The container ship industry is facing some of its hardest challenges ever – but insight and foresight are just as necessary as industry experience to tackle these problems successfully
What a year it has been. It is 12 months since the Hanjin Shipping filed for bankruptcy at the end of August 2016, plunging the sector into turmoil and self-doubt. It was one of the grimmest events in the half century of the battle for survival in the boxship sector.
Seemingly at the mercy of brutal market forces that generate mega-mergers (Hapag-Lloyd and United Arab Shipping Company, Cosco’s US$6.3Bn bid for Orient Overseas Container Line, CMA CGM taking NOL under its wing) and mega-insolvencies, it is tempting to ask whether we are helpless swimmers in the tide.
The challenges posed by the new order have inevitably been a main topic of discussion formally and informally among the 48 students enrolled in the 2015-17 class of the Executive MBA in Shipping and Logistics at Copenhagen Business School. This will continue as members of the 2017-19 intake assemble in September.
Our participants are far from being novices at their trade. They are men and women who occupy senior positions in their businesses and we are striving to help them to still-higher levels of achievement. Our programme is known throughout the industry as the ‘Blue MBA’.
The extraordinary complexity of container shipping – which looks on paper to be the simplest of operations – calls for make-or-break decisions on a host of matters: financing, allocating returns to shareholders, a company’s place within a wider group portfolio, restructuring, industry relationships, fleet deployment by capacity and by geography, trade alliances, periods of charter, when to scrap, and when to order. We are all sadly aware of disastrous failures to read market cycles and of how little it takes to knock a market or company recovery off-balance.
Can the winning formulae be taught and learned in the classroom? Absolutely not, but one can equip oneself with the tools to tackle the problems successfully. Industry experience is fine, but it must be enriched by a grasp of fundamentals, technical knowledge and strategic judgment – insight and foresight, in other words.
In fact, ‘classroom’ is hardly the right word for the environment fostered by the Blue MBA, a vehicle supporting what many admit remains a rather conservative industry. I have been involved in the development and co-ordination of the MBA since its initiation in 2001 and I believe we have made a difference with our total of 200 graduates from over 40 countries. Our latest cohort comprised 48 participants from 20 nations, which is the maximum capacity for an MBA class at Copenhagen Business School.
The slide in the global container market and attendant uncertainties demand that we face up squarely to both the boom-and-bust nature of shipping and the quality of its leadership and management. The Blue MBA is predicated on the insistence that the educational model must be fully relevant to this ever-changing industry.
Study and lectures are integrated with each person’s day job in their individual enterprise. That is why we appoint some of the top industry figures and academicians as tutors and why each degree thesis – what we call the ‘integrated strategy project’ – takes the form of a detailed study of an issue critical to the student’s organisation.
We benefit from the huge role of the Danish capital in the industry. In addition, one of our one-week modules is delivered in Hamburg – a hub for the container sector and much else besides – and another in London which abounds in ship finance, management, legal and insurance know-how.
We place great emphasis on the diversity of the student body. Besides nationality and gender, this means encouraging representation from the different segments of shipping and shipping-related industry. This makes for a second-to-none dynamic.
Irene Rosberg is programme director for the Executive MBA in Shipping and Logistics at Copenhagen Business School