THE LEADING MARITIME CAPITALS OF THE WORLD 2O19

A Menon Economics and DNV GL Publication A Menon Economics and DNV GL Publication

Authors: CONTENTS Menon team: Erik W. Jakobsen, Sunneva Juliebø, Lars Martin Haugland, Håvard Baustad DNV GL team: M. Shahrin Osman, Deepti Sewraz, Alina Villemin EXECUTIVE SUMMARY 4 Design: Ludvig Holmen THE MARITIME INDUSTRY 8 Daniel Barradas

Photos: iStock THE LEADING MARITIME CAPITALS OF THE WORLD 12

SHIPPING CENTERS 18

MARITIME FINANCE AND LAW 24

MARITIME TECHNOLOGY 28

PORTS AND LOGISTICS SERVICES 34

ATTRACTIVENESS AND COMPETITIVENESS 38

THE LEADING MARITIME CITIES OF THE FUTURE 42

APPENDIX A: LIST OF OBJECTIVE INDICATORS OF 30 CITIES 44

APPENDIX B: METHODOLOGY AND DATA SOURCES 46 EXECUTIVE SUMMARY 1 2 3 4 5

SINGAPORE HAMBURG ROTTERDAM HONG KONG LONDON

RANKING ore than half of the world’s population live in each pillar, these come in the form of the perception Mcities and it is predicted that two-thirds of the and assessment by nominated business executives – OBJECTIVE INDICATORS SUBJECTIVE INDICATORS world population will be living in urban areas by 2050, mostly shipowners and managers – from around the according to United Nations estimates. The impor- globe. Of these 200 experts called upon for this study, tance of city regions will therefore continue to grow. around 40% are based in Europe, 30% in Asia, and the Cities are the centers of knowledge, talent, innova- remaining 30% are from America, Middle East and tion and specialization of production and services. In Africa. today’s world, particularly for the maritime industry, Singapore maintains its position as the leading cities are to an increasing extent competing to attract maritime capital of the world. Despite the “new the best companies, startups and most talented normal” economic conditions in traditional shipping people. The winners in this race for attractiveness and the still weak offshore service market, Singapore are – and will continue to be – the leading maritime has been able to retain its position as a world leading centers of the world. maritime hub due to its strength in all pillars. Two years after its last publication, the 2019 edition Singapore is still outperforming other cities in the of Leading Maritime Capitals report is back, with a Shipping Centers, Ports and Logistics, Attractiveness fresh insight about which maritime capitals provide and Competitiveness pillars, and for the remaining the best support, in terms of soft and hard infrastruc- two pillars it is within the top 10 cities. ture and world-class talent, to allow maritime busi- Whilst Singapore, Hamburg, London and Tokyo nesses and people to connect and thrive. Similar to have maintained their previous ranking, other cities its previous editions, the LMC 2019 report covers 5 have seen an improvement in their overall score. pillars – Shipping Centers, Maritime Finance and Dubai has climbed up by one rank and is now in Law, Maritime Technology, Ports and Logistics, the 9th global position for leading maritime cities, Attractiveness and Competitiveness – on which the followed by Busan which also saw a positive move in maritime cities are benchmarked. Under each pillar its in score. It is, however, Rotterdam and Hong Kong a comprehensive set of objective and subjective indi- that show the greatest development in their rank. cators have been considered. For the 2019 report, Rotterdam has moved up three places and is now some new and more comprehensive objective and ranked 3rd and Hong Kong, with a similar upward subjective indicators as well as data sources have move, is now in the 4th position. Rotterdam has been used to ensure that the analysis is based on reli- improved its score across all pillars, with the biggest able and complete data for the various cities, which positive change in the Shipping Centers pillar, with ultimately allow for a more refined benchmarking an increase in the size of its controlled as well as of the relative performance of each city compared to managed fleet. The fleet controlled by owners based in the previous report. For the subjective indicators on Rotterdam has increased by 50%, whilst the fleet size

4 5 that is managed from there has grown by close to 60%. experts voted Singapore, Oslo, Copenhagen and Rotterdam has moved up in the Maritime Finance London to be the cities best prepared for the digital and Law pillar, largely due to a 50% increase in loan transformation of the industry. Oslo has also forged value from 2017. Unlike Rotterdam, Hong Kong’s its position as the world’s leading center for sustain- improvement has not been across all the pillars. Its able technologies and solutions for the oceans. score has climbed up in three of five pillars; Shipping Looking five years into the future, our experts still Centers, Maritime Finance and Law, and Ports and predict that Singapore will keep its position as the Logistics pillars. Hong Kong is popular for its strong global leader, while Shanghai is expected to increase infrastructure in promoting and supporting the ease its importance and become the second most impor- of conducting shipping business there, with efficient tant maritime city. The race to be the leading city in customs procedures. Hong Kong is ranked 2nd by the Europe is still open with Oslo, London, Hamburg, industry experts as the most attractive location for Athens and Rotterdam as the leading contenders in shipping operations. In terms of the number of listed this regional race. In the Middle East, India and Africa maritime companies on their local stock exchanges, region, Dubai is the leading maritime center and at a Hong Kong has also boosted its numbers since 2017, global level, now ranked 9th. The experts predict that indicating that it is an attractive market for registering Dubai will continue to grow in importance and could new stocks. When considering the trading volume of be in the top five of the world’s most important mari- bonds, IPO and follow-on offerings from each city’s time centers by 2024, albeit with strong competition stock exchange during the period 2017 to 2019, Hong by the European cities as well as Hong Kong. Kong is in the 2nd position right after New York. An interesting observation is that most cities are ranked consistent across the objective and subjective indicators. Two cities stand out: Oslo and Tokyo. Oslo is ranked 2nd on the subjective indicators, but only 10th on the objective (down 7 places). For Tokyo, the story is the other way around: 3rd on the objective, but only 11th in the subjective. The main reason for Oslo’s weak ranking on the objective indicators, is the lack of a substantial port, giving Oslo a 50th place on the Port and Logistics pillar. The same holds for Copenhagen, a city that is ranked 8th on the subjective indicators and only 16th on the objective. For Tokyo, the explanation is not as straightforward, because Tokyo is ranked lower by the maritime experts on all five pillars than on the objective indicators. The maritime industry is on the verge of a digital transformation including the adoption of disruptive and innovative technologies. The maritime industry

6 7 THE MARITIME INDUSTRY

AIMING FOR AN EFFICIENT GLOBAL REACH of USD 12 144), while the Baltic Dry Index reached a level of 690 China, all serve as important remainders how fragile the inter- regional, often located around the shipowning companies. Ship points in March 2019 after a relative volatile recovery from the national system is. What is clear, however, is that geopolitical finance was among the first to globalize, while legal services, due or decades, the world economy has become increasingly inte- record low level reported in February 2016 (a score of 291). The tensions and trade policies will continue to influence the industry to national jurisdictions, have been the most national of the mari- grated with a shift of global economic power to emerging F offshore market is also characterized by a large part of the OSV going forward just as it has done for the last centuries. time services. English law firms have been the exception, with economies. According to Peter Dicken, a British professor of fleet in lay-up, and yards around the world are struggling to fill Transnational companies operate across the entire world, branches in shipping hubs all over the world, since English law Economic Geography, a “global shift” (Peter Dicken, 2015) has up existing capacity. With one of the largest bankruptcies in ship- taking advantage of economic differences by locating their busi- is commonly chosen as the jurisdiction in contracts of trade and transformed the world economy. The main characteristics of ping recorded in 2016, with South-Korean container giant Hanjin ness activities in the most attractive locations. This global trend chartering. this shift are market integration, strong growth in international Shipping filing for bankruptcy, other players in the shipping has been a key factor why world GDP has doubled since 1995 and Today, most maritime services are globalized. For example, trade, foreign direct investments, the emergence of transnational industry have been looking into consolidation and cost efficien- world trade has quadrupled. At the same time, it also represents the five leading classification societies class 82% of the world’s companies and a dramatic increase in interdependence between cies. In the past recent years, new alliances have occurred, with, a tremendous challenge to countries: it can no longer be taken for ships, and the two largest book runners for ship finance cover one nations. Although the globalization process does not seem as for example, German Hapag-Lloyd’s merger with the Middle granted that companies will stay in their home countries. To an sixth of the global market. Even port operations are becoming straight-lined as it did some years ago, the world will continue Eastern container shipping line United Arab Shipping Company increasing extent, states and cities must compete to attract and globalized. One of these companies is the Port of Singapore to be highly interdependent and bound together by shipping and (UASC), CMA CGM’s acquisition of Singapore’s national carrier retain international firms. In other words, they have to be attrac- Authority (PSA) that was corporatized in 1997. PSA is now one maritime activities. NOL/APL, and the amalgamation of the container segment of tive hosts. of the world’s largest port operators with operations in many key Shipping has and will continue to play a vital role for interna- Kawasaki Kisen Kaisha, Ltd. (K Line), Mitsui O.S.K. Lines, Ltd. Shipping has always been an international industry. In fact, markets. tional trade and the division of labor. The growing demand for (MOL), and Nippon Yusen Kabushiki Kaisha (NYK), to form the shipping is the premise for international trade. A central driver Partly as a contributing factor to, and partly as an effect of global raw materials and goods in China and other emerging markets new joint venture Ocean Network Express (ONE). for the global shift described above has been the operational and markets, maritime companies have also become globalized. For lead to a commodity boom and shipping market bonanza in The world in 2019 might continue a path of becoming increas- technological development of the shipping industry, which has example, the Swiss-based Mediterranean Shipping Company the early 2000s. From 1995 until today, world GDP doubled ingly integrated, but recent political events suggest that the world lowered transportation costs dramatically. With the emergence of (MSC) has a worldwide presence with close to 500 offices in 150 and world trade quadrupled. However, in the last few years we might be heading in the exact opposite direction. For example, the standardized bulk carriers, oil and other raw materials could be countries and close to 25,000 employees. The structure of the have seen both weak GDP growth and a weakened relationship US threatening international cooperation and trade, the messy traded globally. Today most shipping markets, including cruise, companies varies greatly, but the dominant trend is to build corpo- between GDP growth and demand for shipping services. The and damaging disentanglement of Britain from the European offshore and car carriers, are globalized. Maritime services, rations around specialized business units with a global reach. ClarkSea Index (measuring earnings for the main vessel types) Union, and other political feuds between several countries and however, have until the last decade been relatively national or The John Fredriksen Group is a good example of this. The group ended above USD 10,000 at the end of year 2018 (year average

8 9 use of AI-powered algorithms for optimized stowage plans for container ships. With the force at which digitalization is propagating and newly emerging disruptive technologies springing across the globe, there is an increasing and critical need for a radical improvement of the digital infrastructure for the maritime industry, and an environment that supports the collaboration between maritime companies, technology companies and progressive regulators and assurance providers. A location that can offer this will have a strong competitive edge.

ALTERNATIVE FUELS AND TECHNOLOGY Global environmental concerns about the invasion of aquatic organisms, GHG (greenhouse gases) and SOx emissions from the shipping industry, have led the IMO in recent years to imple- ment initiatives aimed at limiting the impact of these. As a conse- quence, ballast water management has been implemented and the carriage ban of fuel with more than 0.50% sulphur content will be enforced as of 1st January 2020. Other potential game changers in the maritime industry include the Tier III NOx requirement, the stronger push for new vessels having improve EEDI (Energy Efficiency Design Index), as well as measures for monitoring and reporting of CO2 emissions from both the EU and IMO. To navigate in such regulated waters, potential solutions have become available in various parts of the world, whether from scrubber manufacturers or providers of alternative fuels such as consists of companies specialized in segments like rigs (Seadrill), tainties about the extent and momentum to which digitalization LNG. There is thus a need for countries and cities to provide an crude carriers (Frontline) and dry bulk (Golden Ocean). The loca- will affect them, based on concerns related to the need to stand- infrastructure that supports such upcoming aspects of the mari- tion of companies has also become globalized. Value chains split ardize digital practices, and the change of organizational culture time industry. up, with headquarters located in financial centers, operating units and mindset. Considering this global view of where maritime industry is close to markets, and R&D units in knowledge hubs. The group Under the umbrella of digitalization, we have assigned another heading (in terms of its global reach, its uptake of digitalized is also an example of how some companies are broadening their hot topic in the maritime industry: cyber security. Vessels are and innovative solutions, its requirement for new fuels), there focus to more than one specific segment. Both the Fredriksen becoming smarter constantly as they increase their connec- is a strong competition on which capitals around the world will Group and A.P. Moller-Maersk Group are examples of groups tivity, control and most importantly their operation is based on provide the best support, in terms of soft and hard infrastructure that focus on broadly diversified segments within the industry Operational Technology (OT). This provides tremendous benefits and world-class talent, to allow maritime businesses and people – although Maersk has decreased their strategic scope recently. in terms of safety, availability, and energy efficiency, but at the to connect and thrive. same time opens doors to cybercrime which is recognized as DIGITAL TRANSFORMATION, CYBER SECURITY the biggest emerging challenge of the industry in 2017 alone, the AND INNOVATION total cost of cyber threats to shipping is estimated at more than 1 billion USD. Cyber security is thus increasingly becoming an Digitalization is happening across all industries and change the integrated part of the safety topic of maritime companies, with way we work and live. For the maritime industry, whilst disrup- the strategic decision of many big maritime players to establish an tive innovation is the current buzzword, its digital transforma- Information Security Management System and seek compliance tion is under way, challenging existing business models but also to the robust ISO 27001 standards to build confidence among offering new opportunities. their stakeholders. Digital capabilities are important in the entire maritime In terms of disruptive innovation, the maritime industry has industry, which is already seeing a trend whereby crew size is already been introduced to it, whether in the form of additive steadily decreasing, whilst software, automation, centralisation manufacturing or as the concept of autonomous ships being and interconnectivity are on the rise. Many maritime companies operated remotely, to name a few. The port of Rotterdam will are already quite technology-driven, with most of their bookings have its own ‘Additive Manufacturing FieldLab’ with 3D metal and orders coming through the internet, their internal processes printers. This lab will provide port-related companies with a based on digital solutions – and with some shifting to using block- collective location to accelerate developments in this area and chains to increase their operational efficiency and transparency – to work together on applications for the maritime industry. as well as their infrastructural and/or assets’ operations based on Yara Birkeland, the world’s first fully-electric, zero-emission cyber-physical systems (systems coupling digital software with and autonomous container ship developed by Kongsberg in hardware). To adapt to this new reality, some shipping compa- collaboration with Yara, is due to be launched in 2020 and will nies and maritime technology providers have a designated Chief operate within Norway. Another upcoming area is the develop- Digital Officer (CDO) on their management team. However, for ment of algorithms for predictive maintenance and asset integ- most other players in the maritime industry, there are still uncer- rity, wider application of Drones for maritime sector and the 10 11 THE LEADING MARITIME CAPITALS OF THE WORLD

CITIES – ENGINES OF INNOVATION AND generates more opportunities for interaction and communica- to attract them. As the maritime industry is global in nature, • Owners and headquarters GROWTH tion, promotes creative thinking, creates knowledge spillovers many maritime companies are mobile entities seeking to take • R&D – product and technology development and develops new ideas and technologies. Cities also facilitate advantage of localization advantages in different countries. This, • Financial, legal and other sophisticated business services rbanization is one of the strongest global megatrends in trade and commerce by providing super market places. Hence, combined with the maritime industry being a high value-added this century, with a clear shift in importance from nations U all knowledge-based industries tend to centralize in a few leading industry, means that the fight to attract maritime companies While many cities are important centers in today’s maritime to cities (Moretti, 2012; Quartz, 2015). Today, more than half of city regions; San Francisco for ICT, Boston for biotechnology, is tough, especially for shipping being the most highly mobile industry, some researchers suggest that we might see a future the world’s population live in cities. These cities generate 80% of Houston for oil & gas, London for finance – and Singapore for sector within the maritime industry. This also implies that it is concentration of shipping activity (Center for Liveable Cities, global GDP (World Bank, 2017). In 2016, there were more than maritime. It is not, however, a “winner-takes-it-all” game. There easy to lose maritime business activities. The gains from winning 2014). Martin Stopford was one of those who proposed that we 500 cities globally with more than 1 million inhabitants (United is room for cities with leadership in niches of industries, like the location race are hence higher for the less mobile part of the will see a development of two or three global centers characterized Nations, 2017). China alone is home to more than 100 cities with Geneva in medtech, and London in fintech. There is also room industry. as “shipping super cities” - one city in each of the eight-hour time more than 1 million inhabitants, a number that is likely to double for cities with regional leadership, like Shenzhen in ICT and Specialized knowledge-based services are probably the least zones (Asia, Europe and the Americas). This will mean that some in the next decade. Companies are increasingly focusing on city Singapore’s Biopolis for biomedical science. mobile companies in the maritime industry. The reason being of today’s shipping centers will lose importance to a few global regions when developing their strategies for relocation or expan- that knowledge-based companies often have links to universi- centers that will act as shipping service hubs. Stopford also went sion of their operations. Population projections show that virtu- MARITIME COMPANIES – RESTRUCTURING ties and are deeply embedded in the local milieu; for example, in further, dividing the cities into cargo port cities and shipping ally all growth over the next 30 years will come in urban areas. WITHIN A GLOBAL PLAYGROUND their reliance on specialized local competence. Another impor- services ports. Port cities, such as Rotterdam and Shanghai, are Every year the world’s cities are growing by 60 million people, tant point, following from the fact that firms increasingly split up mainly driven by their role of transporting cargo to the regional roughly equal to the current population of the United Kingdom. Aware of such international competition, cities are developing their value chains, is that cities compete to attract activities – not markets. In shipping services ports, on the other hand, the port is The influx and agglomeration of people, companies and invest- strategies to enhance their attractiveness to highly productive companies. The winners in the future will be those cities that are secondary while offering other services to the international ship- ments is fueled by the vibrant knowledge-creation and innova- and innovative companies, and to talented individuals. The more able to attract: ping industry will be key. tion of the cities. High concentration of competent people in cities mobile the companies, the stronger the competition among cities • Science and higher education 12 13 DRIVERS OF COMPETITIVENESS BENCHMARKING BASED ON OBJECTIVE & For the maritime industry in a city to prosper, two conditions SUBJECTIVE INDICATORS There are lots of inter-connected factors that drive the attrac- must be satisfied: the companies must be competitive, and the city 50 NOMINATED MARITIME CITIES tiveness of a city and the competitiveness of the industries located The Leading Maritime Capitals report for 2019 is the fourth must be attractive as a host for these companies. These two condi- ORDERED BY RANKING ON THE there: edition of this report. Again, the ranking was based on a combi- tions are mutually dependent: the companies gain their competi- OBJECTIVE INDICATORS • Strategic location nation of objective data from leading sources and subjective tiveness from resources available in the city; for example, access to • Favorable and stable political framework measures to assess and benchmark the 15 leading maritime cities. capital, talent and specialized supplies – and the price they must SINGAPORE • Transparent and efficient legal framework This approach offers the advantage of considering both hard facts pay for these resources. Accordingly, the attractiveness of the city ROTTERDAM • Proximity to large, demanding customers (objective indicators) as well as expert opinions (subjective indica- increases when competitive companies are present in the city. • Local rivalry – creates incentives to continuous improve- tors) in areas that are difficult to measure with available objective HAMBURG Hence, the clue is to attract the winners (Jakobsen, et al 2003). ments and innovation data at city level (such as regulations, cluster dynamics, techno- TOKYO Over time, the attractiveness of the cities is gradually shaped by • Abundance of suppliers and service providers logical expertise and other capabilities). LONDON the dynamics of the industry. In an industry with strong cluster • Specialized universities and research institutions One major difference (and improvement) in this year’s report SHANGHAI dynamics, knowledge is continuously improved and dispersed, • Large pool of talents compared to its previous editions is that the identification of HONG KONG upgrading both companies and resources. Finally, governments • Rich and open flow of knowledge and ideas the top maritime cities in the world is now carried out by using BUSAN play a central role in defining the attractiveness of the city. • Relationships based on trust a bottom-up approach, whereby all maritime cities in the world DUBAI Through various public policy factors like taxes and subsidies, • Meritocratic education and career system are initially considered before being narrowed down to the top 50 OSLO they determine the price of capital, labor and other input factors. • Soft location factors – an attractive place to live for families through several rigorous elimination and ranking rounds across NEW YORK The quality of the resources is to a large extent determined by and individuals the different pillars. In the previous reports, a top-down approach COPENHAGEN investments in infrastructure, education and R&D. was used which was based on the subjective nomination of top HOUSTON The four main elements in the model, public policy factors, the Together, these factors produce spirals of self-reinforcing 30 maritime cities in the world. The revised bottom-up approach ANTWERP competitiveness of the companies, the attractiveness of the cities, growth – or decline, if the factors are absent. The mechanisms instead allows for the objective selection of the top 50 maritime ATHENS and finally, the dynamics of the industry clusters, are measured that drive industry competitiveness are summarized in the model cities before the leading 15 cities are extracted for further ranking and benchmarked for the maritime industry in 30 cities. MUMBAI below. through the subjective assessment by nominated business execu- GUANGZHOU

tives from all around the globe. The main benefit is that this new SEOUL

approach is more transparent and comprehensive. Note that with HELSINKI

this year’s bottom-up approach, direct comparison of values KUALA LUMPUR between 2019 and 2017 is not possible as some cities are out of THEORETICAL MODEL OF INDUSTRIAL COMPETITIVENESS ISTANBUL sample in the 2017 ranking. The approach is illustrated as follows: BERGEN Source: Jakobsen et al, 2003 (Attracting the winners) MIAMI

DALIAN

NEW ORLEANS ALL MARITIME CITIES IN THE WORLD IMABARI

JAKARTA COMPANY LOS ANGELES COMPETITIVENESS SEATTLE 50 NOMINATED CITIES VANCOUVER OPERATIONAL EFFICIENCY & - benchmarked on objective indicators only PARIS STRATEGIC RESOURCES QINGDAO

GLASGOW PUBLIC POLICY GENOA CLUSTER DYNAMICS BEIJING 15 LEADING MARITIME CITIES Fiscal and monetary policy LONG TERM KOBE Demanding customers RELATIVE - benchmarked on both objective indicators and Local rivalry expert assessments Tax & subsidies INDUSTRY MARSEILLE Regulations Cooperation PERFORMANCE WASHINGTON D.C. Labour market Open information and trust Education Mobility of competence ABERDEEN R&d TIANJIN

NINGBO CITY PANAMA CITY ATTRACTIVENESS SYDNEY LIMASOL (Availability, quality and price) HO CHI MINH Talent, capital, infrastructure, connectivity, business friendliness, living conditions, etc. STOCKHOLM

MANILA

SAINT PETERSBURG

DURBAN

VALLETTA

14 15 INDICATORS FOR CITY RANKING There are numerous ways to assess the strength of ecutives – mostly shipowners and managers – from all the maritime cities. Data sources that are widely used around the globe. Of these 200 experts called upon for and renowned in the industry have been used. Method- this study, around 40% are based in Europe, 30% in ology and data sources for the indicators are described Asia, and the remaining 30% are from America, Middle in the appendixes. East and Africa. In this year’s report, for the objective assessment, The study uses a ranking model consisting of objec- previously used objective indicators were revised to be tive and subjective rankings that are weighted 50% based on new databases whilst new objective indica- each. All indicators are normalized to allow compari- tors were also included. The overarching aim has been sons of different data on a common scale. After nor- to ensure that the analysis is based on reliable, com- malizing the data, an arithmetic average is used to rank plete and improved data quality for the various cities. the different cities within five main pillars. Each pillar Hence, adjustments to the data sources and/or indica- is weighted 20 percent. The five pillars of the study are tor set, where deemed necessary, have been made. For the same as in the last edition of the report: Shipping, the five pillars in this study, a total of 25 objective indi- Maritime Finance and Law, Ports and Logistics, Mari- cators have been used. time Technology, and Competitiveness and Attractive- For the subjective assessment, this comes in the form ness. The full list of indicators is described in these ta- of the perception and assessment by key business ex- bles.

16 17 “The maritime industry will transform; the SHIPPING CENTERS liner & tanker industry will consolidate leading to merging of suppliers such that only the big SUMMARY and efficient players or the small and highly innovative players will survive” 1 2 3 4 5 – INDUSTRY EXPERT FROM SINGAPORE

SINGAPORE ATHENS HAMBURG HONG KONG SHANGHAI

hen assessing the importance of the have increasingly moved away from Europe, RANKING OF SHIPPING CENTERS Wworld’s shipping centers with an equally and today many Asian cities are more impor- weighted combination of four objective indica- tant for operations than traditional European OBJECTIVE INDICATORS SUBJECTIVE INDICATORS tors and subjective evaluations from 200 leading centers. It should also be noted that European maritime professionals, Singapore, Athens and ownership dominance is actually on a gradual Hamburg take the top three spots in the total decline, as Asian shipowners have taken most ranking of the leading shipping centers. With of the fleet growth in the last few years. Since Hong Kong and Shanghai coming next in the 2012 the European share of the world fleet (in ranking, this means that three of the top five terms of GT) has fallen from 47 to 35%. Asian shipping centers are now located in Asia. This owners on the other hand are increasing their is a change from the 2017 edition of this report, market share and now control 41%, up from where European maritime cities were leading 38% in 2012. In particular, Chinese owners the top five. have increased their share of the fleet and now A general observation for the shipping own 12% of the world fleet. pillar is that the Asian-based maritime cities Based on the objective indicators, Athens have either maintained the same ranking and Singapore are the leading shipping centers, as the 2017 report (Singapore) or improved followed by Hamburg and Tokyo. This ranking their ranking such as Hong Kong, Shanghai, is, to some extent, aligned with what the experts Tokyo and Busan. In Europe, it is only Athens say, with Singapore and Hong Kong in the lead, and Rotterdam that have moved up in their followed by Athens and Hamburg. The main ranking, with the biggest improvement by difference lies with Tokyo, which is subjectively Rotterdam which moved four places up. Most ranked 11th. This is possibly due to Japanese of the leading maritime cities in Europe in this owners being focused on local cooperation ranking have suffered a downgrade, such as instead of having a global outlook. Shanghai is Hamburg, London and Oslo. ranked as the 5th strongest shipping city in the Globally, there has been a 9% rise in the world, with an equal score both on the subjec- world’s fleet value since 2016. The world’s total tive and objective criteria. fleet value is concentrated in the US, Japan, Singapore’s strength lies, to a large extent, China and Greece whilst Europe currently in its geographic location with close proximity remains an important center for shipowners, to important markets. The city is a key market with roughly 40% of the world fleet value being place for shipping with an important center controlled by owners based there. However, for commercial management. Our industry whilst Europe has historically been domi- experts rank Singapore highest, while the city nant when it comes to ownership, operations scores slightly weaker on the objective criteria.

18 19 “The ability to develop technology that will meet the new requirements imposed by environmental challenges and changing regulatory framework”

– INDUSTRY EXPERT FROM OSLO

EXPERT ASSESSMENT London, Hong Kong, Hamburg and Oslo should as the most attractive location for shipping they be given the choice to relocate their operations and is in 3rd position when it comes Still Singapore keeps its position as the leading ship- When measured at city level, the worlds’ fourth For the shipping pillar, the expert panel identi- companies’ headquarter. This ranking is slightly to attracting shipping companies’ headquarter fied Singapore, Athens and Hong Kong as the different when it comes to choosing a city for for relocation. ping center in the world. Singapore is home to the third largest fleet is controlled by owners in the Hamburg overall three leading cities. This is a change from operating their fleets and companies; Dubai and Athens is placed 3rd on the subjective ranking. largest fleet in the world (at city level), while the second region, making it an important shipping hub in Europe. the 2017 analysis since Hong Kong and Athens Shanghai are in the top 5 preferred locations, Greek shipowners have been important in the largest fleet is managed from the city. This demonstrates Industry experts also rank Hamburg as one of the five were not perceived to be in the top 4 as shipping displacing London and Oslo. shipping industry for decades and the country the strength in operational capabilities in the city. One leading shipping centers of the world. Despite this, the centers, with their positions formerly taken by Singapore has a strong position, both com- used to be home to key industry players such as of the industry experts highlights that the presence value of the German fleet has fallen over the last years. Hamburg and London. Oslo, Dubai, New York mercially and operationally, and is also an Aristotle Onassis and Stavros Niarchos. Greece’s and Busan have also fallen slightly in their overall important meeting place for shipowners even if shipping magnates have emerged largely un- of many foreign owners in the city. This illustrates Owners in Hamburg have focused on container ship- ranking as shipping cities by the industry experts. many of them are not originally from Singapore. scathed from the country’s financial crisis and Singapore’s global attractiveness. At the same time, it ping, a segment that has seen low rates and large bank- This new perception from the industry experts An important reason for Singapore’s popularity is one of the industry’s longest downturns. Today, could also be a sign of vulnerability, because foreign ruptcies during the last years. The shipowning commu- about the ranking of these maritime cities is due its stable pro-business environment. In the recent the shipowning environment is still strong, even companies probably are more footloose than domestic nity is also not very strong, the reason for this being that to various factors as explained below. editions of the World Bank’s “Ease of doing though many of the Greek shipowners run their companies. most of their fleet has been financed through KG struc- When considering the breakdown of the Business” Index, only New Zealand has been business from other cities. Athens’ strengths lie in an impressively large and tures, leaving the individual owners with little control industry experts’ assessment for the shipping ahead of Singapore. pillar, it is seen from Figure 1B that the preferred Hong Kong has achieved an overall 2nd posi- strong shipowning community. Athens is home to the over the fleet. The KG structure is a limited partnership maritime cities for all key shipping activities (i.e. tion by our experts, which is a clear improvement “The upcoming years in the industry world’s largest fleet and has a strong ownership posi- with typically the sole general partner being a limited ownership, operations and management) are from the previous report. Hong Kong is popular will see continual growth of maritime tion with more than 700 Greek shipowners located liability company. It can thus combine the advantages Singapore, London, Hong Kong, Hamburg and for its strong infrastructure in promoting and shipping industry and shipowners in both in Athens and around the world. Many Greek of a partnership with those of the limited liability of a Oslo. Of the expert pool used in this study, those supporting the ease of conducting shipping busi- Asia, compared with the rest of the shipowners are in cities outside of Greece, something corporation. This could be one of the reasons why rela- business executives with strong insights in ship- ness there, with efficient customs procedures. ping indicated they would prioritize Singapore, Hong Kong is ranked 2nd by the industry experts world” that can explain why Athens only ranks third on the tively few companies would consider relocating their subjective indicators, while it is number one on objec- shipping headquarter to Hamburg. – Industry Expert tive indicators. Furthermore, Athens is being perceived Rotterdam has moved up in the ranking this year, due as primarily serving the local Greek shipping companies to its improved score on the objective criteria. Rotterdam Fig. 1A - Percentage of industry experts that rank Fig. 1B - Preferred city for relocation of the cities as top-five within shipping activities headquarter or operations. Number of shipping companies selecting each city and not international shipping entities and hence the has benefitted from an increase in the size of the fleet that Source: Menon (2019) Source: Menon (2017) With Hong Kong and Athens pushing ahead in experts have voted for other shipping centers that are is controlled as well as managed from the city; the fleet % of industry experts selecting each city % of industry experts selecting each city 100 the experts’ assessment, Hamburg and London 10 20 30 40 50 60 70 80 90 100 0 10 20 30 40 50 60 70 80 90 taking a dominant regional or global role in interna- controlled by owners based in Rotterdam has increased 0 are now subjectively ranked 4th and 6th. The tional shipping. Greek shipowners have played a key role by 50% whilst the fleet size that is managed from there SINGAPORE SINGAPORE drop behind London’s subjective ranking could in the industry for decades, and they are still expected has grown by close to 60%. ATHENS LONDON also be due to the perceived effects of Brexit. to be a strong player also in the future. This view can HONG KONG HONG KONG Over the past few years, industry experts have HAMBURG been acknowledging Dubai as having a strong be strengthened by looking at the development in order- HAMBURG OSLO position in the shipping pillar. When asked about book volume for Greek shipowners located in Athens, OSLO LONDON the current leading shipping centers, Dubai is DUBAI in terms of CGT. The contracted orderbook volume has SHANGHAI ranked 11th but 6th if shipping business execu- COPENHAGEN more than doubled each year since 2016. Thus, Greek COPENHAGEN tives were given the choice of relocating their SHANGHAI shipowners in Athens have experienced an outstanding TOKYO companies’ headquarter. Dubai’s best score ROTTERDAM ROTTERDAM in the shipping pillar is however from industry exponential growth in contracted CGT-values the last NEW YORK DUBAI experts ranking it 3rd relative to other leading few years. ATHENS NEW YORK maritime cities for the operations of a shipping LIMASOL ANTWERP business. This suggests that Dubai is seen as an HOUSTON ANTWERP attractive location for shipping activities and HQ TOKYO BUSAN Operations might be a growing center for shipping in the OTHER CITIES GENEVA future.

20 21 OBJECTIVE INDICATORS’ ASSESS- In addition to ownership, the size of the fleet more than USD 487 bn which is about half of the MENT managed from the different cities were also world fleet’s value. This share illustrates how im- considered. For an international industry like portant these 15 cities are in the global world of To be recognized as a leading center for ship- the maritime business, ownership and manage- shipping. Tokyo and Athens have increased their ping, a city must be the registered home to a ment of companies can easily be split up to take fleet value from 2017, whilst a drop in fleet value strong number of shipowners and managers, advantage of specialized local competence in is observed for Singapore and New York, possibly both in terms of their fleet size as well as fleet different cities. For example, in Singapore, whilst as a result of a decrease in their fleet size either value. The number of shipping companies that its shipowners control a fleet of 45 million CGT, through the sale or the scrapping of ships. chose to have their headquarters in a particular the city is of such importance for the manage- The composition of the merchant fleet differs city will further impact this city’s ranking in ment of other fleets that the figure is almost between cities. Athens might be best known our benchmarking assessment of the objective 60% more when measured in terms of managed for being home to a large tanker fleet, but the indicators for the shipping pillar. These objective fleet. An even stronger effect is seen in Busan; city also has a substantial fleet within the bulk, indicators rank Athens first due to its position as the city manages a fleet that is more than four container and gas carrying segment. Tokyo has a city controlling and managing the largest and times as large as the owned fleet. Similar effects a well-diversified fleet consisting of bulkers, most valuable fleet. Singapore comes second, are observed in Vancouver, Limassol, Glasgow tankers, ro-ro vessels and gas carriers. Hamburg while Hamburg ranks third. and Manila. is quite specialized within containerships, while As of March 2019, the world orderbook in It can also be noted that whilst New York plays Singapore has its strength within tankers, terms of GT is dominated by Japanese, Chinese a key role in financing maritime operations, its bulkers, offshore and containerships. and Greek owners. When considering the commercial and operational capacity is weak. number of ships on order, the leading owners’ The fleet managed from New York is only 40% NUMBER OF SHIPPING HEADQUARTERS country are Japan, China, Singapore, Norway of its controlled fleet. Such weak fleet managed and Greece. This suggests that, from an objec- to fleet controlled ratios are also observed in The location of shipping companies is a strong tive point of view, Athens is likely to keep its Seoul, Tokyo, Imabari and Oslo. indicator of a city’s attractiveness. Figure 4 position as a significant ownership city, while shows the number of shipping companies with the importance of both Tokyo and Shanghai will VALUE OF CITY-CONTROLLED FLEET headquarters in each city. Athens is ahead of all continue to rise. other cities for this indicator with 193 shipping Another means of benchmarking the cities is by companies registered there, followed closely by SIZE OF SHIPOWNERS’ FLEET AND MAN- considering the value of the fleet controlled from Singapore and Jakarta. Next in line, but with a AGEMENT OF FLEET these cities. As opposed to the size of a fleet, drop of almost half of the amount of shipping the value of the fleet offers a better reflection companies that are headquartered in Athens In Figure 2, cities are ranked by the total fleet of its economic importance. This evaluation are Hamburg and Tokyo. Rotterdam, Istanbul, in compensated gross tonnage (CGT) based on is based on data from Clarksons World Fleet Dubai have on average 66 shipping companies owners located there. Data was compiled for Register and estimating the value of share of the headquartered there. It should be emphasized, the entire world fleet and vessels were then as- fleet controlled from the city out of its nation. however, that although only companies with signed to individual cities where their owners are Globally, there has been a rise in the world’s fleet at least 5 ships are included, cities with many located. Athens comes out strongly in the first value in the past recent years, with USD 873 bn small companies are favored on this indicator position, with an owned fleet of 97 million CGT, in 2016 compared to USD 951 bn as of March compared to cities with few but large companies. followed by Tokyo, Singapore and Hamburg each 2019. The world’s total fleet value is concen- Copenhagen, with the A.P. Møller-Mærsk head- of which have only half this amount. By looking trated in the US, Japan, China and Greece whilst quarter, falls weak on this indicator. at owners located in a city and not at a country Europe currently remains an important center for level, hubs like Singapore and Hong Kong will shipowners, with roughly 40% of the world fleet increase their relative importance. National value being controlled by owners based there. numbers will generally include several shipping At a city level, as shown in Figure 3, the top communities located within a country. 15 cities in this ranking control a fleet valued at

Fig. 2 - CGT owned by shipmanagers registered Fig. 3 - The 15 most valuable fleets in the world. Fig. 4 - Number of listed shipping companies with in the city / Size of fleet (CGT) controlled by Value in Bill USD of the fleet controlled by headquarters in the city shipowners registered in a city companies with headquarter in the city Source: Bureau van Dijk (2017) Source: Clarksons/ Menon (2019) Source: Clarksons/ Menon (2019) Million CGT USD bn 100 100 100 120 140 160 180 200 10 20 30 40 50 60 70 80 90 10 20 30 40 50 60 70 80 90 20 40 60 80 0 0 0

ATHENS ATHENS ATHENS SINGAPORE TOKYO SINGAPORE HAMBURG HAMBURG JAKARTA HONG KONG SINGAPORE HAMBURG TOKYO SHANGHAI TOKYO LONDON MIAMI ROTTERDAM SHANGHAI OSLO ISTANBUL DUBAI IMABARI DUBAI BUSAN COPENHAGEN IMABARI COPENHAGEN SEOUL HONG KONG ROTTERDAM NEW YORK SEOUL ISTANBUL ROTTERDAM LONDON JAKARTA LONDON SHANGHAI LIMASOL Managed MARSEILLE BUSAN Owned MUMBAI BERGEN MUMBAI

22 23 “Funding accessibility seems to be progressively MARITIME FINANCE AND LAW shifting to the Far East and is expected to remain as such whether China (through Hong Kong SUMMARY or Shanghai) will start putting local content, or in-country value assessments to access the funding.“ 1 2 3 4 5 – INDUSTRY EXPERT FROM HAMBURG

LONDON NEW YORK OSLO HONG KONG SINGAPORE

RANKING MARITIME FINANCE AND LAW verall, London is ranked first in the world the world’s two leading shipping banks and has Ofor maritime finance and law, followed by a strong position with a maritime focused stock OBJECTIVE INDICATORS SUBJECTIVE INDICATORS New York, Oslo, Hong Kong and Singapore. exchange and leading insurance and brokering London has a special position in the financial entities. industry globally and is widely recognized for In ship financing, whilst Rotterdam is behind its law-related and marine insurance services. Oslo, it is still considered a leading city in this It is home to world-leading institutions, such aspect, with a 50% increase in loan value from as Lloyd’s for insurance, and English law is 2017. Rotterdam-based banks ING and ABN the most widely applied in shipping disputes. AMRO have boosted their position for both New York, Hong Kong and Singapore together bookrunner loans and in their MLA (Mandated with London, are considered the four leading Lead Arranger) portfolios. global financial cities according to the Global Following the recent shipping crisis, Asian Financial Centres Index. (particularly Chinese banks) have emerged in When it comes to maritime finance, our data ship finance and as of today, three out of global rank New York first, followed by Oslo. New top ten banks are now Chinese banks (e.g. Bank York is home to the world’s largest maritime of China, ICBC, China Exim). When assessing stock exchange and plays a key role in financing top shipping portfolios by banks headquartered maritime operations. In the last few years, the in various cities across the world, Beijing is the importance of private equity in the industry has top performer, followed by Tokyo, Paris, Oslo increased at the expense of traditional shipping and Rotterdam. banks, and New York based institutions have According to the industry experts, there played a key role in this development. There seems to be four cities that stand out for mari- seems to be a roll back now with banks again time finance – London, Oslo, New York but playing the major role in financing. In terms of also Singapore. They ranked Singapore as the the number of listed maritime companies on second most important city even though on their local stock exchanges, Hong Kong, Tokyo the objective criteria Singapore is in the 9th and Shanghai have also boosted their numbers position, behind Rotterdam, Hong Kong and since 2017, indicating that they are attractive Shanghai. markets for registering new companies (IPOs). Oslo’s strong position in maritime finance is mainly due to Norway’s strong historical posi- tion in the maritime industry and the develop- ment of world leading financial services that have supported this industry. Oslo is home to

24 25 EXPERT ASSESSMENT LEADING FINANCIAL CITIES and Shanghai. Singapore, in the 5th position, and investment programs, Chinese lenders, leading city with the highest number of maritime companies insure both the cargo and the hull of traded almost half of what Oslo achieved during leasing institutions and export-import agen- lawyers, followed closely by New York and the ship. Maritime activities tie up large amounts of Maritime cities have been benchmarked based the same period. cies are quickly filling a critical void left by the Athens. Whilst Athens is home to 60 maritime To assess a city’s position in terms of its repu- capital. The industry is characterized by cyclical on the market value and the number of listed retreat of European commercial banks, especially lawyers, Singapore, Hamburg and Hong Kong tation as a market place for insurance coverage markets. Hence, access to capital will determine maritime companies on their local stock ex- BANKS – SHIP FINANCING for newbuilding orders. Prior to the shipping have an average of 30 such lawyers. and its marine insurance services, several factors the long-term success of many companies. changes. New York is by far the largest equity crisis European banks dominated in global ship What these statistics show is that, with English were considered such as concentration of P&I Companies finance themselves by offering market in the world for maritime stocks, both in Whilst New York stands out as the leading financing sector. Five out of global top ten were law far widely used in shipping disputes, London clubs and the collected insurance premium bonds, loans and stocks to owners and other number of tradable stocks and market capitaliza- financial capital of the world, in Europe, Oslo and in Germany, two in Scandinavia, one in the UK, has sealed its position as the best location to at city level, and the presence of commercial financial entities. London, Singapore, Oslo and tion of the companies. Rotterdam seem to be the two leading cities for one in France and only one was based in Asia. resolve maritime disputes and for international insurances covering cargo, hull and machinery New York remain the clear leaders within this Compared to the 2017 results, Oslo has main- ship finance. Oslo-based DNB and Nordea (ship- However, with the crisis many traditional lenders maritime arbitrations. In that aspect, Singapore (H&M). This assessment shows that London, field, according to the industry experts, due to tained its second position when it comes to the ping division) are the two leading ship finance experienced heavy hits on their P&L and were and Hong Kong could be London’s strongest home to the first marine insurance company in their strong positions in banking, law, insurance number of tradable stocks. Hong Kong, Tokyo banks measured in terms of book runner and forced to write-off, reduce or even exit their ship- competitors. In Singapore, the efforts of the the early 18th century with Lloyd’s of London and brokering services. The main difference in and Shanghai have boosted their numbers since MLA (Mandated Lead Arranger) portfolios. In ping portfolios. Due to the shipping crisis, Asian Singapore Maritime Foundation (SMF) to de- and complemented by the International the experts’ opinion compared to the previous 2017, indicating that they are attractive markets Rotterdam, the banks ING and ABN AMRO have (particularly Chinese banks) have emerged in ship velop the city’s own Ship Sale Form and SMF’s Underwriting Association (IUA), continues to assessment is that Tokyo and Dubai are now for registering new stocks. Singapore which was boosted their position for both bookrunner loans finance and as of today, three out of global top involvement in the development of a modern be the unrivalled city for marine insurance with judged to be better in the maritime finance and previously ranked third, has now dropped to the and in MLA. BNP Paribas, based in Paris, is a new ten banks are now Chinese banks (e.g. Bank of Charter Party Form together with BIMCO and more than 50% of International Group (IG) law pillar, whilst Athens, Houston and Busan 7th position in a tie with Kuala Lumpur, noting entry, whereas New York is losing its position, China, ICBC, China Exim). When assessing top Association of Shipbrokers and Agents (ASBA) of P&I clubs covered gross tonnage served by have dropped in this subjective assessment. that Kuala Lumpur, Busan and Mumbai have with Citi falling on both bookrunner and MLA. shipping portfolios by banks headquartered in incorporating Singapore as the location of UK-based clubs, over 30% of global cargo and maintained the same number of tradable stocks Danske Bank in Copenhagen has also fallen in various cities across the world, Beijing is the top arbitration (in addition to New York and London), H&M premium collected by UK-headquartered OBJECTIVE INDICATORS’ ASSESS- since 2017. bookrunner loans while Stockholm-based SEB performer, followed by Tokyo. Considering that reflects the growing importance of Singapore insurance companies and the highest number of MENT In terms of market capitalization of maritime has improved its position in MLA. the recent slowdown in the Chinese economy as a leading international maritime legal center. representation offices of all clusters. However, stocks, Shanghai and Copenhagen have main- Many ships are financed by syndicated loans, and with fewer newbuilding orders, it is ex- The strength of both Singapore and Hong considering the recent acquisition of rival Jardine Eight objective indicators were chosen to bench- tained their 2nd and 3rd ranks, respectively, after which reduce the risk for the individual lenders. pected that the financing from banks based in Kong seems to be related to their proximity Lloyd Thompson (by Marsh’s parent company mark the leading maritime financial and legal New York, even though there was an overall In this process one bank usually functions as the the Far East may also be affected. to commercial operations and access to key Marsh & McLennan Companies), there might be centers. These indicators measure the volume reduction in their values from 2017. On both mandated lead arranger. That means that the industry players, with Hong Kong positioned as a an impact on future ranking for London as the of legal and financial expertise and associated these two exchanges, one or two major compa- bank has the leading role in the financing stage LEGAL CENTERS gateway to mainland China. In the Middle East, company is now headquartered in New York. activities in each selected city – from the number nies dominate the value of maritime stocks. In of a project. During the syndication process one whilst not a direct challenger to London, Dubai There is already a positive development for New of maritime legal experts rooted in each location Shanghai, China Shipbuilding Industry combined of the banks may also fulfil the role of book To assess the strength of cities when it comes is also building its reputation as a maritime legal York; the city has shifted three levels up from our to the volume of mandated loans issued from the with Shanghai International Port Group, has a runner. When the structure and terms of the to maritime law, the use of statistics such as the center. The Emirates Maritime Arbitration Centre previous report and is now in the 4th position financial institutes and companies that provide combined market capitalization of USD 43.5 bn, loan have been agreed, one (or a number) of number of leading legal experts in shipping law (EMAC) was launched in 2016 and aims to serve behind Tokyo and Singapore. financing (debt, equity, mezzanine) for the in- while A.P. Møller-Mærsk A/S traded at a total banks will be appointed “book runner” and as well as the number of maritime lawyers from as the first specialized marine arbitration center Out of Asia, Tokyo and Shanghai have dustry, primarily for the sale and purchase of ves- value of USD 26.5 bn on the stock exchange in sell the loan to other banks in the syndicated the broader maritime sector give an indication in the Middle East. maintained their positions in the top 5, with sels. These companies also include international Copenhagen. That is approximately the same loan market. In some markets national export of a city’s importance for financial and legal their focus being mainly on domestic clients. and investment banks, private equity firms as value as world-leading companies in other indus- credit banks also play a key role in the financing transactions. Strong knowledge centers with MARINE INSURANCE Singapore has dramatically improved and is now well as smaller boutiques, which act as arrangers tries such as Kraft Foods and Hyundai Motor. It process. Oslo is the most important center in the many experts also attract more business to a city. ranked 3rd in this indicator, possibly as a result or introducers of capital. Data on the number of is also observed that Oslo suffered a 30% drop world for this kind of financing. Both Nordea and Who’s Who Legal, which identifies the foremost Marine insurance was the earliest well-developed of its efforts to increase its marine insurance listed maritime companies, and volume of traded from its 2017 market value mainly because of DNB have their shipping headquarters located in legal practitioners in business law based upon kind of insurance, with origins in the Greek and activities by introducing its own Singapore War bonds, IPO and follow-ons from stock exchanges the decline in the offshore industry, for example Oslo, with regional offices in maritime cities like comprehensive and independent research, shows Roman maritime loan. Marine insurance in the Risk Mutual supported by its industry association headquartered in each city was also used as an among seismic service companies like PGS and London, New York, Singapore and Shanghai. that London, by far, has the largest number of modern world is a prerequisite for a functioning (Singapore Shipping Association, SSA). objective indicator. subsea construction, like Subsea 7. leading legal experts (81) in maritime law. Behind shipping market. Large shipping companies When considering the trading volume of However, in general, with traditional European London are Hamburg, Singapore, New York and transport cargo worth hundreds of millions bonds, IPO and follow-ons from each city’s stock banks gradually cutting back on ship financing Hong Kong with an average of 20 such legal of dollars every day on large ships that them- exchange during the period 2017 to 2019, New and with owners increasingly looking for experts. When considering the broader maritime selves might be as valuable as their cargo. To York is leading, followed by Hong Kong, Oslo alternative ways to finance their fleet renewal sector, statistics show that London remains the reduce risk involved in such operations, shipping

Fig. 5 - The five leading maritime financial and Fig. 6 - Market value and number of listed maritime companies on local stock exchange Fig. 7 - IPO/Bonds/Follow-ons during the period Fig. 8 - Shipping banks portfolio Fig. 9 - Number of leading maritime legal experts legal centers, according to industry experts 2017 to 2019 (green) and laywers (blue) practicing in the city Source: Clarkson and ORBIS/Bureu van Dijk and Bloomberg Source: Menon (2019) Source: Menon (2019) Source: Petrofin Bank Research Source: Who’s Who and World Ship Register

% of industry experts selecting each city bn USD bn USD bn USD 100 100 100 10 20 30 40 50 60 70 80 90 10 12 14 16 18 20 10 20 30 40 50 10 20 30 40 50 60 70 80 90 10 20 30 40 50 60 70 80 90 0 0 2 4 6 8 0 0 0

LONDON NEW YORK 90 NEW YORK BEIJING LONDON SINGAPORE HONG KONG SHANGHAI 35 TOKYO HAMBURG OSLO OSLO NEW YORK COPENHAGEN 8 SHANGHAI PARIS NEW YORK HONG KONG SINGAPORE HAMBURG LONDON 16 OSLO SINGAPORE DUBAI SHANGHAI 37 BUSAN ROTTERDAM HONG KONG TOKYO TOKYO LONDON ROTTERDAM BUSAN 27 MUMBAI SEOUL ATHENS ATHENS COPENHAGEN DUBAI SINGAPORE 25 NEW YORK SYDNEY COPENHAGEN TOKYO OSLO 52 COPENHAGEN GENOA ANTWERP SYDNEY MANILA HOUSTON DUBAI 2 LONDON DUBAI ATHENS Legal Maritime Experts BUSAN Maritime Lawyers OTHER CITIES HONG KONG 47 JAKARTA STOCKHOLM OSLO

26 27

8 “The maritime industry will see increased focus MARITIME TECHNOLOGY on digitalization and data analytics, with an intention to strengthen cybersecurity” SUMMARY

– INDUSTRY EXPERT FROM SINGAPORE 1 2 3 4 5

OSLO LONDON HAMBURG BUSAN TOKYO

RANKING enchmarking of cities, based on objective The Oslo region also hosts world leading equip- Bindicators, for their standing on maritime ment producers, like Kongsberg Maritime and OBJECTIVE INDICATORS SUBJECTIVE INDICATORS technology is challenging. Ideally, measures of smaller specialized tech-companies such as R&D, education and innovation should be used. Xeneta. However, it is hard to find global data sources London scores greatly from its prestigious at city-level that compare the magnitude, rele- maritime education institutions and for being vance and quality of maritime research, educa- the home of the oldest classification society tion and innovation. Such factors are more with a history from 1760, Lloyd’s Register. suited for subjective assessments by maritime Busan’s good ranking in this pillar is primarily experts. Some dimensions of maritime tech- due to its big fleet size (CGT) delivered by its nology that can be objectively measured have shipyards, the market value of the ships built nevertheless been identified and include size there, as well as leading in the number of patents of fleet (CGT) delivered by shipyards, share of produced by the maritime firms headquartered world fleet by classification societies, trend in there. Busan is the center for the South Korean the purchasing prices of ships built at active shipbuilding cluster where the major shipyards shipyards, the number of patents by maritime focus on offshore units and high value-added companies based in a city as well as the number “mega-ships” such as container ships, VLCCs of maritime education institutions found there. and LNG tankers. Oslo is ranked as the world leading city Tokyo, with the presence of classification when it comes to maritime technology – based body ClassNK, the size of its classified fleet on the objective criteria and experts’ assess- and its second position in terms of number of ment – followed by London, Hamburg and patents, places the city within the top 5 in this Busan. With London, Hamburg, Rotterdam pillar. ClassNK is the world’s second largest and Athens having now moved up in the mari- classification society and has large parts of time technology rank, this resulted in a down its research and development located in the shuffling of other cities such as Singapore and Tokyo area. Tokyo also has some yard activity Shanghai. located within the regional boundaries. On the One of the most important technology subjective criteria, industry experts rank Tokyo companies in the Norwegian cluster is DNV GL as the 8th most important city for maritime with its head office in Oslo. DNV GL is one of technology. the world’s leading maritime R&D companies, investing 5% of its revenues on new technology development, as well as the world’s largest ship classification society according to Lloyd’s List.

28 29 EXPERT ASSESSMENT easily connect to other local maritime clusters Hamburg and Busan as the places to go for in Norway. Hamburg has been the center for world-class specialized maritime equipment. The expert assessment for the maritime tech- R&D in the German maritime industry. Since Singapore’s top rank is due to the city being a nology pillar has been maintained from the 1965, the city has been home to the Center market place where buyers and sellers can meet, previous report; Oslo, Singapore, Hamburg, for Maritime Technologies, and its predecessor even without companies necessarily producing Copenhagen and Shanghai are the overall five Forschungszentrum des Deutschen Schiffbaus. ship equipment and technological products in leading cities under this pillar. Only a swap be- The center’s goal is to promote cooperation Singapore. Maritime business executives view tween Oslo and Singapore has occurred, which between various players in the industry and the Singapore as a place where all major marine now places Oslo first in the experts’ opinion for academic world, universities and government equipment players are operating and where a offering topnotch R&D institutions and for being agencies. high level of sophistication and competence exist home to a highly advanced maritime equip- London, Shanghai and Copenhagen follow locally to support high-value newbuilding of ment industry. When seeking experts’ opinion these top three cities in this ranking. London is offshore assets, conversion projects, fabrication on a new indicator related to cities which are particularly strong in maritime finance, for ex- of process modules or to perform complex repair at the forefront of environmentally sustainable ample with a specialized MSc in Shipping, Trade activities in Singapore efficiently with quick technologies and solutions for the oceans, Oslo & Finance at Cass Business School. Rotterdam, turnaround. Furthermore, the Maritime and Port is acknowledged to be the leading city, with a having several universities and research institu- Authority of Singapore (MPA) has put tremen- higher score than the combined value of the tions specialized in maritime, is placed in 7th dous focus on R&D and advanced maritime tech- three next in the rank – Singapore, Copenhagen position by the experts in this category. MARIN, nology as one of their core pillars in promoting and Rotterdam. Note that the equipment the Maritime Research Institute Netherlands, Singapore as a global maritime hub. The strategy ENVIRONMENTALLY SUSTAINABLE include Nor-Shipping; the Katapult Ocean – an Copenhagen, Hamburg and London. An inter- manufacturing is often located outside of the city is one of the leading institutes in the world for is backed by a significant funding through the TECHNOLOGIES & SOLUTIONS FOR THE impact investment fund and accelerator program esting observation is that Shanghai is regarded region, whereas technology development and hydrodynamic research and maritime technology. Maritime Innovation and Technology (MINT) OCEANS targeting sustainable solutions across ocean in- as being better than Rotterdam in being a city of engineering are to a large extent within. Netherlands’ Maritime University offers a MSc in Fund since 2003. The fund was extended and dustries; EntrepreneurShip One – a zero emission world-class maritime IT, with a perception by the Another key finding is that London has moved Shipping and Transport (both full and part time) topped up in 2013. Singapore also seeks close Considering the major environmental challenges pay-it-forward platform for the Nordic startup industry experts that it is well prepared to ride up in the overall subjective assessment and and has been set up in close cooperation with cooperation between publicly-funded institutions connected to the seaborne trade – and the huge community; Ocean Industry Forum Oslofjord; the digital transformation wave of the maritime pushed ahead of Rotterdam, Tokyo and Busan, the maritime business community. and private companies, as well as close collabora- opportunities for maritime companies to be Circular Norway; the environmental NGO industry. the latter two being strong on shipbuilding. This tions with other leading maritime research insti- part of the solution to these challenges – a new Bellona, as well as a broad range of key maritime In Singapore, MPA has been extremely is due to London’s recognition for being the tutions, such as the Research Council of Norway. MARITIME TECHNOLOGY & EQUIPMENT indicator was introduced this year on this topic; companies and cluster organisations proactive in promoting digital innovation and home of excellent educational and R&D centers, Chinese yards import around 50% of equip- experts were asked which cities are in the fore- entrepreneurship within the Singapore maritime as can be seen when considering the breakdown There is generally a demand for specialized ment installed in vessels, which illustrates that front of environmentally sustainable technologies DIGITAL SERVICES eco-system by launching the Pier71 to attract, of the experts’ assessment. equipment in the maritime industry to cater for the most advanced parts of the equipment and solutions for the oceans. On this indicator, build and accelerate start-ups, establishment improved efficiency under sea conditions as well industry are still found outside of China. At the Oslo stands out as the main center for ocean Last but not least, the industry experts were also of the Singapore Maritime Datahub to serve as as to address new operational limitations due to same time the technical capacity in the country KNOWLEDGE CENTERS – R&D AND EDU- technologies and solutions, with a higher score asked in which cities they would find companies collaborative platform for technology companies, recent environmental regulations. Environmental is increasing. According to the State Intellectual CATION than the combined value of the three next in the producing world-class maritime IT services and startups and maritime stakeholders to co-de- regulations create new niche markets for mari- Property Office, the number of patents relating rank – Singapore, Copenhagen and Rotterdam. IT-based products. This is an important aspect to velop innovative data-driven maritime solutions Maritime experts in this study identified time equipment, from ballast water treatment to shipbuilding grew by more than 70% from It is also interesting to observe that, except for capture the expert panel’s assessment on, since it and renewed its collaboration agreement with Singapore, Oslo and Hamburg as being the systems to marinized long-life batteries and new 2008 to 2013. Singapore, ocean technologies and solutions are is a strong indicator of how well a city is gearing the Research Council of Norway (RCN) to focus leading maritime knowledge centers. High labor designs of engines running on unconventional Norway and Germany both have a long dominated by European cities in the top 5 ranks. itself to provide upgraded digital infrastructure as on Maritime Digitalization and Autonomous costs have forced the Norwegian and German marine fuels or other solutions for compliance tradition of producing maritime equipment Oslo is forging its position in this aspect well as an environment that supports disruptive Vessels and Systems. maritime industry to seek technological advance- against the upcoming IMO regulations such as within a high cost environment. This has pushed through a strong and collaborative partnership innovation models to its maritime industry. A ment. Close links between educational centers, the sulphur cap. Norwegian and German maritime equipment with key players to focus on ocean technology location that offers such an environment condu- shipowners and manufacturers are critical When assessing cities which are strongest suppliers to develop and deliver innovative and and sustainability. It aims to be the world’s cive for innovation in the maritime industry will for being a strong maritime center for R&D. in supporting and nurturing the development advanced equipment with a high level of added leading capital and ecosystem for sustainability- generally have a strong competitive edge. The closely knit Norwegian maritime industry of maritime technology and equipment, the value. oriented ocean tech entrepreneurs. Key partners In this aspect, the maritime experts score gives Oslo an advantage; from Oslo one can expert panel point to Singapore, Oslo, Shanghai, in this movement for sustainable ocean business Singapore and Oslo score highest, followed by

Fig. 10 - Share of industry experts that mention the Fig. 11 - Share of industry experts that mention Fig. 12 - Share of industry experts that mention Fig. 13 - Size of fleet (CGT) delivered by active Fig. 14 - Size of fleet by classification societies Fig. 15 - Market value of listed shipyards and city as “producing world class digital services and the city as “leading maritime R&D & educational the city as “in the forefront of environmentally shipyards as of current fleet and orderbook. headquarter (million CGT). technical service providers (by year-end 2018). maritime IT-products” centers of the world” sustainable technologies and solutions for the By city headquarter (value in bn USD) oceans” Source: Clarksons/Menon (2019) Source: Clarksons/Menon (2019) Source: Clarkson & ORBIS Source: Menon (2019) Source: Menon (2019) Source: Menon (2019) % of industry experts selecting each city % of industry experts selecting each city % of industry experts selecting each city million CGT million CGT bn USD 10 12 100 120 140 160 180 200 100 125 150 20 40 60 80 25 50 75 0 2 4 6 8 100 100 100 0 0 10 20 30 40 50 60 70 80 90 10 20 30 40 50 60 70 80 90 10 20 30 40 50 60 70 80 90 0 0 0

SINGAPORE SINGAPORE OSLO BUSAN OSLO BUSAN OSLO OSLO SINGAPORE SHANGHAI TOKYO DALIAN COPENHAGEN HAMBURG COPENHAGEN HAMBURG LONDON ROTTERDAM INSTANBUL HOUSTON SHANGHAI LONDON SHANGHAI HAMBURG DALIAN LONDON SHANGHAI COPENHAGEN LONDON IMABARI GUANGZHOU PARIS ROTTERDAM ROTTERDAM TOKYO SINGAPORE TOKYO TOKYO ANTWERP SINGAPORE BEIJING

HONG KONG BUSAN BERGEN ROTTERDAM BUSAN GUANGZHU ATHENS ATHENS HONG KONG QINGDAO GENOA HOUSTON NEW YORK SHANGHAI QINGDAO BUSAN HONG KONG NEW YORK KOBE JAKARTA HO CHI MINH NEW YORK ANTWERP BUSAN NINGBO ST. PETERSBURG ANTWERP HOUSTON TRONDHEIM NINGBO TIANJIN HAMBURG DUBAI DUBAI DUBAI KOBE OTHER CITIES OTHER CITIES ATHENS ISTANBUL MUMBAI

30 31 OBJECTIVE INDICATORS’ ASSESS- and LNG tankers. The yards in this region are international presence as this has become a pre- followed closely by Tokyo. Daewoo Shipbuilding MENT also highly influenced by a mix of overcapacity in requisite for serving the global industry. Many of & Marine Engineering Co. Ltd. holds almost the market and the slow-down in newbuilding the class societies have broadened their market 80% of the patents in Busan, classified under SHIPBUILDING orders for the offshore oil and gas industry. focus during the last years. the “building of ships and floating structures” China is the world’s second largest ship manu- When ranking the classification societies in maritime segment (as per the NACE code). The At shipyards the demands from design and facturer in CGT (through its yards in Shanghai, terms of the size of their classified fleet, DNV GL, remaining 20% of patents in Busan are split over industry standards are put into action. Modern Dalian and Guangzhou) and but is not yet as formed through the merger between Norway’s more than 100 companies, all under the NACE ships are a mosaic of parts from numerous technologically advanced as the South Korean DNV and Germany’s Germanischer Lloyd and code 3315 which is for “repair and maintenance subcontractors that become high-tech indus- shipyards. The main vessel types leaving the with its headquarters based in Oslo, takes the of ships and boats”. trial assets for their owners. Assembling ships Chinese yards have been bulkers, fishing vessels, first place and thus pushes Oslo ahead in the city In Tokyo, the “building of ships and floating is a technologically and logistically demanding tugs, general cargo ships and products tankers. ranking. Tokyo with ClassNK takes the second structures” segment accounts for 93% of its operation. Some shipyards build the entire ship in Japan, with its large domestic market, comes position, followed by Houston which does well total patents and held entirely by Mitsui E&S one location. For more technologically advanced third with the main contribution from yards in on this objective indicator much due to the Holdings Co. Ltd. Remaining 7% patents are ships, it is common for hull construction to occur Imabari, primarily serving the fishing, general presence of American Bureau of Shipping (ABS). mostly held by Nippon Yusen Kabushiki Kaisha in low cost countries before outfitting is done cargo and bulk carrier segments. Houston is also one of the leading centers of the for the NACE segment “sea and coastal freight in countries with more highly skilled and costly Italy, Germany, the Netherlands, France and world for offshore oil and gas activities, regarded water transport”. labor. Shipyards are often surrounded by mari- Norway are the leading shipbuilders in Europe. by many as the world’s leading center for oilfield In Europe, maritime cities such as Hamburg, time equipment companies that supply them. Italian shipyards are known for their yachts, equipment. Lloyd’s Register, the oldest classifica- London, Paris, Oslo and Rotterdam have only a These companies are therefore considered vital fishing vessels and passenger cruise ships, while tion society with a history from 1760, headquar- small fraction of what Busan and Tokyo demon- for the completeness of a maritime cluster. German yards have primarily focused on con- tered in London places this city the fourth place, strate in this field. One indication of the sophistication and tainerships, cruise and general cargo ships. The as shown in Figure 14 In the fifth place is Paris leading technical competence in Europe can Netherlands also has a history in building chem- with Bureau Veritas. Beijing appears in the sixth MARITIME EDUCATION INSTITUTIONS be seen when comparing the size and value of ical inland waterway vessels, fishing vessels and position with China Classification Society. European yards’ orderbook. Measured in size, general cargo ships. The Norwegian shipbuilding The number of maritime education institutions European yards have less than 1% of the world industry has for many years been specialized on found in a city is a strong message from the orderbook (CGT), whereas when measured in highly advanced offshore vessels, but after the Strategic focus on innovation and city on the importance it puts on the need for a value, European yards hold 4% of the world offshore crisis in 2015, has restructured toward development, with support frame- culture of learning to improve and replenish the orderbook. This is due to the European yards’ fishing vessels, ferries, specialized cruise ships work for SME’s & individuals to foster workforce for the maritime industry. Maritime focus on high-end markets such as cruise, com- and other high value segments. companies in such a city benefit from the ease of innovation. The path should be clear plex offshore assets and navy. Singapore would finding a skilled maritime workforce. Thus, when and well communicated. Create a also score high on this measure as the city-state CLASSIFICATION SOCIETIES considering the number of maritime education focuses on high value rigs and conversion/modifi- structure within the government to institutions found in each maritime city, London cations of offshore structures. A classification society is a non-governmental help companies that are trying to is the leading city and home to some prestigious When considering only the currently active organisation that establishes and maintains the build or create something innovative maritime academies such as Cass Business School shipyards and for the 50 cities for which the technical standards for ships and offshore struc- in terms of providing opportunities for and London Shipping Law Centre. Rotterdam overall benchmarking is being done, a ranking tures. All class societies have a strong focus on partnerships and pilots. follows closely behind, where its maritime- based on both delivered CGT and current R&D. Most of the members of IACS (International focused educational institutions have a global orderbook from these yards show that Busan is Association of Classification Societies) are foun- – Industry Expert from Dubai reputation for excellence. Athens and Hamburg by far the leading city in this field. The region dations with a focus on supporting the industry are in a tie, in the 3rd position, whilst Manila and surrounding Busan is the center for the South and safety at sea. The societies are important Singapore hold the 4th position. Manila is a well- Korean shipbuilding cluster and offers deep wa- technological R&D centers as they certify tech- known training ground for seafarers, whereas in ters free from sand-banks. The major shipyards nological changes in constructions. Classification Singapore, the Bachelor and Master in Maritime focus on offshore units and high value-added societies play a vital role in quality assurance in MARKET VALUE OF SHIPS BUILT AT SHIP- Studies degree programs offered by NTU has “mega-ships” such as container ships, VLCCs the maritime industry. Most societies have an YARDS been a significant source of maritime talent pipeline for more than a decade. Another parameter to understand the value- add of a yard to a maritime city is to factor in the market value of the ships built at the city’s Fig. 16 - Number of patents developed by maritime Fig. 17 - Number of maritime Education Institutions yard(s). Thus, when considering the recent pur- firms per city per city chasing price of ships built at different shipyards Source: World Shipping Register Source: ORBIS/Bureu van Dijk from 2017 to 2019 (as shown in Figure 15), 10 000 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000 Busan has sold ships from its shipyards at a price 10 15 20 25 30 0 0 5 of USD 11.8 bn during this period whilst Dalian, BUSAN LONDON Shanghai and Imabari have averaged at a price of ROTTERDAM USD 1.9 bn or 6 times less the price from Busan TOKYO HAMBURG yards.

CHICAGO ATHENS SINGAPORE PATENTS BY MARITIME COMPANIES HAMBURG MANILA Another means to measure how well a city’s poli- LONDON ANTWERP cies support R&D and innovation for its maritime GLASGOW PARIS industry is by considering the number of patents MUMBAI produced by maritime firms which are headquar- OSLO OSLO tered in that city. The patents analyzed for this HELSINKI SEOUL indicator have been accumulated over several ABERDEEN years and are a good measure of the technolog- ROTTERDAM COPENHAGEN ical sophistication and innovation within a com- SHANGHAI HELSINKI pany and thus an industry. From Figure 16, Busan VALLETTA had the highest number of patents in 2018,

32 33 “Higher availability of efficient and PORTS AND LOGISTICS SERVICES effective SMART infrastructures is the future of the maritime industry” SUMMARY INDUSTRY EXPERT FROM DUBAI 1 2 3 4 5

SINGAPORE ROTTERDAM HONG KONG SHANGHAI HAMBURG

RANKING ingapore is a top performer for port services Hong Kong is in the overall 3rd position in Sand logistics, securing the first position on leading port cities, behind Rotterdam. Its ranking OBJECTIVE INDICATORS SUBJECTIVE INDICATORS both objective criteria and experts’ assessment. based on objective criteria is stronger than its Singapore is home to the world’s third largest port assessment by the industry experts who placed it in terms of container and cargo volume handled. in the 5th position. Hong Kong is an important PSA International, one of the leading global transshipment port and is home to the largest port groups, is headquartered in Singapore and port operator in the world, with Hutchison participates in 17 countries across Asia, Europe Port Holdings. The efficiency and quality of its and the Americas with flagship operations in port is well recognized, placing it behind closely PSA Singapore Terminals and PSA Antwerp. Rotterdam and Singapore on the Quality of Port Rotterdam comes in the 2nd position of leading Infrastructure index. port cities, followed by Hong Kong, Shanghai Shanghai and Hamburg are also in the top 5 and Hamburg. Whilst the world’s largest ports leading port cities. Shanghai is robustly ranked in terms of container volume handled are in the 4th position by both industry experts and found in Asia at Guangzhou and Shanghai, one on the objective indicators scale. Even though of Rotterdam’s main strengths is in its cargo Shanghai is ahead of Singapore in terms of volume handling capacity for which it is ahead container and cargo volume handled, and is the of Guangzhou. Rotterdam is home to the largest 2nd largest port operator behind Hong Kong, port in Europe and is the 3rd largest port operator its main downfall is in its low ranking as per the in the world. Its diverse port with well-established World Bank’ Quality of Port Infrastructure index links to the European continent is emphasized by which pushes it far behind leading port cities such the experts and is also one of the world’s most as Rotterdam, Singapore, Hong Kong and Dubai. advanced. Rotterdam is ranked 1st on the World Hamburg is a strong shipping center and is the Bank’s Quality of Port Infrastructure index since most important access point to the large German its port infrastructure is considered as the most market. The efficiency and quality of its port is efficient by international standards. The port has high, but its main boost in the top 5 ranking is for many years focused its attention on increasing from the subjective view of the industry experts. automation and Rotterdam Massvlakte II Dubai is maintaining its importance in port terminal is now fully automated. The port has services and logistics. The city is an important also recently announced the development of a logistics hub both for aviation as well as the field lab with its own 3D metal printer. Rotterdam maritime industry. The city has strong backing is thereby in the forefront when it comes to from the government to become the preferred leveraging important new technology that will maritime city in the Middle East and is ranked complement its core port activities. 6th overall.

34 35 EXPERT ASSESSMENT in this subjective rank behind Singapore and Singapore, one of the world’s busiest ports, is Singapore and Hong Kong are more important Rotterdam, maintaining their position since 2015. on top. Rotterdam and Hamburg are also the as transshipment ports. If all Chinese ports were For the last 4 years, the experts’ assessment Hamburg is by far the most important German largest ports in the European economy, and considered (some of which are not within the 50 on the world’s leading centers for ports and port and together with the port in Bremen, the much of Europe’s external trade is organized by top cities ranked across the 5 pillars in this study), logistics services has remain unchanged towards biggest port area in Europe. Eurogate, with its companies located in these cities. We see a clear the importance of China as a center for world Singapore and Rotterdam. Singapore has the head office in Bremen – one hour away from trend with 5-6 leading global port cities followed trade would be even clearer. Seven of the world’s benefit of proximity to the Asian market, and Hamburg – is Europe’s leading container terminal by the remaining cities with a more domestic or ten top container ports are found in China. with the ease of doing business in Singapore, ex- logistics group. Its strong regional maritime regional importance. The largest port in container handling after cellent connectivity and long history as a trading cluster positions Hamburg as a leading maritime Asia is found in the United Arab Emirates (UAE). hub, combined with the city’s highly efficient city of the world. Dubai and the surrounding region are not a port, make our experts place Singapore first in In recent years, Hong Kong’s position as a manufacturing hub like some of its Asian coun- the ranking. gateway to the world’s manufacturing sector “The upcoming years in the industry terparts. Instead, Dubai plays a role as a transit has been challenged by the phenomenal growth will see higher degree of innovation hub strategically located in the middle of Europe of nearby Shenzhen and Guangzhou, as well as in port facilities, increased information and Asia. The city is still making large infrastruc- London is losing its critical mass. Still Shanghai, leading to a reduction in Hong Kong’s transparency for the final user and ture investments to cement its status as one of very strong in some areas, but now market share. reinvention of container functions” the leading transport hubs of the world. Los noticeably smaller and less effective Dubai is also ranked high by the experts. Dubai Angeles, Hamburg and Rotterdam are also major than European shipping centers for is a regional maritime center that focuses on – Industry Expert from Kuala Lumpur ports from the West with high TEU handling. increasing its presence in the industry. Currently When considering volume of cargo handled ship management and ship operations Dubai’s port, its status as an important logistics in million tons, a similar picture is obtained, with port groups. PSA participates in over 50 coastal, from 1 (port infrastructure considered extremely than Hamburg, Athens and Limassol. hub and, to a certain degree, its pro-business en- Asian ports securing the top positions. For the rail and inland terminals in 17 countries across underdeveloped) to 7 (port infrastructure consid- And it is now much less influential vironment are its strengths as a city for maritime OBJECTIVE INDICATORS’ ASSESS- Western cities, it is Rotterdam, New Orleans Asia, Europe and the Americas with flagship ered efficient by international standards). in ship management or ship opera- business activities. MENT and Houston that make it into the top 15 cities operations in PSA Singapore Terminals and PSA When considering the maritime cities from tions than Singapore, Hong Kong or ranked in this aspect, with a total cargo tonnage Antwerp. Several port operators, headquartered this study, Rotterdam is ranked highest with a Shanghai. SPECIALIZED LOGISTICAL SERVICES PORT VOLUME matching Shanghai and Guangzhou combined. in Shanghai, have a combined container handling port quality index of 6.8, followed closely by volume of 85 million TEU. Singapore and Hong Kong. Dubai, Helsinki and – Industry Expert from London The increasing size of modern cargo ships and Port cities are at the frontline of globaliza- PORT OPERATORS Following Dubai, there is a large jump in TEU Panama City are in the 4th position with an index increasing world trade puts pressure on ports to tion, with approximately 90% of external trade handled down to the next cities. This highlights of 6.2. Since this index is evaluated at a country become larger and more automated. All around volume transported by ship and loaded and un- To strengthen their position in a competitive how the port business is dominated by a few level, all the maritime cities in the USA from this the world, ports are constantly upgraded and loaded at world ports. In a study by the OECD, it world, the largest and best port operators global operators that control large parts of study averaged at an index value of 5.8. Rotterdam is seen as the second most modernized to lower the cost of transportation was concluded that well-run ports produce many branch out to operate new ports and terminals. among the most valuable of all the listed ship- important center for port and logistics services. and be more competitive. The shipping industry’s economic benefits such as lowering the cost of The ranking in Figure 19 shows the leading cities ping companies. Rotterdam is the largest port in Europe and has ability to deliver reliable logistics services at a trade, increasing value creation, job creation and which are home to the biggest port operators the capability to handle the largest container low cost is a prerequisite for the modern world attracting related maritime services. To get the based on the total container volume handled at QUALITY OF PORT INFRASTRUCTURE vessels. From the city, goods are transported economy. Many companies rely on supply chains best economic benefit from port operations, port a global level. No significant changes have hap- either by smaller ships or trucks or by the railway that stretch over vast distances, even continents. cities must facilitate an increase in the maritime pened since the 2017 report, with Hong Kong A new indicator for the Ports and Logistics system that is closely linked to the rest of Europe. It is important for cities that companies can use services offering and take advantage of possible still in the leading position due to Hutchison Port Services pillar in this 2019 analysis has been Rotterdam has several advantages including them as hubs for carrying out complex, highly spill-over effects for industrial development. Holdings and followed by a slightly reshuffled to consider the quality of cities’ port index, as great connectivity, a business-friendly maritime specialized logistical services. The world’s largest ports in terms of container ranking for Shanghai, Rotterdam, Singapore provided by the World Bank. The Quality of Port environment, stable political environment, The industry experts point to Singapore and volume (TEU) handled are found in Asia at and Dubai. Considering the already close race in Infrastructure measures business executives’ favorable tax legislation and proximity to major Rotterdam, followed by Hamburg and Shanghai, Guangzhou, Shanghai, and Singapore. While the the 2017 report, Shanghai and Singapore have perception of their country’s port facilities. Data ports. as the leading cities for offering the best port- port in Shanghai plays a key role in supporting now jumped ahead of Dubai. Singapore is home is sourced from the World Economic Forum’s Hamburg, Shanghai and Hong Kong are next related logistics services. It is not surprising that the manufacturing industry in the larger region, to PSA International, one of the leading global Executive Opinion Survey, where scores range

Fig. 16 - Percentage of industry experts that Fig. 17 - Container volume handled in city port Fig. 18 - Volume of total cargo handled in ports in Fig. 19 - The largest port operators in the world by Fig. 20 - Quality ranking of port infrastructure consider the city home to leading ports and (million TEU) the city region (million tons) headquarters (million TEU) on country level. Ex. Scale range: 1 - port logistics services Source: Lloyd’s (2017) Source: The American Association of Port Authorities (2016) Source: Drewry (2018) infrastructure considered extremely Source: Menon (2017) underdeveloped to 7 - port infrastructure million tons million TEU % of industry experts selecting each city million TEU considered efficient by international standards 100 100 200 300 400 500 600 700 800 100 120 10 15 20 25 30 35 40 45 50 10 20 30 40 50 60 70 80 90 20 40 60 80 0 5 0 0 0 ROTTERDAM 6.8 SINGAPORE GUANGZHOU BUSAN HONG KONG SINGAPORE 6,7 ROTTERDAM SHANGHAI SHANGHAI SHANGHAI HONG KONG HAMBURG SINGAPORE SINGAPORE 6.5 ROTTERDAM DUBAI SHANGHAI BUSAN ROTTERDAM 6.2 HONG KONG SINGAPORE HONG KONG GUANGZHOU PANAMA CITY 6.2 ANTWERP DUBAI QINGDAO NINGBO HELSINKI 6.2 DUBAI TOKYO DUBAI HONG KONG ANTWERP 6.1 HOUSTON LOS ANGELES QINGDAO SEOUL SEATTLE BUSAN 5.8 TIANJIN BEIJING TOKYO MARSEILLE NEW ORLEANS 5.8 HAMBURG NEW ORLEANS OSLO HAMBURG HOUSTON 5.8 ROTTERDAM COPENHAGEN DALIAN SEATTLE LOS ANGELES 5.8 LONDON ANTWERP SEOUL PARIS NEW YORK 5.8 NEW YORK DALIAN TOKYO ISTANBUL MIAMI ATHENS HO CHI MINH KUALA LUMPUR 5.8 OTHER CITIES TOKYO HOUSTON WASHINGTON D.C. 5.8

36 37 ATTRACTIVENESS AND COMPETITIVENESS

SUMMARY 1 2 3 4 5

SINGAPORE COPENHAGEN LONDON ROTTERDAM HAMBURG

RANKING he final pillar in our ranking, the attractive- assessment, being in the upper echelons for its Tness and competitiveness of the cities, points attractiveness for the relocation of headquarters, OBJECTIVE INDICATORS SUBJECTIVE INDICATORS to the future. The more attractive a city is, the operations and R&D functions of companies, stronger its growth can be expected in the future. for having a complete maritime cluster and for Cities must be regarded attractive by its incum- acting as an innovative and entrepreneurial bent companies for the city to retain them, and center for maritime activities. On the other hand, by external companies to attract them. Cities are Copenhagen’s main strength lies in its top scores complex economies with a range of factors that for several of the objective indicators, including impact the decision-making process of a busi- ease of doing business and for being the most ness to stay in an existing location or to move to a transparent and uncorrupted city in the world. new one. Hence, industry experts’ judgement and Even on the subjective side, when industry experts objective indicators related to cities’ ease of doing are asked to rank their choice of the top three cities business, health of entrepreneurship ecosystem, acting as the most innovative and entrepreneurial competitiveness of maritime companies as center for maritime activities Copenhagen is in shaped by cities’ cluster dynamics, cities’ attrac- the 4th position whilst London is 8th. tiveness for relocating headquarters, operations Rotterdam, Hamburg and Oslo are next in the and R&D, were used to benchmark the maritime ranking for this pillar. Rotterdam has signifi- cities in this study. cantly improved its score for the attractiveness Overall, Singapore remains the most attrac- and competitiveness pillar compared to 2017 tive and competitive maritime city in the world, where it held the 8th rank, improving on both measured by objective indicators and experts’ subjective and objective indicators. Rotterdam assessments. Singapore is unsurpassed in most scores the highest in the Global Entrepreneurship of the benchmarking criteria used in this pillar, Index which is used to evaluate the health of the except for three of the objective indicators where city’s entrepreneurship ecosystem. When looking Copenhagen (on Corruption Perception Index), at the Middle East, Dubai is a rising star amongst Rotterdam (on Global Entrepreneurship Index) other traditional maritime capitals of the world. and Helsinki (on Burden of Customs Procedure Although Dubai is showing an overall reduction Index) each take the first position compared to in the combined ranking in terms of attractive- Singapore. ness and competitiveness, the city scores well in London and Copenhagen are in a tie behind the Burden of Customs Procedure Index and is Singapore for this pillar, both having improved also selected by the industry experts in the top from their 2017 rank. Compared to Copenhagen, four most attractive location to set up their opera- London is relatively stronger in its subjective tional offices.

38 39 for cities to attract and retain business. Both with a value of 39 which is below the global EXPERT ASSESSMENT ATTRACTING COMPANIES FOR RELOCA- between Hong Kong and Busan in this area. maritime specific regulations and the overall average score of 43. TION INNOVATION AND ENTREPRENEURSHIP regulatory framework for conducting business Any company will seek to be present in a loca- CLUSTER DYNAMICS – OPENNESS AND Last but not least, when the industry experts are is important in this aspect. While it is difficult tion which will cater for its business needs, When the industry experts are asked to choose INFORMATION SHARING ENTREPRENEURSHIP provide the necessary environment for it to grow and rank the top three most attractive mari- asked to choose and rank the top three cities to measure maritime specific regulations on a in a cost-efficient manner, and support as far as time cities for the headquarter, operations and In the long term, the competitiveness of mari- acting as the most innovative and entrepre- global scale, the Ease of Doing Business Index Entrepreneurship is one of the key drivers of possible the desired work benefits and lifestyle of R&D functions should their company consider time companies in cities is shaped by the cluster neurial center for maritime activities, Singapore is developed by the World Bank gives an insight economic growth and development and is used its employees and new recruits. The industry ex- relocating, Singapore is consistently the highest dynamics, that is, by relationships between the still in the lead, followed by Oslo, Shanghai and into the wider set of regulatory environments. A to assess a city’s relative attractiveness and perts in this study were thus asked to rank their preferred location for all three functions. Next in different players. Openness and information- Copenhagen. Hamburg and Rotterdam follow higher ranking indicates better, usually simpler, competitiveness. The Global Entrepreneurship choice of the top three most attractive maritime line are Hamburg, Oslo, Hong Kong and London. sharing are particularly important, both for closely behind Copenhagen. regulations for businesses and stronger protec- Index was selected to evaluate the health of the cities for each of the following: It should however be noted that experts in this reducing transaction costs and even more impor- tions of property rights. Empirical research entrepreneurship ecosystem in each location • Most attractive cities for maritime com- study have highlighted high cost of living as tant for knowledge-flow and innovation. CITIES PREPARED FOR THE DIGITAL indicates that the impact on economic growth of which was further complemented by the results panies’ relocation (HQ, operations and R&D the greatest challenge faced in Singapore and The industry experts were asked to rank their TRANSFORMATION OF THE MARITIME improving these regulations is strong. from the experts’ assessment. functions) London. choice of the top three cities which have the INDUSTRY Looking at the maritime cities studied, small Rotterdam scores the highest in this category. • Cities with most complete maritime cluster For headquarters’ relocation alone, London most complete maritime cluster, including access city states perform very well on the index, with Rotterdam is well known worldwide for being (access to all relevant maritime services – one- and Hong Kong are the preferred choices after to all relevant maritime services (one-stop-shop As mentioned in the introductory sections of Singapore and Hong Kong among top three a hotspot for innovation in the port. Businesses stop-shop city with equipment, yards, finan- Singapore according to the maritime business city with equipment, yards, financial, legal and this report, there is a critical need for a radical performers. There are relatively small differences that set up at RDM’s Innovation Dock become cial, legal and technological services – in addi- executives. For this subjective indicator, only technological services), in addition to an inter- improvement of the digital infrastructure that among the top 15 cities. Dubai is comparable to part of an enterprising network of start-ups and tion to an international shipping community) 3 Asian cities make it in the top 10, including national shipping community. Singapore comes would cater for cyber security, disruptive innova- Stockholm and Gothenburg on this aspect and is R&D branches of established multinationals. • Cities with the most innovative and entre- Shanghai whilst 5 cities are in Europe. Dubai and out strongly with 31% of all the votes, followed tion and the general digital transformation which ahead of Hamburg, Rotterdam and Tokyo. Whilst Not far behind Rotterdam are London, preneurial center for maritime activities New York are also within the top 10 for head- by Oslo and Hamburg which jointly share 25% the maritime industry is facing, based on a col- China’s maritime cities such as Beijing, Shanghai Singapore and the US-based maritime cities. The quarters relocation. of the votes. From a geographical perspective, laborative environment between maritime com- and Guangzhou are not in the top 15 in this cat- United States as a country ranked as the most The overall expert assessment, based on the For the operational functions of their compa- and for the top 15 cities which have been rec- panies, technology companies and regulators. egory, they show positive progress compared to attractive location for the entrepreneurship, above subjective queries, points to a ranking for nies, the top 10 list of preferred cities is some- ognized and chosen for their cluster dynamics, The expert panel was thus asked which cities the previous ranking and are ahead of Limassol scoring particularly strong in high growth and the most attractive and competitive maritime what similar to the headquarters’ list, except for 50% of the votes are for Asian cities (Singapore, have the strongest capabilities and are best and Athens. internationalization. Whilst the other Asian mari- cities with Singapore in the lead, followed by New York which is replaced by Athens. In this Shanghai, Hong Kong, Tokyo and Busan) whilst positioned for the digital transformation of time cities such as Busan, Tokyo and Shanghai Oslo, Hamburg, Shanghai and London. The top aspect the Asian cities – Singapore, Hong Kong 46% of the votes are for European cities. Dubai the maritime industry. Singapore is the most TRANSPARENCY / CORRUPTION are not within the top 15, they have a general 10 cities from a subjective point of view also and Shanghai – have a better ranking. Dubai, is acknowledged for its maritime cluster and heavily ranked in this aspect. Oslo comes next, high score in this category and are ahead of include Hong Kong, Rotterdam and Dubai, and Hamburg and Rotterdam also are regarded as is ranked in the 8th position by the industry for its perceived strength in handling the digital The Corruption Perception Index by Transparency Vancouver, Oslo and Bergen. has remained unchanged in the cities’ position better locations for the operational part of the experts, with 3% of their votes. transformation for its maritime industry. These International was used to rank the maritime compared to the previous report. Singapore companies, compared to their headquarters’ During the expert assessment, it was observed two cities seem to stand out from the rest. It is cities for their transparency and corruption level. BURDEN OF CUSTOMS PROCEDURE stands out as the most attractive city for the position. London, although still in the top 10, that Europeans in general seem to have higher interesting to observe that whilst Copenhagen is The index ranks 180 countries and territories by relocation of headquarters, operations and has the biggest downward move from the 2nd trust and share more information in their busi- not in the overall top 10 leading maritime cities, their perceived levels of public sector corruption The Burden of Customs Procedure Index pro- R&D functions of companies, having the most position for headquarters to 9th position for the ness relationships than maritime companies in there is a strong belief by the industry experts according to experts and business organization duced by World Bank was selected to assess complete maritime cluster and acting as the most operational functions. The maritime business ex- other regions do; 95 percent of the experts from that Copenhagen is in the 3rd position when it where a scale of 0 to 100 is used, with 0 is highly the effectiveness of customs procedures for the innovative and entrepreneurial center for mari- ecutives in this study also highlighted the uncer- Europe (including Scandinavia) partly or fully comes to having strong capabilities for the digital corrupt and 100 is very clean. In 2018, more maritime cities, where a scale of 1 (extremely time activities. On all these three factors, Oslo tainties related to Brexit could impact London’s agree that relationships amongst companies in transformation. than two-thirds of countries scored below 50, inefficient) to 7 (extremely efficient) was used. is the second choice after Singapore. Hamburg position as a business center in the future. the maritime cluster in their own city are char- with an average score of 43, which indicates that Singapore and Hong Kong are strong in this most countries fail to address corruption in their dimension; this ranking goes hand in hand with Fig. 29 - The experts’ assessments of the policy could have secured the 3rd overall position but Finally, for the R&D function, Asian cities prove acterized by openness and information sharing. OBJECTIVE INDICATORS’ ASSESS- framework in their own city. (Cities ranked by the the industry experts had a stronger vote for to be strong according to the industry experts In the Middle East the share is 84 percent whilst MENT public system. observations made from the Ease of Doing average score on the two indicators.) Copenhagen than Hamburg on the aspect of with 4 cities joining the ranks of the top 10, in the Americas, only 73 percent of the experts For the maritime cities in this study, the Business Index. Dubai is also ranked 4th in terms Source: Menon (2017) Scandinavian cities and Singapore remain strong of the effectiveness of its customs procedures, Policy framework - overall assessment of taxes, subsidies and regulations being an innovative and entrepreneurial center including Busan. With Singapore leading in this partly or fully agree that the relationships among EASE OF DOING BUSINESS (1=Highly unattractive; 4= Highly attractive) in this category. Dubai has an index value of 70 higher than Rotterdam, London and Oslo. The government and governmental bodies are supportive of the maritime for maritime activities. subjective indicator, Oslo and Hamburg follow the companies in the maritime cluster in their industry ( 1=Disagree; 4= Agree) closely behind. Copenhagen and Shanghai are own city are characterized by openness and The maritime industry is international in nature, which is better than Busan and Athens. China’s in a tie whilst industry experts place Dubai in information sharing. and that makes competitive regulation important maritime cities come out poorly in this indicator,

Fig. 21 - Expert opinion regarding the most at- Fig. 22 - Share of maritime experts who agree that Fig. 23 - Number of industry experts selecting the Fig. 24 - Number of industry experts selecting the Fig. 25 - The perceived level of public sector corrup- tractive cities for relocating maritime companies. the relationships among the companies in the cities as one of three most innovative and entrepre- cities as one of three with strongest capabilities tion of the top 15 maritime cities Number of experts that rank the cities among the maritime cluster in their own city are characterized neurial for maritime activities and best positioned for the digital transformation three most attractive for different functions (HQ, by openness and information sharing Source: Menon (2019) of the maritime industry” Source: Transparency International (2018) Operations and R&D.) Source: Menon (2019) % of industry experts selecting each city Source: Menon (2019) % of industry experts selecting each city CPI (Corruption Perception Index) 100 100 100 100 10 20 30 40 50 60 70 80 90 10 20 30 40 50 60 70 80 90 10 20 30 40 50 60 70 80 90 10 20 30 40 50 60 70 80 90 0 0 0 Source: Menon (2019) 0 100 120 140 160 180 200 220 240 260 280 300 320 340 20 40 60 80 0 SINGAPORE SINGAPORE COPENHAGEN SINGAPORE Americas 33% 40% OSLO OSLO SINGAPORE HAMBURG COPENHAGEN COPENHAGEN OSLO OSLO SHANGHAI SHANGHAI ROTTERDAM Europe 47% 47% HONG KONG HAMBURG LONDON LONDON LONDON ROTTERDAM HAMBURG HAMBURG SHANGHAI Middle East, HONG KONG ROTTERDAM HONG KONG 26% 52% India and Africa DUBAI LONDON DUBAI ANTWERP COPENHAGEN DUBAI HONG KONG TOKYO ROTTERDAM North Asia 50% 38% ATHENS HOUSTON HOUSTON ATHENS NEW YORK TOKYO NEW YORK NEW YORK TOKYO NEW YORK DUBAI Scandinavia 71% 21% HOUSTON BERGEN ATHENS BUSAN ALESUND ANTWERP ATHENS TOKYO HQ Agree HOUSTON BERGEN SHANGHAI LIMASSOL Operations South East 53% 31% Partly Agree R&D Asia OTHER CITIES OTHER CITIES ANTWERP

40 41 THE LEADING MARITIME CITIES OF THE FUTURE s part of this study, the experts were asked to make predic- WHAT CAN THE ORDER BOOKS TELL ABOUT Ations about the leading maritime capitals of the world in five FUTURE GROWTH? years ahead (2024). Figure 26 shows which cities the expert panel The orderbooks of shipping companies give an objective glance predict will be important in five years from now. The results are into the near future of maritime capitals. Figure 28 depicts the consistent with the previous report; this shows that the experts’ orderbook of shipowners located in different cities. It is domi- past predictions have already been partly realized, and this is nated by a mix of well-known Asian and European shipowning paving the way for the new predictions. hubs. Owners based in Tokyo and Imabari come first, followed There seems to be a clear consensus among the experts that by Greek owners in Athens. London- and Hamburg-based ship- Singapore will remain the most important city in 2024, while owners also place these cities in the top 10 for the size of the order- Shanghai is expected to become the second most important book for contract dates covering the period of 2018 to February maritime city. Shanghai’s increased importance is related to the 2019. Earlier in the report we saw that Oslo has weakened its posi- growing influence of the Chinese economy. China has the world’s tion as a shipping city. Looking at the orderbooks, without Oslo second largest economy and its export-oriented business environ- on the top 15 list, there is little reason to believe that Oslo will ment is dependent on the trade of goods. China is expected to regain its position. bypass the US as the world’s largest economy around 2025. The fact that Singapore and Shanghai are expected to become the most important centers for the industry, tells something about the changing center of gravity in both the world economy and the maritime industry. Manila and Jakarta are two other cities in the region that are growing in importance. Whilst the third most important leading city can be attributed to Oslo, the experts seem to be divided in their opinion when it comes to selecting a city for the fourth position since the next six cities have been ranked almost equally in this place. London, Hamburg, Hong Kong, Athens, Rotterdam and Dubai are all potential contenders for the fourth position in this predictive ranking in the next five years. Dubai is in the league of these other “traditionally” well-established maritime cities, because the maritime industry experts recognize that the city is developing quickly due to the strong backing from the local government to increase Dubai’s presence in the global economy. Dubai is today an important trading center and is becoming the preferred city for maritime activities within its wider region covering Middle East, India sub-continent and Africa.

Fig. 26 - Industry experts answer to: “Looking Fig. 27 - Industry experts answer to: “Which Fig. 28 - Size of orderbook from shipowners based forward five years from now, which cities will be cities have the strongest capabilities and are best in the city the five leading maritime centers of the world?” positioned for the digital transformation of the Source: Lloyd’s (2015) maritime industry?” Source: Menon (2019) % of industry experts selecting each city Source: Lloyd’s (2015) % of industry experts selecting each city million CGT 1000 1500 2000 2500 500 100 100 10 20 30 40 50 60 70 80 90 10 20 30 40 50 60 70 80 90 0 0 0

SINGAPORE SINGAPORE TOKYO SHANGHAI OSLO IMABARI OSLO COPENHAGEN ATHENS LONDON LONDON SEOUL HAMBURG SHANGHAI LONDON HONG KONG HAMBURG SINGAPORE ATHENS ROTTERDAM HAMBURG ROTTERDAM DUBAI COPENHAGEN DUBAI HONG KONG GUANGZHOU COPENHAGEN HOUSTON ISTANBUL TOKYO TOKYO SHANGHAI NEW YORK NEW YORK HOUSTON ATHENS HONG KONG BUSAN ANTWERP ROTTERDAM ANTWERP BERGEN NEW YORK OTHER CITIES OTHER CITIES MIAMI

42 43 APPENDIX A – OVERALL RANKING FOR ALL/TOP CITIES

Left: Subjective Indicators of 15 Cities

Right: Objective Indicators of 50 Cities

44 45 city. (measured as market cap in millions USD) was port. obtained from Bureau Van Dijk’s database APPENDIX B: METHODOLOGY Orbis and Bloomberg. Values were allocated DEALOGIC to cities according to the location of the stock DREWRY exchange. AND DATA SOURCES Data for mandated and arranged maritime Drewry provides a list with the top 21 port operators in the world in 2018, based on loans was gathered from Dealogic for the PETROFIN RESEARCH year of 2018. Dealogic is a platform used by TEU throughput. Values were allocated to DEFINITIONS WHAT IS A CITY AND ITS GEOGRAPHIC investment banks worldwide. Banks were Petrofin Research provided a list of the existing cities based on the location of company BOUNDARIES? SHIPPING CENTERS sorted according to the location of their shipping portfolio of the top 40 shipping headquarters. WHAT IS THE DEFINITION OF MARI- maritime headquarters. banks in the world. The corresponding values TIME ACTIVITY? In this report, we defined a city as CLARKSONS DATABASE were allocated to cities according to banks’ encompassing an area that can be reached maritime headquarter. MACROBOND – WORLD BANK During almost 20 years of research, Menon within a two-hour drive from the city center, The Clarkson Database was used for CLARKSONS DATABASE Macrobond were used to collect data from collecting various data of shipowner To evaluate the trade level on stock exchange has defined maritime activity as: “All com- approximating to a radius of 200 km from the World Bank’s 2018 index over quality of information, such as city of registration, fleet in each selected city, Menon and DNV GL MARITIME TECHNOLOGY panies that own, operate, design, build or city’s center. This definition is not sensitive to port infrastructure. The Quality of Port size in terms of CGT, fleet value in terms analyzed the data on the number of listed 11% Americas deliver equipment or specialized services to all artificial administrative borders, and captures Infrastructure measures business executives’ of USD billions and number of shipping companies retrieved from the Clarksons 23% Europe kinds of ships and other floating units.” More most, if not all, relevant maritime economic CLARKSON DATABASE perception of their country’s port facilities. companies with HQ in each shipowners’ city Research Capital Markets (Shipping 15% Middle East, India sub-con and Africa specifically, for data collection purposes, we activity related to a city. Data are from the World Economic Forum’s of registration (for shipping companies with Intelligence Network). Furthermore, on The size of each classification society’s 7% North Asia Executive Opinion Survey, conducted for defined the maritime industry as economic more than five vessels in their portfolio). each city’s stock exchange the team also classified fleet (measured as CGT) is allocated 31% Scandinavia 30 years in collaboration with 150 partner activity of firms registered in the following DESCRIPTION OF DATA SOURC- The Clarkson Database was also utilized to analyzed the trading volume of bonds, IPO to cities by using the location of their 13% South East Asia institutes. Responses are aggregated using NACE rev. 2 codes: 5010, 5020, 5030, 5040, collect data of ship management information, and Follow Ons for the years of 2017-2019. respective headquarter. Total CGT carried by ES AND METHODOLOGY sector-weighted averaging. The data for 3011, 3012, 3315, 5222, 5224 and 7734. This such as city of registration and fleet size in The number of listed companies measures the each ship, was retrieved from the Clarksons relative importance of each city as a maritime the latest year are combined with the data industry categorization is broad in the sense terms of CGT. We used both World Fleet Research World Fleet Register. EXPERTS’ ASSESSMENT for the previous year to create a two-year Monitor, WFM Vol 9 No 12 December 2018 finance hub, while the trading volume tells The Clarkson Database was also used to that it covers four different sub-sectors, which moving average. Scores range from 1 and Shipping Intelligence Network on the us something about the volume of financial measure the size of fleet (CGT) delivered all include maritime activity. The NACE rev. 2 We have built up a global panel of Maritime (port infrastructure considered extremely Clarkson Database to collect the data. The activity in each city. These two data sources by active shipyards as of current fleet and codes 5010, 5020, 5030 and 5040 account Industry Experts who have made thorough underdeveloped) to 7 (port infrastructure data were analyzed by Menon Economics. combined give us a good measure of each orderbook. The fleet size per yard was for the shipping industry, while the codes assessments of their own cities as well as considered efficient by international To evaluate the fleet value at a city level, we city’s relative importance as a maritime finance aggregated and then distributed to the 3011, 3012, 3315 account for the shipyard in- ranked the nominated cities on a wide standards). used national fleet values obtained from WFM hub. All companies that own, operate, design, different cities based on the location of the dustry. The NACE rev. 2 codes 5222 and 5224 range of indicators. From a total of 196 Vol 9 No 12 December 2018 and multiplying it build or deliver equipment or specialized shipyard. account for the Ports & Logistics industry and respondents, 144 experts stated a city. These with each city’s share of the national CGT. services to all kinds of ships and other floating In addition to the data over classification the last code, 7734, account for maritime experts are based in 32 different cities, from a units were considered. societies and shipyard volumes, we also used ATTRACTIVENESS AND COM- activity in the Finance & Law industry. For a total of22 countries. MARITIME FINANCE AND LAW Clarkson Database to compute the purchasing PETITIVENESS detailed description of the different NACE THE INTERNATIONAL UNION OF MA- price of ships sold in the years of 2017-2019. RINE INSURANCE & BUREAU VAN DIJK THE WORLD BANK rev. 2 codes, please visit https://ec.europa.eu/ Almost 50 % of the experts are European, WHO’S WHO LEGAL AND WORLD SHIP- These purchasing prices are allocated to cities based on where the corresponding builder eurostat/documents/3859598/5902521/KS- while the European cities constitute only 45% PING REGISTER (WORLD-SHIPS.COM) of the 15 cities that are benchmarked in this The International Union of Marine Insurance shipyards are located. We have used the Ease of Doing Business RA-07-015-EN.PDF. (IUMI) provided a list of marine insurance Index and the Burden of Customs Procedure Where we use data sources which are report. Accordingly, 32 out of 144 experts are In each of the cities, the Menon identified the Scandinavians, while Copenhagen and Oslo premiums paid to insurance companies Index provided by the World Bank. These specialized at providing maritime data only, number of experts in maritime law on Who’s BUREAU VAN DIJK – ORBIS DATABASE only constitute 2 out of 15 cities. The effect in each country for Hull Transport/Cargo, indexes are on the national level, but since such as Clarkson and Lloyd’s List, we have not Who Legal and the number of maritime Marine Liability Offshore Energy. In addition, laws, rules and regulations often are identical of “home bias” during the expert assessment The Orbis Database was used to collect made use of these NACE rev. 2 codes. lawyers on World Shipping Register. These premiums for P&I clubs are included. National across cities within a country, we argue that was minimized by giving an equal weighting information about number of patents two sources include a comprehensive list values are then allocated to cities based on the indexes are representative on the city level. to cities when the experts were asked to rank developed by maritime companies registered of experts and firms in over 100 national their corresponding maritime financial and cities from one to three for different aspects in the NACE rev. 2 codes: 5010, 5020, 5030, jurisdictions, and the two sources enable insurance activity/importance. Each city’s and indicators, where one is best and three 5040, 3011, 3012, 3315, 5222, 5224 and us to capture both the expertise and the share of the national values is computed is worst. 7734. The number of patents per company TRANSPARENCY INTERNATIONAL extensiveness of maritime law activity in each by multiplying the national values with a were then allocated to cities based on the ratio measuring each city’s relative financial The Corruption Perception Index, which location of the headquarter of the company. and insurance importance. The city specific measures the perceived level of public WORLD SHIPPING REGISTER (world-ships.com) ratio consists of an average two inputs. The sector corruption, is based on data from Data from World Shipping Register was Regional spread of maritime experts The 294 maritime experts divided into roles: Number of experts in each part of the maritime first input is a share measuring the amount Transparency International. Owners, managers, public servants and industry (some are experts in several areas) used to collect information about number of of non-life insurance premiums in each academics maritime schools located in the different cities. city relative to aggregate national non-life insurance premiums. The second input is CORNELL UNIVERSITY, INSEAD, AND 127 a share measuring the number of non-life PORTS AND LOGISTICS THE WORLD INTELLECTUAL PROPERTY insurance companies in each city relative to ORGANIZATION the total national number of non-life insurance THE AMERICAN ASSOCIATION OF PORT companies. These two shares are combined The Global Innovation Index aims to 82 AUTHORITIES 62 to one ratio by taking the average, and thus capture the multi-dimensional facets of works as a sorting key for national marine The World Port Ranking List, provided by The innovation. This index is used to rate the insurance premiums. A critical assumption is American Association of Port Authorities, was cities based on opportunities with respect to 23 that all the firms included in computing the used to allocate total cargo throughput to entrepreneurship. ratio are delegated to cities after the location cities. The list includes the top hundred ports of their headquarter. in the world, and values are allocated to cities based on the location of the port 24% South East Asia 29% Owners of maritime companies

24% Scandinavia 58% Managers in maritime companies Shipping BUREAU VAN DIJK, BLOOMBERG & 22% Europe 5% Public servants CLARKSON DATABASE LLOYD’S LIST TOP 100 PORTS 2018 16% Middle East, India and Africa 6% Academic researchers Maritime finance finance Maritime ritime Technology ritime 10% Americas Lloyd’s List rates the top 100 ports in the Ma The number of listed companies on each 4% North Asia

Ports & logistic services logistic & Ports city’s stock exchange were obtained from the world based on TEU throughput. Values were Clarkson Database, while the market value allocated to cities based on the location of the

46 47