SMF Launches 2nd C-Suite Breakfast To Engage Business Leaders Across the Maritime Sector

SMF Chairman presents Fox with photobook titled "A Light On The Straits"

As forces impacting global trade flows shift, is globalisation in retreat? This vital question provided much reflection among nearly 100 industry leaders at the second installment of the C-Suite Breakfast Series, hosted by the Singapore Maritime Foundation (SMF).

The C-Suite Breakfast Series is designed to bring maritime leaders together to share knowledge and perspectives on pertinent trends impacting the industry.

Held on 12 October 2022, this was the second session jointly organised by SMF and global management consulting firm McKinsey & Company as the knowledge partner. Mr. Fox Chu, who leads McKinsey’s travel, logistics and infrastructure practice out of Hong Kong, presented insights regarding the ways Asian flows and networks would define the next phase of globalisation by drawing on findings by the McKinsey Global Institute.

 

Changes to Trade Flows 

Mr. Chu set the stage by noting that the world has faced an unprecedented surge in large-scale disruptions to global connectivity over the past two years. Recent events such as the COVID-19 pandemic, Suez Canal blockage, and war in Ukraine have resulted in disrupted shipping and supply shortages.

Mr. Chu noted that while the share of goods traded across borders has decreased by percentage, the share of trade of services is growing in prominence. This was an encouraging sign as it indicated healthy economic upgrade in emerging markets like China. Boosted by domestic demand for locally manufactured goods, Mr. Chu noted that China is transforming from an investment- and export-led economy to become an economy fueled by domestic consumption.

Technology is also reshaping global value chains, causing them to relocate for reasons including cost, de-risking and proximity to consumers. In choosing export locations, however, low labour costs have become less consequential to companies, with trade based on labour arbitrage declining across many value chains. Intra-regional trade is on the rise and will do so for many years to come.

Fox presents his insights on Asian trade flows and networks to industry leaders

To understand more about this diversity and impact, we spoke to five incoming scholars about their aspirations for the industry.

What Can Companies Do 

Against this macro context, Mr. Chu suggested six actions companies could consider:

(1) Companies should reassess where they should compete along the value chain, with consideration for the company’s core value propositions, and thereby the operating model for their globalization strategy.

(2) Companies must consider how to capture value from services. He noted that there is now less economic value-add that is generated by the actual production of goods. Instead, companies should look into the increasing profit pools by delivering service associated to the product and engage customers alongside the total product consumption cycle.

(3) Companies should competitively speed up their delivery of goods to consumers, as e-commerce and disruptors are raising expectation on the service level.

(4) Companies must become agile and flexible enough to swiftly respond to disruptions. In the manufacturing context, one way to do this is to create common platforms across multiple plants.  This reduces the cost of plants, shortens development cycles and speeds up responses to supply chain shocks. 

(5) Companies must build closer supplier relationships. Firms need visibility and collaboration with their key suppliers to help them take advantage of new manufacturing and logistics technologies.  

(6) Companies must build resilience. This can be done through actions such as: dual-sourcing, increasing their inventory of critical products, near-shoring suppliers, regionalisation, SKU rationalisation, increasing safety stock, having back-up production sites, near-shoring production, and increasing DC network density.

Finally, Mr. Chu noted that efforts to adapt to regionalisation will not come without tradeoffs. Companies will be required to make trade-offs in various other important aspects of their operations, such as cost and capital, quality, service, resilience, ESG, labour and talent.

Leverage on the “Asia Century”

While the volatile environment will pose challenges to businesses, Mr. Chu noted that Asia will become increasingly important in global trade and will be a critical source of growth for many companies. 

Asia will not only be the manufacturing base for the globe.  It will be the powerhouse for consumption, R&D, and technology adoption.  Asia will be the source of growth for many MNCs.  Asia soil will nurture many Asia champions in global arena. 

CONTACT US

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The 2022 SMF New Year Conversations that took place on 13 January 2022 was graced by Guest-of-Honour Mr S Iswaran, Minister for Transport & Minister-in-charge of Trade Relations. Over 250 industry leaders across the breadth of maritime attended physically and virtually.
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Thank you to our industry partners for your strong support.

Mr. Lars Kastrup

CHIEF EXECUTIVE OFFICER, PACIFIC INTERNATIONAL LINES

Mr. Lars Kastrup is the Chief Executive Officer of Pacific International Lines (Pte) Ltd (PIL).

Prior to joining PIL, Mr. Kastrup was CEO of NOL/APL, and subsequently assumed the role of Executive Vice President, Strategy and M&A at CMA CGM Group. A veteran in the global shipping industry with over 30 years of experience, Mr Kastrup’s other roles include Executive Vice President of Assets at CMA CGM Group heading up CMA Terminals, CMA Ships, Container Logistics as well as regional carriers such as MacAndrews, OPDR and Mercosul; as well as Vice President at AP Moller-Maersk.
Mr. Kastrup complemented his tertiary education with leadership and management training at Penn State University and The Wharton School at the University of Pennsylvania.

Ms. Angeline Teo

MANAGING DIRECTOR & HEAD, GLOBAL TRANSPORTATION & OFFSHORE, OCBC BANK

Ms. Angeline Teo is the Managing Director and Head of Global Transportation and Offshore, Global Corporate Banking at OCBC Bank which focuses on the maritime, aviation, land & port ecosystems.
Ms. Teo has spent over three decades in maritime finance. Prior to OCBC, Ms. Teo was working at ING Bank, ABN Amro and DnB in Singapore focusing on maritime and offshore.
Ms. Teo graduated from the National University of Singapore with a degree in Business Administration.

Mr. John Martin

CHIEF EXECUTIVE OFFICER, GARD SINGAPORE

Mr. John Martin began his career in London in 1989 with Richards Hogg Lindley Average Adjusters, and qualified as a Fellow of the UK Association of Average Adjusters in 2000.
At RHL he worked in their offices in Australia, Taiwan and Hong Kong. In 2003 he joined Gard Hong Kong, as a claims handler. Mr. Martin also worked in Gard Japan, and in 2014 he moved to Singapore to set up the Gard Singapore office.
Besides running Gard Singapore, Mr. Martin also heads the P&I and H&M claims units and is the Senior Claims Representative for Gard in Asia.

Mr. Cyril Ducau

CHIEF EXECUTIVE OFFICER, EASTERN PACIFIC SHIPPING

Mr. Cyril Ducau is the Chief Executive Officer of Eastern Pacific Shipping Pte Ltd, a leading shipping company headquartered in Singapore for the past 30 years.

He is also currently the Chairman of Kenon Holdings Ltd and a member of the board of directors of Gard P&I (Bermuda) Ltd. and of the Global Centre for Maritime Decarbonisation Limited, which was established by the Maritime and Port Authority of Singapore. He was previously Head of Business Development of Quantum Pacific Advisory Limited in London from 2008 to 2012 and acted as Director and Chairman of Pacific Drilling SA between 2011 and 2018.
Prior to joining Quantum Pacific Advisory Limited, Mr. Ducau was Vice President in the Investment Banking Division of Morgan Stanley & Co. International Ltd. in London between 2000 and 2008.
Mr. Ducau graduated from ESCP Europe Business School (Paris, Oxford, Berlin) and holds a Master of Science in business administration and a Diplom Kaufmann.