VDR: Fundamental change

Michael Behrendt says unexpectedly long crisis changing face of industry.

German shipping is undergoing “fundamental change,” says Michael Behrendt, president of the German Shipowners Association (VDR), in its latest annual report.

The former chief executive of Hapag-Lloyd writes that changes have been caused by “the unexpectedly long crisis” which impedes a sustainable recovery in freight and cargo rates.

He said the progressive depletion of shipping portfolios along with tougher ship financing requirements imposed by German banks “have been tough challenges for shipowners".

“Smaller and medium-sized shipowners in particular are increasingly forming alliances and achieving success by raising joint financing and boosting their overall efficiency,” he said.

Behrendt believes that even more alliances, cooperative arrangements and mergers will have to be formed to build strength for the future.

“For some, the issue is sheer survival,” he said

Behrendt said that “every conceivable effort” should be made to secure Germany’s position among the leading shipping nations of the world.

“After all, there are more than 480,000 jobs at stake, all of which depend on Germany‘s medium-sized shipping industry.”

Chief executive Ralf Nagel pointed out that German shipowners pay nearly to EUR 1bn ($1.34bn) in income tax and social security payments each year for their direct employees alone.

“This contribution the shipping industry makes to growth and prosperity will be in jeopardy when new uncoordinated environmental regulations are introduced in rapid succession and are applicable to European companies only, placing an unfair burden on our industry,” he said.

“We therefore need a fair balance of interests to ensure that quality shipping made in Germany and Europe is to continue playing a major role in the world.”