Esben Poulsson, a former chairman of the International Chamber of Shipping (ICS), warns that looming economic instability and the effects of the war in Ukraine could disrupt the rosy conditions in the container and tanker trades.
Market conditions
In the fifth in a series of interviews ahead of the Saudi Maritime Congress Poulsson talks to Seatrade Maritime News about how he sees the market outlook and the vital role Saudi Arabia has to play in the maritime industries.
“Current market conditions are very positive for the container segment especially, and in more recent times, the tanker segment as well.
For the dry bulk sector, there has been a correction in recent months but I still believe the medium-long term prospects for this segment are positive,” he said.
“That said, we are facing many uncertainties, be it the conflict in Ukraine, inflation, or recession fears, to name just a few, so predicting future markets is always problematical but, as I always say, to be in shipping one must be an optimist, so I am optimistic overall.”
Buoyant state
Poulsson held the position of ICS chairman from 2016 to 2022.
He is also executive chairman of Enesel Pte.Ltd., a Singapore-based ship-owning entity, which operates a fleet of large container vessels under the Singapore flag.
He said that, as VLCC owners, Saudi Arabia was important to the ICS, and that he hoped the Kingdom would soon become an associate or full member.
“Saudi Arabia is a fundamentally important maritime nation and it is key that we engage with national stakeholders and work together for the future of shipping. Given the buoyant state of the Saudi economy, and not least the relatively strong oil price, I believe the prospects for Saudi ports are very positive,” he said.
Economic growth
According to the International Monetary Fund, Saudi Arabia’s 36.2 million population will see real GDP growth of 7.6% in 2022, the year when the size of its economy passes the $1trn mark at current prices, according to its estimates.
Its economy will be over twice the size of the UAE’s: this year, the IMF forecasts Saudi GDP at $1.04trn, compared to the UAE’s $501bn.
“Saudi Arabia and the wider Middle East region are very important to the maritime community,” he said.
“The region is located in the middle of key international trade routes and with the Kingdom’s large maritime fleet, this undoubtedly offers significant opportunities to the ICS’ members and the shipping industry overall.
Saudi Arabia’s Vision 2030 has seen considerable investment in the construction of ports, railways and infrastructure, and the maritime sector will certainly thrive over the coming years.”
Worth the long wait?
According to the ICS’s Saudi data page, the Kingdom, a net exporter thanks oil, operates a merchant fleet of 284 ships valued at $5bn.
Data provided by the U.N. Conference on Trade and Development show that throughput at Saudi ports grew at an annual average rate of 5.9% in the decade to 2020 when the total reached 9.4m teu.
The Kingdom’s National Transportation and Logistics Strategy call for that figure to increase fourfold to 40m teu by the end of the decade.
“I have throughout my career in shipping always had a great wish to visit the Kingdom of Saudi Arabia, and finally it is happening.
I recall being extremely disappointed when in 2020, this event was postponed due to the Covid-19 pandemic but I have no doubt that the long wait will prove to have been worth it.”
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Source: Seatrade Maritime News
