Veteran exec undaunted by shipping woes

Tom Boardley said he is not fazed by his baptism by fire in one of the leading roles in the global maritime industry.

Since he took over as marine director of Lloyd's Register, the shipbuilding industry has plunged to its deepest crisis in recent history.

Boardley, 52 and a veteran of the industry, is not about to panic.

"Anyone who has worked in the container liner industry for the last 20 years, like I have, has been baptized so many times, I don't think there is anything new they could throw at you," he said.

Boardley's marine division works closely with shipbuilders around the world to improve technical and safety standards.

Around 1,000 of the division's 2,800 staff members are in Asia, with 600 in China alone. When fewer ships are being built, there is less work for his organization to do.

The company's official position is that there are currently no plans for reducing its full-time staff, although there might be some switching of roles.

Boardley said the shipbuilding industry will face a "painful" adjustment until there is a recovery in ship orders, which he predicts might not be for four or five years.

"Our expectation is that by 2013 and 2014, the level of ordering each year will be back to the levels of 2004 and 2005," he said.

Boardley, who was chief executive of French container shipping company CMA CGM's UK operations until he was headhunted by Lloyd's, said the current imbalance in the world market is largely due to the boom conditions prevailing before the world slump.

"Clearly what you are seeing at the moment is a drop in new building orders, but that is on the back of the most unprecedented boom ever when there was a huge expansion of shipbuilding orders, which only really subsided in 2008," he said.

"What is out of balance is the amount of tonnage being deployed versus the amount of cargo available for tonnage."

Boardley said one effect of the current imbalance is that the price of ships has come down and the purchase lead times have been significantly reduced.

"In the worst case in 2007, you were talking of getting delivery in 2011. Now in 2009, you can still get 2011 delivery because a lot of the slots haven't been filled," he said.

Boardley has worked in the shipping industry since he joined P & O after graduating from Oxford in 1978.

He had a number of roles with the shipping line in liner management and agency operations in the United Kingdom, Taiwan, Korea, Japan and Australia.

In 2004, he became head of Japanese shipping line NYK Line's European container activities based in London before moving to CMA CGM. He replaced Alan Gavin in his current role in April.

Boardley said the current crisis affecting world shipping is causing the industry to rethink its future.

Whereas until recently the drive has been to have faster ships to compete with air freight, he said, there are now moves to slow ships down.

This means that even with low cargo volumes, ships can continue to operate without huge costs.

Boardley said a major challenge is that many current ships are not designed to go slower.

"There have been ships that have been designed in recent years for an optimal speed of 26 or 27 knots and do not have an efficient hull to travel at 18 or 19 knots, " he said.

"There isn't an easy answer to this. Throughout history you find yourself in a situation where you build a ship for one speed and wish it would go at a different speed," Boardley said.

He said one proposed solution for reducing capacity, compulsory scrapping strategies, might actually fall afoul of European Union antitrust legislation.

"Anything that is a concerted decision by a group of carriers to influence the market, which is the implication, might be of great interest to the (EU antitrust) competition commissioner," he said.

He believes such plans would be largely unworkable, anyway, because the industry often finds it difficult to work together, he said.

Boardley said one solution for the shipping industry is to build bigger ships because of the economies of scale.

(China Daily 11/30/2009 page3)