GULF & BEYOND

UAE, Dubai 2013 | MARITIME | INTERVIEW

TBY talks to Lars Oestergaard Nielsen, Managing Director of the UAE, Qatar, Oman, and Iran of Maersk Line, on the significance of Dubai to shipping and the company's activity in Africa at large.

Lars Oestergaard Nielsen
BIOGRAPHY
Lars Oestergaard Nielsen joined the management trainee program of APM–Maersk in Denmark in 1992, and thus has over 20 years of experience in the Container Shipping Industry. Before moving to Dubai, he was based in Shanghai at APM Terminals in the role as Chief Commercial Officer for the Asia region. During his time with the APM–Maersk group, he held a number of management positions in Colombia, Uruguay, the Philippines, New Zealand, and Sri Lanka.

What is the importance of Dubai as a hub?

Dubai is a hub, which brings a few benefits; however, it is not the only hub that we operate from. We also have another hub in the region; Salalah in Oman. Dubai brings one major benefit, which is a very large local market. Not only do we have the ability to service the rest of the Gulf, but we also have a large local market, which means that we are not only bringing products to Dubai to move them out further afield, but are also bringing assets here to support large local business. Dubai has a very unique position in this sense.

Do you provide tailor-made solutions for different companies?

The shipping industry is a very low-margin business. Some people would argue that it is even commoditized. In that respect, going tailor-made in our part of the supply chain is not ideal. Our business is about volumes. We need to have fairly high utilization levels to make the market function. Like an airline, our products are perishable. Once our ship has left the port the product disappears. We cannot put it in a warehouse and sell it next week. We have to sell it this week. If there is no cargo on the ship this week, then that opportunity has disappeared. That means tailor-made products are not something that you see a lot of in this industry. We meet our clients' needs in terms of service offerings around the product. This service aspect is more tailor-made.

What has been your development strategy in the region for the past few years, and what is it today?

The major change in the focus of the industry, and for us as a company, is that exports are growing at a faster rate than imports. As a shipping company, we have to be much more focused on being able to service export needs. Traditionally, the region has played host to import-driven business because there is limited production, and consumables are mostly imported. There has not been much export cargo. But that is now changing. The companies here in Dubai and the region are now increasing their output. We have observed the flows in our business changing. It used to be that for every container leaving the Gulf two would be coming in. That is changing now. We are now down to a ratio of 1.6 or 1.7. The balance of trade is starting to shift.

What is your relationship with Jebel Ali Port and other government authorities?

I meet with the authorities fairly often. They visit and I participate in various forums and discussions. Officials have recently been here to discuss their ideas related to creating a green economy, and wondered if we would become a partner in that. As to our relationship with DP World, I think it is well known that Maersk is one of its biggest customers both locally and around the world. We have a very close relationship.

What is your relationship with Safmarine?

Safmarine is owned by Maersk. We keep it as a separate commercial entity, since it offers a different, more personal product experience, despite offering largely the same product as Maersk Line. As a brand, Safmarine is better suited to smaller companies, whereas Maersk Line is more suited to large industrial companies. It's all about branching out and covering different needs in the market.

How do you assess Dubai's relationship with Africa?

Personally, I think it is really important that Dubai does not lose its affiliation with Africa. I say this because we are very involved on that continent—we have many people on the ground there. In fact, we are present in practically every African country. Africa is big business for us, and is a market that we expect to continue growing in the future. Dubai has a long-standing tradition of facilitating trade to and from Africa, and I think its important that Dubai continues to nurture and protect this position in the future.