Following is the transcript of a CNBC interview with Esben Poulsson, President, of Singapore Shipping Association. The interview was broadcast on CNBC on 26 April 2017 at 11:10AM SG/HK Time, during CNBC's "Hong Kong versus Singapore" theme week.
All references must be sourced to a "CNBC Interview".
Interviewed by Dan Murphy, Correspondent, CNBC, and Martin Soong, Anchor, CNBC.
Dan: We just had the release of the leading maritime centres of the World report, and again Singapore has been ranked number one. No real surprises there, but is that a position that is getting harder to maintain?
Esben Poulsson: Well whenever you are number one there's only one place to go and that's not where you want to go. So we have to keep working hard to stay number one and we have worked hard. I think and of course we're very, very happy indeed that this is, that this outcome has been the case.
Dan: And Singapore for a long time has been known as the gateway to Southeast Asia and the world, but recently we've seen regional rivals really working to take that crown away from Singapore- the likes of Shanghai on the rise specifically. But what does Singapore need to do to ensure its relevance and to ensure that it stays competitive as an International Maritime Centre?
Esben: I think there's two aspects to this. One is the port, that Singapore is a very, very major port. Huge investments are being made in expanding the container aspect of the port up to TUAS which will open in 2027 with a TEU capacity of about 65 million…an enormous and very high tech port. So that's one part of the equation. The other part is Singapore is a ship owning centre. We have now about 140 international companies in Singapore of about 28 different nationalities and so we have a real cluster that hub effect which then means that the ancillary services around the ship bonding side of it has also increased legal insurance, ship booking and many other ancillary services. So, these two things work in tandem as far as an international centre is concerned and I think on that score, Singapore is doing well.
Dan: The executives that we've been speaking to today have really been providing a bit of a mixed outlook on sentiment and prospects moving forward. On the one hand, offshore still looks pretty negative, but some of the other executives are saying that there are opportunities out there specifically when it comes to dry bulks for example. How would you describe sentiment in that space now?
Esben: Well we always say in shipping, fortune favours the brave and you can say that about almost any industry but I think the Dry Bulk segment hit a sort of a low in about a year ago…February of 2016 where the BDI Baltic Dry Index was at around 290. Today it's in excess of twelve hundred. Now I might say that 290 was below operating costs so you have to see it in context but nonetheless it is a significant increase and certainly in terms of asset values from that low of a year ago, they have increased, you know, fairly substantially. So the Dry Bulk space is and is better than it was 12 months ago, that's for sure and I think the sentiment is better all around. You know people are a bit more optimistic about Dry Bulk One Belt, One Road. The infrastructure developments in the U.S. and many other aspects and sort of…sort of helping the psychology and the sentiment of the Dry bulk segment.
Dan: Well let's bring in Martin Soong and Kumar. I'll get back at the SGX and Martin has a question for you.
Martin Soong: Yeah Esben good morning. Great to see you. Thank you for joining us on the show. I want to ask you sort of a practical operational question and that is what the situation is for shippers including your members of course in the Strait of Malacca with regards especially to piracy. What's the situation like?
Esben: Now that problem has improved tremendously over the years, we in Singapore Shipping Association now work with ReCAAP at the regional centre for piracy prevention and with the international community generally. So the piracy situation in the Straits of Malacca is hugely improved, although it still goes on in a very limited basis and typically on small craft. I think this problem is has largely been dealt with.
Dan: Can I also ask you that sentiment more broadly as well again when you look at a lot of the rhetoric coming out of the United States, the President Donald Trump really pushing throughout the course of his campaign and the start of his presidency this anti-trade rhetoric. Again that was a theme that also played out throughout the course of the French elections as well. What does that mean for Asia specifically when you see a lot of that negative sentiment coming out of the U.S. and Europe?
Esben: Well, we were talking about this at a conference yesterday and fortunately as we have seen on many areas what President Trump said during the campaign and what has happened since he has enter the White House are not exactly the same thing. We are of course a bit concerned about some of the noises regarding free trade because free trade for shipping is just crucial and fundamental. And in my humble opinion what the shipping has done for the world in terms of world trade, this contribution to world trade is absolutely enormous and I would argue with anyone that we have really played our part as a resilient, responsible industry to free trade so we certainly do not wish to see this change. What will happen going forward some of the noises we're hearing are not great. But generally speaking, we feel that that ultimately what we see as common sense will prevail and that Trump will carry out the right policies which is in favour of the U.S. itself as much as anyone else in terms of free trade.