Maersk - Move highlights potential for the North-East

Sep 14 2006 North East Vision

September 2006 will go down as a momentous date in the history of the North-East's shipping industry. For it is this month that the UK subsidiary of one of the world's biggest shipping groups, AP Moller-Maersk, relocates its ship management division to Newcastle's thriving Quayside.

The significance of this news cannot be overstated. The move, which was agreed last year with One NorthEast, will see 40 staff relocate to Trinity Gardens on Pandon Street, Newcastle.

The team will be responsible for the crewing and technical management for around 70 British-flagged vessels operating around the world.

The ship/fleet management section, which is part of The Maersk Company Ltd - is currently responsible for the largest commercial fleet flying the Red Ensign, and is also the largest private recruiter and employer of UK seafarers.

It is little wonder, then, that Alan Clarke, chief executive of regional development agency, One NorthEast, was thrilled to see Maersk relocate to the region.

At the time of securing the agreement, he said: "This deal is a major coup for the North-East. We have a rich shipping heritage in the region, so it is fitting that one of the world's biggest shipping companies has chosen to relocate part of its business here.

"This agency's aim is to make the North-East the location of choice for leading national and international firms, and this multi-million pound deal is yet another indicator that we are heading in the right direction to achieve this."

Equally happy is Mark Malone, managing director of the Maersk Company Shipping Division. Mark, who is responsible for overseeing the safe and profitable operation of the fleet, said: "Our fleet is expected to grow considerably over the coming months and we see further opportunities for recruitment, particularly for sea staff and officer cadets.

Our plans are to grow and sustain our business in the North-East while also becoming very much involved in the local business community. I'm sure that we can add further to the already substantial maritime and naval presence in the region."

Certainly, the move has enormous potential for the North-East. It will create an estimated 100 new, highly-skilled jobs over the next three years and will recognise the continued importance of the sector to the region's economy.

Mark said: "Generally, people don't realise the potential or indeed size of the industry. Shipping is now the third largest service industry in the UK and, perhaps surprisingly to most, is now ahead of aviation in terms of national economic contribution, despite its modest comparable visibility.

Taking into account the industry's background, heritage and tradition, this region has immense potential. The availability of maritime and professional skills regionally means that there is real opportunity to seek further inward investment opportunities."

Just as the North-East provides Maersk with additional investment opportunities, the company may act as a focal point for other organisations hoping to exert their influence on the industry.

Indeed, Maersk has already started forging links with businesses and training providers to encourage more young people from the region to work in the industry.

Mark said: "We have already discussed with South Tyneside College and Newcastle University the possibility of increasing opportunities for trainees and graduates with maritime skills both locally and internationally.

The visibility of careers and opportunities within the shipping industry is low and by working in partnership with other key organisations in the North-East, we hope to change that perception and increase awareness."

The relocation also gives further credence to the argument that the perceived North/ South gap is narrowing. Individuals and organisations are finally realising that there now appears to be little reason to be based in the South.

The region boasts excellent transport links with the rest of the UK and Europe, and One NorthEast is leading a drive to attract larger numbers of visitors to the region.

"It's important that we all sell Newcastle and the North-East as a logical and competitive choice", Mark said.

"Workforce availability is better, office accommodation is more economical and - thanks to the availability of technology - the increasingly important work / life balance for staff is far easier to achieve.

"The extensive investment in tourism will help us as more visitors come to the region and subsequently communicate its merits and benefits elsewhere."

Mark is under no illusions, however, about the difficulty of the task ahead. Despite the UK's great reputation for shipping during the first half of the 20th Century, the industry endured a difficult time in the 1980s and 1990s, as companies invested in cheaper locations outside the UK.

However, the introduction of Tonnage Tax by the UK Government in 1999 and similar schemes in other European countries has reversed this decline and increased shipping investment in the UK and Europe.

Mark said: "We have come out from a steep decline in shipping investment to the UK since the introduction of tonnage tax. We now have a healthy and supportive environment to conduct international business.

"By the very nature of an international business, the choice for geographical location is varied. Increasingly, the decisive factor in choosing the preferred location comes down to the local workforce and, therefore, the ability to attract the skilled resources required to manage and grow the business.

"These considerations include the availability of knowledge and experience as well as the recruitment and training capability that exists. We believe that the North-East delivers all of these advantages and, essentially, is why we decided to relocate to the region."

The relocation of Maersk's shipping division is a feather in the cap of a region that is desperate to revive its reputation as a centre of excellence for maritime skills. With Maersk preparing to lead the journey towards this goal, everybody associated with the industry will be keen to climb on board.