King’s Point Guest Lecture

A few weeks ago, I was invited to give a guest lecture at the Merchant Marine Academy in King’s Point, NY. The audience was a senior class of 23 students.

I was hesitant at first, but ended up very pleased that I accepted. I chose to talk about my experience in shipping and in life through shipping, rather than discuss academics and mechanics. Even though it was right after lunch, and some students were clearly nodding off, I hope most enjoyed it. I certainly did, and, given the opportunity, I will gladly go again.

Following is a transcript of my lecture:

Dear Friends,

First of all, I wish to thank Dave and all of you for inviting me here today. Over the years, I have heard many great stories about this academy, and when Dave suggested me to come and give a guest lecture, I was very excited. At least I was at first…then after a week or so, I started to think about what I was going to talk about, and panic started to set in. E-mails were exchanged, I tried to convince Dave that I may not be the prefect candidate of the job, but he would have none of it.

So here I am. Now why did I think that I was not the right candidate? I was born in Antwerp, one of the largest port cities in the world. Both my father and grandfather worked in shipping. I have worked over 20 years in the industry, both in the liner as well as in the dry bulk space. I have traded physical vessels, commodities, FFA’s. Because of shipping, I have lived in 3 continents and traveled extensively in 5.

Well, I quit. I left shipping 3 months ago. So these next 45 minutes may not exactly be the lecture that you were expecting and will be more like storytelling, rather than academics and case studies. But along the way I hope to illustrate the importance of staying motivated and reinventing yourself.

The shipping business is great. No 2 days are the same. It is actually rare to find such variety and excitement in the business world. Just read “The Shipping Man” or “Viking Raid” by Matthew McCleery, and it is hard to imagine a more exciting and potentially glamorous profession.

Shipping is also important. Goods and materials transported make the world go around. Everything we touch or buy has been shipped at some stage. It is certainly seems to contribute more to society than inventing and trading exotic financial instruments.

My career in shipping started a little over 20 years ago, much like many things in life: by accident. I was a slightly troubled youth who, despite of coming from a loving family, made questionable choices. Having never finished college, I was at a loss as to what I wanted to do with myself. Then, almost like in the movies, while out drinking in a bar, a friend of friend suggested me to join him in Miami. At the time he had been working for a few years for a Miami based Ro-Ro company called Seaboard Marine, had already recruited another Belgian and was looking for more. A month later I flew over for an interview and a few months after that I packed my bags and left. Miami was a very different place back then. It was the time that shooting German tourists at BP station was considered a sport, and not a single palm tree had been planted on Ocean Drive yet. When I told my colleagues that I was looking to rent an apartment in South Beach, they thought I was crazy. If only I would have bought instead of rented…

For Seaboard, I lived and worked, besides in Miami, in San Pedro Sula, Honduras, New Orleans, Houston, and finally Lima, Peru. When I arrived in Peru, the country was just emerging from a severe political, economical and humanitarian crisis. Terrorism, most famously portrayed by the Shining Path, was brought under control, curfews were being lifted and industry was being re-established. Exports of base materials like copper and fishmeal, as well as imports of finished goods grew exponentially. It was a great time. So great, that when my company wanted to bring me back to Miami, I refused. With 3 local German partners, who already were representing Hapag Lloyd, I started a freight forwarding business. I learned however that, even though I am a big believer in partnerships, all interests have to be very aligned if there are 4 of you, especially when starting a small business.

So when the opportunity came along to move to New York to work in something new: the dry bulk industry, I took it. I had visited New York a few times before, and was quite fascinated by the city. Of course visiting and living in a place are very different things. Manhattan can be a cold and intimidating town, especially pre-tinder, but I somehow managed to find good friends, a great wife and have 2 wonderful kids along the way.

The company that brought me to New York is called Southern Star Shipping Co., a Greek family business, which besides owning about 20 dry bulk vessels, has a large industrial presence in Nigeria. There the company runs the largest flour mill, pasta factory and polypropylene bagging plant on the continent, as well as having sizeable stakes in the construction, fertilizer and agricultural industries. All in all, they have about 7000 employees in Nigeria.

Being a family business, the organization was quite horizontal, reporting was easy, and everyone was expected to be able to perform various tasks at any given time. This is very different from a traditional corporation, with clearly defined tasks, so it led me eventually to be in charge of all chartering, but also of trading of cement related products like cement, clinker and gypsum. This gave me a unique opportunity to experience the industry from an Owners’ as well as from a Charterers’ side.

It was a great 15 years. I traveled to nice places, like Pittsburgh, PA and Tokyo as well as to less nice places like Guyana and Nigeria. I met wonderful people and forged lasting friendships.

However I feel that I also have to address another side of shipping, which is considerably less glamorous. I am not going to throw a ton of stats and numbers at you, but I just want to quickly illustrate a few facts. I feel this is important, because it is up to you, the next wave of professionals, to address these issues to the best of your capabilities.

For every responsible Shipowner, like Maersk, there are many Owners, small and large, who run their vessels in deplorable conditions, putting the crew in continuous danger.

Piracy of course gets the most press, with even Hollywood getting in to the act, but vessels are lost regularly, especially in the Indian Ocean and South East Asia, because of Owners’ negligence or disregard to potential catastrophe.

The International Maritime Organization, puts the number of lives lost annually at sea over 1,000 for each of the past five years. Despite the difficulty in obtaining precise and reliable data for such losses, IMO says that approximate figures for 2012 included approximately 100 lives lost in the fishing sector, 400 in domestic operations, and around 500 in other categories, including international shipping. Weather surely plays a factor, but cargo choices (think of nickel ore) and vessel maintenance as well as crew training are big culprits as well. During my stay at Southern Star we had 3 catastrophic events, with 9 lives lost and significant environmental damage, and all were due to human error. And this is a company with a stellar record of maintenance and safety. So it can happen to everybody, but the responsible Owner will do everything to minimize risk.

Then there is the considerable environmental impact of vessel transportation as well as the materials being transported.

Ships transport 90 percent of the world’s consumer goods. Ships burn tons of fuel per hour, generating 3 to 4 percent percent or more of human-generated global warming gases—more than commercial aviation.

• Ships generate 15 to 30 percent of the world’s smog-forming emissions.

• Bunker fuel burned by ships is 1,000 times dirtier than highway diesel used by trucks and buses.

• A single ship coming into harbor produces the smog-forming emissions of 350,000 new cars.

In total, the shipping industry burns over 300 million tons of bunker fuel per year.

It is clear that the industry is working on this. Most of the current R&D budget goes towards fuel economy and efficiency. However this is more cost driven than because of social responsibility. Again, this is where you come in by pursuing responsibility in your career.

After unloading their bulk loads like oil, coal, and mineral products, marine vessels require cleaning. Since this practice is restricted in several port and coastal areas, operators wait until they are in international waters to proceed. Oil products residuals carried by tankers are the major source for discharges.

Then there are the spills:

The two most damaging oil spills were not the largest but took place nearby ecologically rich areas, particularly in terms of fishing. The Amoco Cadiz was carrying 223,000 tons of oil when it sank in Portsall Bay, France, on March 17, 1978. Some 400 km of Breton coastlines were affected. Following the incident, not only was the ecological equilibrium greatly disturbed but local economy – based on fishing – was also completely paralyzed. On March 24, 1989, the oil tanker Exxon Valdez hit a reef in Prince William Sound, Alaska, thereby spilling 37,000 tons of oil of its 180,000 tons load along 1,700 km of coastlines. Even if comparatively to other major spills it was of lower volume, it still carries today the title of the largest animal death toll.

The Prestige and Sea Empress oil spills that occurred off in the European Atlantic generated a significant amount of pollution that destroyed many aquatic species.

On the cargo side, mining has a lot of impact. It is extremely destructive to extract metal from ore. It is usually leached out in chemical process, which leaves a high volume of toxic sludge and heavy metals.

Because the global population is growing, demand for ore is growing. Furthermore mining is often a primitive process – people using only their bare hands and bare feet, with no protection – about 14 million people around the world are at risk from mining. A few years ago, I visited a bauxite mine in the jungle of Ghana, which by the way is probably the most advanced and law abiding country in West Africa. It is the only place in the region, where you can safely hail a cab in the streets. The mine was run by Alcan, now Rio Tinto, which has a great track record in sustainability and responsible employment practices. At the mine, there was housing, a school, a hospital. However I can assure you that, no matter how sick you felt, that hospital was one of the last places you would want treatment.

Population growth and urbanization means that mining, harvesting and shipping will continue to increase. This will give you great opportunities to be change agents in making the world a better, cleaner and safer place.

I know it is hard not to sound like a hypocrite; I have fuel-burning toys and plenty other items that have caused suffering along the way. However I like to think that if you regularly reflect on this, it may alter your lifestyle, by being mindful of your footprint, and paying less importance to material things.

And this brings me to part 2 of this lecture.

I know this is not a commencement speech and I am certainly not in the self-help business, but I want to share with you a few life lessons I learned along the way.

Do not get stuck. Identify or acknowledge routine, then tackle it quick and often. This does not mean you immediately have to quit your job upon the first sign of boredom, but make sure you are able to find ways to stay motivated. Otherwise move on or even re-invent yourself. Do not underestimate your knowledge and capabilities, so you will never sell yourself short. I do not like the term “goals”, because it implies that once something is reached, you can sit back and relax. I prefer “purpose”, which sounds like the job is never finished. Think Jerry Maguire: “The journey is everything.” You may have to go to your parents’ movie library for it, but you’ll be glad you did. Regarding office environment, I can recommend Nikil Saval’s excellent new book: “Cubed”. 60 percent of us works in cubicles and 93 percent of us dislikes them. Time flies and before you know it, you are at another office Christmas party pretending to have a good time, but feeling like you are wasting your life away. There is a reason why the latest generation of entrepreneurs often has dropped out of college, but still wants his work environment to resemble a college campus.

Never stop learning. Take classes, read books. Nowadays it is easier than ever to do both. You can take free classes online in any subject you can imagine, and you can carry hundreds of books in your pocket. As I told you earlier I never finished college. However in the last 15 years I have never stopped learning. I have continuing education certificates in subjects ranging from interior design, to marketing to Buddhism and Modern Psychology. Over the years, I have attended courses at Parsons, Sotheby’s, NYU, Princeton and Penn. Apply the same variety to your reading. Switch it up between fiction and non-fiction, between coffee table books and biographies.

Ethics. Be honest and dependable. Accountability pays off. Take ownership of the results before you start a task. Your motivation will change dramatically. I can recommend “Where Winners Live: Sell More, Earn More, Achieve more Through Personal Accountability” by Linda Galindo, a Park City, Utah- based accountability expert. Yes, there is such a thing, which says quite a bit about our society and business practices. Never lose sight of your values and surround yourself with people who share them. Even values that seem small, like being on time, have a significant impact on you and the people around you.

Help others. Getting involved in charity has helped me tremendously by feeling that my time in the corporate world could be redirected and even offset towards helping those in need. I have won multiple fundraising awards, including the 2013 Run, Walk, Ride Award covering all fundraising charities in USA and Canada.  In the last few years, I have raised over USD 700,000 for Multiple Sclerosis being the number 1 New York fundraiser in 2009, 2011, 2012 and 2013.

I have to say that, coming from Western Europe, having lived and traveled all over, it never ceases to amaze me how Americans come together in times of need. No matter how large or small the contribution, they feel that it is their duty to donate time, energy and money, more than anyone else. Where I come from, Belgium, fundraising like this is pretty much unheard of, and I can clearly see the different mentality every time I request for a donation. You guys are fortunate to live here, so keep making this great country proud: donate, volunteer, get involved in the happiness of others. Peter Matthiessen, who sadly passed away last month, said: “Life is hard. We are here to make it easier for others.”

As I said in the beginning, this may not have been the lecture you were expecting and I hope that you are not too disappointed and especially not discouraged. But I am sure that Dave and his fellow professors do a stellar job teaching you all the ins and outs of the shipping industry. Now if any of you have questions, shipping related or others, I will gladly try to answer them.

Thank you again, all of you for being here, for having a curious mind and listening to me, and I hope that all of you will keep learning, keep exploring.

Thanks again.