A new United Arab emerges

A new United Arab emerges

For years United Arab Shipping Co., an outfit unique among container lines in being owned by a consortium of governments, went about its business with little fanfare and few fireworks. That is now changing, and because of a number of important changes under way, a new and more outward-looking United Arab is emerging as the company approaches its 30th anniversary year in 2006. Yet its new chief executive says the company will seek its own path, differentiating itself in important ways from many of its competitors.

"The way we do business will not change significantly. We take a hands-on approach to customer service, which differentiates us from the big companies out there," said Ken Bloch Soerensen, president and chief executive, in a recent interview.

For the traditional United Arab, the changes are significant. The company, which is owned by the governments of Bahrain, Iraq, Kuwait, Qatar, Saudi Arabia and United Arab Emirates, will be on a steep growth curve for the next two years, taking delivery of its first new tonnage in nearly a decade. Eight ships, each with a capacity of 6,500 TEUs, are on order and will be delivered by 2008, increasing the line's capacity by 75 percent.

More importantly, unprecedented organizational changes are under way. The company is relocating most key managerial functions, such as vessel operations, container management and corporate marketing, from Kuwait City to a handsome office in Dubai, the cosmopolitan hub of Middle Eastern commerce. It is taking the step of assuming direct control over formerly third-party agents in Europe and Asia, a move that is part of Soerensen's plan to create fluid organization ripe with opportunities for internal advancement.

"The third-party agents that UASC has in place in Europe and Asia have, for the most part, served us well," Soerensen said. "It is our intention to blend the existing organizations into a new structure that would encompass an ownership interest from UASC and also create opportunities for existing and new employees of UASC to engage in agency activity as a means of immersing them in day-to-day business and remaining close to the marketplace."

Soerensen himself is the biggest change. The first non-Arab to head the profitable company, the Danish Soerensen is a veteran of senior roles at Maersk and APL. In an indication of the industry's high regard for him, he was appointed the first head of the European Liner Affairs Association, the European version of the World Shipping Council, a job he held for two years before joining United Arab last July. His global perspective is now very much a part of where United Arab is headed.

Though the company remains based in Kuwait and regards the Middle East as its home turf, Soerensen sees United Arab as a global organization, operating in many regions and drawing on talent from an equally diverse range. His deputy chief executives are Jorn Hinge from Denmark and Khalifa Al Shebli from Saudi Arabia. The regional offices in the Middle East, Asia, Europe and North America, respectively, are managed by Waleed Al Dawood from Saudi Arabia, Guenter Kuhberg from Germany, Bjarne Jensen of Denmark, and Anil Vitarana, a native of Sri Lanka.

"The Middle East is a growing market. Dubai is now the 10th-largest port in the world," Soerensen said. "We intend to convert our 30 years of experience in this market to stay in the forefront of market development. At the same time, we do not wish to put all our eggs in one basket. We intend to strengthen our position in other major trade lanes that we currently operate in such as Asia-North Europe, Asia-Mediterranean and Mediterranean to the U.S. East Coast.

"We will not sacrifice quality for the sake of growth," he emphasized. "Our growth is of a manageable scale that makes this possible, and we do not have to overcome the hurdle of merging di-vergent corporate cultures that some of the recent consolidations have created."

Soerensen strikes a cautious note on the subject of ports and logistics. "It is fashionable to offer global logistics services. We will not follow the pack just to be fashionable. We will engage in broader logistical services only if a feasibility study proves we could be successful and profitable," he said, sounding equally cautious about port operations. "Getting into the terminal business is not high on my agenda. Once again, if the right opportunity presents itself that would appear to be a good investment, we will be willing to pursue the possibility."

Peter Tirschwell is vice president and editorial director of Commonwealth Business Media's Magazine Division. He can be contacted at (973) 848-7158, or at ptirschwell@joc.com.