Date: 19 October 2007
Time: 1:30 PM - 4:00 PM
Venue: E-Library, AIM Conference Center Manila
A Shared Destiny: The Role of the Philippines in the Global Shipping Industry
We had a very successful Globalization Lecture Series with Dr. Basil Papachristidis this afternoon. His advocacy for a Filipino-owned international shipping business to employ FIlipino seafarers echoes my sentiment of 1988 upon my return from self-exile in the USA (Steve Psinakis is his good friend, and so my reference was to our anti-martial law roots) -- "water, water everywhere, but not a Filipino global ship owner and only seafarers in sight." Nieves Confesor served as our well-informed and insightful reactor to his paper, while I summarized the audience reactions, Nieves' comments and Dr. Papacrhistidis' presentation.
My summary points : (1) The changing environment of international ship manning industry reflects the shipbuilding industry's own history (cf. Hyundai Shipping's successful wrestling of the industry away from Japan, which itself wrestled the leadership from Europe and America before that in large part due to interventionist government support and not purely market-led forces). The alpha of the industry is really the mindset of littoral states like Greece and the Philippines which provide workforce tempered for the "blue ocean" (new areas of business engagements –rather than the "red ocean" where competitors have bloodily fought over limited markets) which Papachristidis equates to his "blue sky" –of course where the sky meets the sea is literally the mariner's horizon. Unfortunately the Philippine industry and government leaders have seen only the very near and not the distant horizon figuratively, despite our ancestral ability to navigate the trade winds of the Pacific and hence saw literally and figuratively more distant horizons and opportunities.
(2) Some people commented strongly on the declining enrollment of Filipinos in marine engineering while the opportunities are now radically changed with Papachristidis claiming that "logistics and transportation are replacing information technology as the tool of industry in the 21st century" and that "shipping is the basis for our current global civilization" –indeed "oil, grains, cars or refrigerators could not be transported to where they are needed" and hence Filipino seafarers and the Philippines as a country "perform the most important industrial activity in the world."
This alpha mindset of the issues of seafaring into ship building into ship owning has in fact led to, in other countries, a resurging interest among MBA's, physics, and other graduates to join the industry. The Philippine government must help arrest the decline in marine courses enrollment, but industry leaders must also provide some foresight. In Prof. Confesor's study, the focus was on the human resource concerns on dual stream maritime education and training (upgrading competencies towards supervisory, managerial, and entrepreneurial capacities of seafarers), need to strengthen compliance with ILO-IMO standards for quality officers, the shortfall of marine officers in the next ten years, cadetship and apprenticeship, integrating labor market information, etc.
(3) The omega of the industry (from a supply chain view) are of course the requirements to transform seafaring into ship owning Filipinos -- and entrepreneurship is where we can focus on –for the ship owning issue to be thrust into Philippine consciousness. Why did the Philippines fail to develop this industry? Part of the reason may be the government-led policies in key players which shaped the shipbuilding industry in the Americas, Europe, Japan, and even Korea after. Spanish galleons and American flag laws dominated colonial Philippines. After World War II, the global industry was so government directed small independent countries could not develop their own globally competitive industries (shipbuilding, ship owning, seafaring).
Now, Papachristidis is saying that Wall Street is paying attention to the consolidation of players, and hence Greek and North American interests get funded by global money for global projects. Here's where the Philippines may enter –with the workforce as its key ace up its sleeve. We can own up to the responsibility of global players as suggested by Papachristidis –never compromising standards and principles such as in safety, dignity, and well-being of workers; equitable compensation, job security, aspiration to higher office; professional seriousness; respect for the environment; and efficiency and commitment to communities which they serve.
(4) Papachristidis pointed to his own family business in Canada being moved to Greece. Now due to the euro's impact on the effectively uncompetitive wage rates of his firm, it is deliberately moving to a fully-Filipino manned shipping business; it will take only a few years for the crew to be elevated to supervisory levels -- which in fact the fully-Filipino manned vessels of Hellespont demonstrate. Hence, as financial factors are taking over the real factors responsible for comparative advantage in the shift of competence across countries, countries like the Philippines seem favored to develop shipbuilding and ship owning businesses, the benchmark being Greece whose conditions can now be studied by new players on the global stage -- including India and the Philippines.
Excerpts from Dr. Federico M. Macaranas’ letter to Ambassador Delia Domingo-Albert,
The Role of the Philippines in International Shipping (.pdf)
Basil Ph Papachristidis
Chairman, Hellespont Holdings Ltd