New report identifies the risks for Danish shipowners especially when it comes to the dependence on China in several areas, competitors’ control of critical port infrastructure creating a risk of Danish shipping having less preferential access to strategic waterways than its competitors outside Europe, data vulnerabilities, and dependence on others especially when it comes to the production of alternative, green fuels.

“As a small country with a large merchant fleet, Denmark and our European allies must prioritize framework conditions that allow our shipping industries to compete on the global market. We need to avoid critical dependence on others, especially when it comes to the production of the alternative, greener fuels that will power the green transition of the shipping sector in the years to come,” said Anne H. Steffensen, CEO of Danish Shipping.

Danish Shipping has commissioned global advisory firm Macro Advisory Partners to produce a report titled Shipping: A Strategic Industry in a More Competitive World that analyses the risks and opportunities facing the Danish shipping industry in a changing world.

The report highlights a series of key market risks arising from structural changes. They include more frequent geopolitical shocks, critical dependence on China in several areas, fragmented capital markets and data vulnerabilities.

Shipping companies and Danish policymakers face key market risks to mitigate arising from these structural trends. These include:

  • The scale of China’s industrial policy support and its shipbuilding and maritime value chain presence creating leverage over Danish shipping firms that will be amplified if China can assert a lead in green fuels and vessels.
  • Fragmented capital markets and potentially tighter lending conditions leading to the relocation of ship finance to other jurisdictions and undermining financing for the upscaling of green fuels.
  • Higher frequency geopolitical shocks, shifting geopolitical alliances and competitors’ control of critical port infrastructure creating a risk of Danish shipping having less preferential access to strategic waterways than its competitors outside Europe.
  • Data vulnerabilities created by increased software usage and China’s presence in port infrastructure reassert the need for shipping companies to implement security by design.

“We must seize the opportunities that lie ahead of us. Danish shipping companies are among the most ambitious in the world, when it comes to embracing the green transition. We need to make sure that we turn going green into good business. And we need to make sure that Europe and our partners take the necessary steps to massively scale up the production of the green fuels needed to power a green future for the shipping industry. Shipping will help make Denmark richer, greener and safer,” said Anne H. Steffensen.

The report also mentions opportunities “for Denmark to enhance its existing maritime competitive advantages and improve their competitiveness going forward”.

These include working within the EU to expand trade ties and upscaling European green fuels production.

“It is an expression of timely diligence that the government has established a growth team for Blue Denmark, which is currently working on recommendations for the future framework conditions of our industry,” highlighted Steffensen.

Sea transport currently accounts for over 17% of total Danish exports (Statistics Denmark), making it Denmark’s largest export industry and a key driver of the Danish current account surplus.

Within Europe, only German and Greek operators and groups have a larger global presence.

According to the new report, shifting global trade routes and the imperative of the energy and digital transitions create significant opportunities for Denmark to enhance its existing maritime competitive advantages and improve their competitiveness going forward. These include:

  • Utilising the EU’s Global Gateway to expand trade ties and green and digital port infrastructure in Middle Powers and developing economies.
  • Providing policy support and leveraging the EU and Denmark’s advanced green fuels regulatory framework to overcome cost barriers and ensure stable demand for upscaling European green fuels production.
  • Expanding Denmark’s presence in manufacturing advanced maritime equipment and vessels to service the low-carbon economy.
  • Integrating new technologies, data-sharing and digitalisation to enhance the productivity of Danish shipping, shipbuilding and port infrastructure, as well as the shipping industry’s adaptability to more frequent shocks.

Shipping is Denmark’s largest export industry, and it is particularly important to the country as a small, open economy that has become prosperous by trading with the rest of the world.

“Shipping will help make Denmark richer, greener and safer” …. concluded Steffensen, CEO of Danish Shipping.