Growing up around the family business, founded by his grandfather and run by his father, Hing Chao always knew that a career in shipping was a sure thing if he felt so inclined. With this knowledge that one day he could follow in his forebears’ footsteps, Hing tentatively explored other career options, being determined to forge his own path first and foremost.
“After graduating from Durham University, my father put me through a series of internships with different shipping companies in Hong Kong and Europe, but I wanted to discover my own interests outside of shipping first,” Hing explains.
“So that’s what I did. I spent a lot of time with the nomadic hunters in Inner Mongolia working to preserve their culture. Then, relocating back to Hong Kong, my attention was focused on doing similar things with cultural preservation and intangible cultural heritage. I started to build a track record and became known for my work in that space.”
Hing channelled his passion into a major project, founding the Hong Kong Culture Festival in 2015 as a means of preserving and promoting arts and culture in his home city. “As a citizen of Hong Kong, I felt very strongly upon my return in 2006 that most young people don’t really know our history or have a strong sense of cultural identity,” he tells The CEO Magazine.
“I think that’s got to do with the fact that Hong Kong is such a highly commercialised city and people’s attention is so engrossed with making profit that they neglect who they are, where they came from and where they are going, just by default.
“I felt a responsibility to improve the general cultural atmosphere of the city, and it’s a point of orientation for not only myself and not only for people interested in arts and culture, but also hopefully for the city as a whole. There was a need in Hong Kong for a more comprehensive artistic and cultural platform to unite traditional arts – a platform for different groups, artists, not-for-profit groups, performing arts, music and more to come together and celebrate our cultural heritage.”
Moving towards maritime
Indeed, Hing’s varied career across business, culture and heritage, philanthropy and education gave him an extra edge when he later joined Wah Kwong Maritime Transport Holdings – an invaluable knowledge of the wider world and appreciation for all elements that coexist in a community.
In 2015, Hing became a member of Wah Kwong’s Board of Directors, having spent time in various executive positions at the company in both the real estate and shipping sectors. When his older sister Sabrina, who had been working with Wah Kwong since 2002 and in the role of Executive Chair since 2013, stepped down in 2019, Hing finally felt ready to take the reins.
“It’s a very human and very humane industry,” he says. “I’ve only been involved in shipping in a serious capacity from around 2017, but the industry at large has embraced me and helped me along this journey. Sabrina only made the decision to let me take up the role after giving me a very thorough education and ensuring that the transition would be completely smooth. The beautiful thing about a family business is that a lot of these lessons learned from previous leaders or generations do get passed down from one generation to another, to become enshrined in the company culture and the ethos of doing things. We hope to become wiser as we age and move forward.”
As a third-generation family business, you appreciate it’s not easy to get out of your comfort zone and do something different.
Hing explains that even before moving into his current role, he had set some grand plans in motion. “Before I stepped in as Executive Chair, I was Vice Chair for about a year,” he explains.
“During that period, I initiated some of the things I wanted to change within the business. First of all, I perceived a need for the company to diversify its revenue streams. Wah Kwong is a traditional ship owner, so that means we provide tonnage across dry bulk, gas and oil sectors to international shipping.
“However, over the past few years, shipping has been extremely volatile and unstable as a result. This has affected the company’s profitability quite significantly. I felt there was a need to diversify our revenue stream, but also to reform our business model, so I introduced the concept of integrated asset management into the company.”
Hing explains that this decision has already paid off in dividends, and he feels that the company is now in a position to grow without compromising profits or people. “Over the past two years, the scale of our operation has doubled,” he says.
“Three years ago, we had about 30 ships, and now we have close to 50. We’re also looking at a pace of growth of around 10 vessels per year. “With that expansion also comes the need to build our infrastructure and team. Since last year we’ve identified Mainland China as an area of growth because it’s an area where we have core strength with long-term relationships with shipyards and leasing companies; it’s where we build most of our new ships, and also where we recruit a lot of our seafarers.”
An innovative future
As part of an industry that, at least to the uninitiated, appears to have changed very little over the decades, Hing is quick to quash those assumptions.
“Shipping companies that have done well have thrived on change, been adaptable and flexible, and not afraid to make big decisions,” he says.
“However, the general business environment, which is indeed very much related to the global political environment, is more uncertain today than it has been for a long time. Coupled with political unrest and disruptions brought about by digitalisation, and with an increasing number of environmental regulations, the pace of change is unprecedented.”
Wah Kwong was founded in 1952 by Hing’s grandfather, TY Chao, and today is the industry leader in providing commercial maritime transportation capable of shipping crude oil, minerals, dry bulk commodities and gas.
While the blueprint for the company Hing inherited when he stepped into the top position at Wah Kwong was strong and based on a solid foundation honed over decades of experience, there was no doubt that certain elements could benefit from improvement. “Innovation comes in many guises and forms,” Hing shares.
“As a third-generation family business, you appreciate it’s not easy to get out of your comfort zone and do something different, but that’s exactly what we did with the development of ship asset management.
“We also really embrace technology. This year we’ve focused on digitalisation in particular. We’ve always had an IT department, but that’s been more about looking at the most basic level of providing hardware and software to make sure the company runs efficiently. But now because of COVID-19 as well, we’re looking to streamline a lot of our operations by having a consistent digital strategy applied to the company and by resolving a lot of inconsistent data generated by incommensurable programs.”
In fact, Hing believes that innovation is ultimately the way forward for the entire industry – and that by ensuring Wah Kwong is at the vanguard and implementing fresh strategies with a focus on sustainability and social responsibility, the company will continue to surpass its competition at every turn.
“The very fact that ships have been manned by people since age immemorial is another factor that is being challenged by the concept of autonomous ships,” Hing reveals.
“The very way in which shipping runs as an industry and how ships run as a mode of transportation is not evolving, but being revolutionised. The transformation we are witnessing right now is immense. For nearly 100 years, people have taken crude oil as a source of fuel for ships for granted. Now that very premise is being challenged. It is only by embracing change and not resisting it that we’ll be able to not only survive, but also thrive and grow.”
Even before sustainability was at the forefront of international discussions, Wah Kwong was putting in motion steps to ensure the longevity and safety of its ships. In 1994 the average age of the owned fleet was 13 years, but just four years later, in 1998, it had dropped to two years old.
The company has strived to retain this young median age ever since. “Wah Kwong has always maintained its fleet to be young, which means technologically advanced, and we’re always looking into different opportunities to invest in new ships that burn cleaner fuel,” Hing says.
“Sustainability really applies across the entire spectrum of what we do. “First of all, as a shipping company, our workforce and our footprint are both onshore with our office operations in Hong Kong and China. At the same time, we run a lot of ships. We currently have 50 ships sailing across the world. So we’re constantly looking at ways to reduce our carbon footprint.
The very way in which shipping runs as an industry and how ships run as a mode of transportation is not evolving, but being revolutionised.
Globally, we have an increasing awareness of the need to embrace environmental sustainability. “Environmental regulations have been coming on the horizon thick and fast, and it’s important for shipping companies to take stock and come up with their own sustainability policy.”
Cultivating secure partnerships
Hing explains that Wah Kwong has carefully formed and maintained mutually beneficial relationships with suppliers both across the region and the entire globe, without whom the business would cease to function.
But as the industry and the company continue to evolve, inevitably those relationships need to advance as well. “The partnerships we have with our key suppliers, including shipyards, banks, and crewing and manning agents are all relationships that are deepening and diversifying,” he says.
“In the past, as a ship owner, we’d simply go to a shipyard to place an order and would then have a team of people to supervise and take delivery, and that was it. Today, shipyards not only build ships, but sometimes also order ships on their own account and therefore function as de facto owners. When that happens, from time to time Wah Kwong can step in to help them with management of ships and provide supervision. Sometimes we also step in as an equity partner for shipyards. So the relationship has become much more multidimensional.”
Sustainability really applies across the entire spectrum of what we do.
As a leader, Hing favours an approach that views employees as the lifeblood of the company and treats them accordingly. “I’d like to think that I’m a caring boss and employer,” he says.
“But at the same time, the company is rapidly growing and embracing change, so I need to ensure I’m putting structures into place in a disciplined way to help make people more effective and efficient at their work. It’s all about being accountable and transparent.
“I’m quite visionary. While I may not be the most involved in the company in day-to-day operations, I look at a lot of things, even in the daily jobs that my team execute, with a completely different perspective to most of them.
“I think one of my tasks as Executive Chair is to cast my gaze wider and longer than the people who work under me. So I set the vision and then make it happen. Understanding and trust between the management team and myself is absolutely critical.”
A priority for Hing has been the cultivation of a strong company-wide culture that puts people – especially its seafarers – first, at every turn. “It can be quite an isolating life, which is why it’s so important to provide better mental health support and have proper digital policies, where you allow and facilitate greater communication with the world,” he explains.
“It’s also vital for employees to be caring towards each other and to function well as a team. Teamwork is absolutely everything. We reinforce that in a more hardline, structured approach by implementing key performance indicators and putting systems into place where interdepartmental collaboration will be more transparent and audited from a governance point of view. This is in combination with a softer program of team-building, with people across departments talking with one another, and constantly sharing information and knowledge.”
Nurturing the next generation
Hing enthuses that while change is indisputably necessary, sometimes progress “neglects the most fundamental aspects, particularly the human being”. “Regardless of how quickly a lot of these technologies come about, as far as I’m concerned, I cannot foresee ships, at least on an industrial scale, not being manned by human beings at some level,” he explains.
“However, the maritime education system is very much lagging behind all these changes happening rapidly across our industry. I think maritime education as a whole has been neglected, which is why we as a company and a leader in the industry are putting a lot of focus on reforming maritime education.”
This emphasis on supporting the wider community and the prioritisation of education has seen the formation of a Wah Kwong Training Centre and partnership with Shandong Jiaotong University.
The initiative provides employment at Wah Kwong to the 120 students who graduate each year from this maritime training program, and helps create a healthy ecosystem for the industry and company to continue flourishing in the future.
“I’m very proud of the fact that a lot of people involved in senior and middle management have come through the Wah Kwong system insofar as many of them joined as young seafarers and had a whole career at sea,” Hing says.
“They went through the cadetship until they graduated as captain or first or second engineer or master, then came on shore to work for us in our office as superintendent. Now many of them are in very senior management roles, having excelled in their jobs as operational managers or superintendents because they know what life at sea is like.
“Today, most of the people coming into the industry don’t have that experience. And many of the young people around the world are no longer interested in a life at sea, which I see as a problem. We have to think of a way to make a seafaring life attractive. We have to make a career in shipping more appealing for young people and change the perception, which is always the biggest battle.”
I think maritime education as a whole has been neglected, which is why we as a company and a leader in the industry are putting a lot of focus on reforming maritime education.
While 2020 presented a brand-new set of obstacles for most businesses across the globe, Wah Kwong was no stranger to a challenge or two already. “In terms of significant structural changes in the way we do business, I think the challenge has never been greater than now,” Hing concedes.
“However, in terms of the biggest difficulties the company has faced over the past 10 years, the shipping market has been in a worse place for dry bulk and tanker shipping, so the market is not the worst it has been.
“Thankfully, under my sister Sabrina, we had been managing our finances very carefully. A lot of legacy issues we have inherited from the past, from the high tide of shipping around 2009 or so, when we bought a lot of expensive ships. We had to go through a very difficult period of taking big losses in impairments in order to enable the company to move forward. But we’ve been through that exercise, and that is indeed in many ways more painful and more difficult than what we’re going through now.”
Thanks to effective management of its finances, in combination with expansion strategies already in place, Wah Kwong was able to bounce back from the COVID-19 pandemic even stronger than before.
“Under Sabrina, we already had a small office and training centre in Northern China, and in 2019 we made the strategic decision to open a new office in Shenzhen,” Hing explains.
“Of course, no-one at the time could anticipate COVID-19, but because we had this strategic policy to grow in China, this enabled Wah Kwong to ride the storm brought about by the pandemic and sustain the growth path that we’re on. In fact, as China was one of the earliest countries to be affected by the pandemic, by April most of the yards were back to 80% productivity.”
Looking to the future, Hing expresses his desire for Wah Kwong to keep expanding while ensuring its policies, procedures and products are of the highest possible quality and guarantee integrity along every step of the supply chain.
“I’m always looking at ways to make the company more resilient in light of all the challenges that are coming our way,” he says.
“This has been a motivation as well as an opportunity for me to start looking into injecting innovation and adapting for the future. Within three years, I would say we’ll have between 80 and 120 ships owned and/or managed by Wah Kwong. At that point, we need to make a decision about if that’s the sort of scale we’re happy with, or if we want to grow further. I would like to see us strengthen our two core businesses, but also further diversify as there’s a lot of knowledge already embedded within a traditional shipping company like us, but where we have not necessarily created monetary value. So there’s a lot of potential for us to do more with the knowledge that has already developed.”
Proudly supported by: