With offices in around 130 countries, the A. P. Moller-Maersk Group from Denmark is internationally recognised for its activities in shipping, energy, offshore, retail and other businesses. Its container shipping division, Maersk Line is the market leader in worldwide container services, operating more than 500 container vessels and 1.9 million containers. Many of these vessels are owned by separate companies within the Group, because the company is of such a size that it makes it prudent to diversify and develop core competencies and effectively manage risk. In line with this strategy, the company recently established Maersk Shipping Hong Kong Limited.

Why Hong Kong?

“As a multinational company, Maersk has vessels registered on flags all over the world. But in Asia Pacific, all our ships were based in Singapore. As a conservative company continually looking to spread our risk, we needed to have a second flag in the region and Hong Kong was our only logical choice,” explains Captain Henrik Uth, Managing Director of Maersk Shipping Hong Kong Limited.

The services that Singapore and Hong Kong ports provide are closely matched and were the only two realistic locations in Asia Pacific for Maersk, according to Captain Uth. Hong Kong’s unique advantage is being closer to China and therefore a bridge into the Mainland for the company; for example, Hong Kong registered ships enjoy preferential port rate charges.

China is a significant growth opportunity for the Maersk business. China’s foreign trade growth has averaged 24% per annum since joining the World Trade Organisation in 2001. China is now the third biggest national exporter in the global economy, after Germany and the US.

Hong Kong also has a first class register. Hong Kong’s registration fees are designed to encourage quality ship owners who invest in the ongoing maintenance of their vessels. Registration fees are discounted for companies after three years if they have a 100% safety record. This focus on quality and safety ensures Hong Kong-registered ships have a good reputation for compliance with international standards and enjoy very low detention rates. This minimises unnecessary costs and ensures customers always receive their deliveries on time.

“This is a very good model, but the size of discounts and the registration fees need to be continually reviewed to ensure Hong Kong remains competitive,” says Captain Uth. Other advantages include the rule of law which provide for a level playing field for all and also no tax in this industry.

Looking toward expansion

“Bringing in ships to Hong Kong and registering them has been very straight forward. Credit in all aspects must go to the Marine Department, which has made everything relatively simple,” said Mr Halfdan Ross, General Manager Operations of Maersk Shipping Hong Kong Limited. To date, the company has registered seven vessels; within the next year, it plans to bring in between seven to 14 additional ships. Over the next five years, the Maersk Shipping Hong Kong Limited fleet could be growing to be approximately 45 ships, comparable to the number of ships A.P. Moller-Maersk Group has registered in Singapore.

The company currently employs five management and administration staff in its offices in Hong Kong. It will be sourcing crew in China, and is currently in the process of establishing a joint venture in Mainland China to facilitate this. Within the next 12 months, Maersk plans to recruit between five and seven staff for the joint venture – which will gradually increase as more Chinese seafarers are recruited.

Hong Kong experience

As a multinational corporation, Maersk employs re-location agents to facilitate its international expansion and staff relocation. Since Maersk already had other companies based in Hong Kong, establishing the new business was even easier.

Captain Uth said, “Setting up in Hong Kong is very straight forward. However, if you are brand new to Hong Kong, InvestHK makes a big difference by providing all the knowledge and expert assistance you could possibly need.”

www.maersk.com