift on their feet, capable of providing an extensive service in these new locations. The answer, in many cases, has been for shipagents to expand their networks of offices and representatives. Large shipping service providers such as Barwil and Wallem, for example, have a slate of new offices either recently opened or soon to do so.

“Barwil continues to develop its presence in China, and in 2002 we acquired a new office close to the Bund in Shanghai,” says Nigel Moore, Barwil’s Senior Vice President Asia. “To us, and hopefully our customers, this signals a firm commitment to be in China for the long haul.”

According to Wallem’s Neil Russell, “In 2003 we expect to have established ourselves in Indonesia and Malaysia, and to have repositioned ourselves in China following changes in regulations governing foreign agency companies as a result of China joining the WTO.”

Global maritime service provider Inchcape Shipping Services (ISS) says that, as far as China goes, it already has a presence in the shape of port captains in Shanghai, Dalian, Tianjin, Qiandao and Guanzhou, underlining the increasingly significant role that China is likely to play in the region’s maritime industry in the decades ahead.

Meanwhile, GAC, another global shipping services operator, says it has 73 offices in the Asia Pacific and Indian sub-continent, with more on the cards.

“Other locations are under review. Our expansion will continue,” confirms Christer Sjoedoff, GAC’s Regional Director.

But expansive regional networks are not commercial routes open to everyone. Is the clock running down for small shipagents in the region who are not able to keep up? Not necessarily, according to ISS.

“Our view is that small agencies will not disappear,” the company says. “There is a trend for larger owners to go to global players that are able to offer the innovative new products... but there are many owners who are happy with their existing arrangements.”

Increased security in ports including Singapore is adding to the workload of agents

Heightened security
Not only are increasing demands being made on agents in terms of location, they are increasingly being asked to do more, often in response to external factors. One issue that agents in the Asia-Pacific region have had to address recently has been that of security. The problem is two-fold. Firstly, there have been heightened security requirements following the attacks on New York and Washington in September 2001. Secondly, there is the persistent problem of piracy in the region.
The container trades in particular have been affected by tighter regulation, says Neil Russell. And not everyone has been equally active in responding to the new regime.

“The increased emphasis on security has mainly been felt through the implementation of the US Customs Service Container Security Initiative,” he says. “This went live on 2 December 2002, and we have had to change our work patterns to provide for more out-of-normal-office-hours work. We are coping, but so far it appears that the cargo community has not fully come to terms with the changes in trade documentation processes which are necessary.”

The terrorist strikes against the US have also resulted in stricter personnel regimes throughout the region, especially in Singapore, says ISS.

“Authorities have made responsible enhancements to security post-9/11,” it says. “For example, in Singapore there has been significant tightening of regulations relating to the transfer of crew, crew coming ashore, and passengers on cruiseships coming ashore – such as face-to-face clearance. This inevitably has meant additional work for the agent, as more time is spent dealing with immigration control. This particularly impacts bunker calls, where the crew can no longer so easily come ashore for R&R.”

For the agents, it’s a question of rolling with the punches. Heightened requirements always mean more work. But agents in the region have endeavoured to keep disruption to a minimum.
“We have seen no disruptions to business caused by the increased emphasis on security,” says GAC’s Christer Sjoedoff.

Nigel Moore of Barwil agrees, though highlights the increased costs involved.

“The authorities have generally tightened up, particularly in immigration matters or work associated with the petroleum industry. We no longer have quite the latitude to operate that we had, and activities are more tightly regulated. No bad thing, but it all adds to the time spent on performing agency tasks, and hence our costs increase also,” he says.

The second security concern, piracy, has less of an impact on them, the shipagents say. According to ISS, “Piracy is a key issue for owners, but the impact on agents is not so significant. We do provide information to vessels of how and to whom to report piracy and sea robbery incidents – for example the Singapore Coast Guard, and the Indonesia Marine Police, and the International Maritime Bureau in KL. We also proactively alert principal clients to current events and incidents as part of our service.”

Wallem’s Neil Russell confirms that piracy is more of an issue for owners than agents.

“Piracy in the region is not a problem which normally has a direct effect on agents,” he says.

Economic outlook
What is a concern for both owners and agents is the economic health of the Asia-Pacific region. When Asia is buzzing, good business can be done. When it isn’t, shipping tends to suffer, though container trades can benefit on the outward trades, with Europe and the US able to buy the region’s cheap exports. However, most container carriers run their own Asia-Pacific agency operations, so the vagaries of the box sector have comparatively little impact on the independents, who concentrate on the dry bulk, oil and project cargo sectors. What, though, is the general economic state of play at present and what is the outlook for agents?

“We are very busy,” says Wallem’s Neil Russell. “Business has picked up strongly in the second half of the year and we are hopeful of more of the same next year. But the Middle East situation is of continuing concern and the sooner the short-term issues are resolved the better.

“The US economy is not yet on a strong growth curve, but there is more reason for optimism than pessimism. The regional economies are not yet growing across the board, and of greatest concern is Japan, which seems no longer capable of progressing further than short periods of modest GDP growth. Hong Kong is hindered by its currency, which is pegged to the US dollar, which is mainly why we are into the fifth year of deflation in Hong Kong, and muddled ideas about how to interact with a resurgent China, which goes from strength to strength and is the brightest economic prospect in sight. For the [latter] alone, though, we can be optimistic,” says Neil Russell.

Singapore and China calls up
ISS confirms that optimism. “In the Asia-Pacific region (excluding Japan and Australia), ship calls are up 24% on last year. There is major growth in Singapore due largely to new business from Stolt Nielsen, and in China, which is in turn due to increased economic activity.”

It looks, then, as if principals will be keeping their agents busy across the region during 2003.

Author: Roger Overall.

Forbes Group