A Conversation with Wouter Jacobs

Good morning, Wouter, and welcome back to Commodity Conversations. Please tell me a little about yourself.

I am the Executive and Academic Director of the Erasmus Commodity & Trade Centre in Rotterdam.

We run two commodity programmes: a commodity elective on our MSc course at the Rotterdam School of Management and a part-time executive programme in commodity trading.

Are you an ex-trader?

No, I’ve never traded commodities. I’m a pure academic. I’ve spent my professional life in academia. I have a master’s in science in spatial planning and economic geography. I did my PhD in management with a thesis on the political economy of port competition between Rotterdam, Dubai, and Los Angeles.

If you grow up in Rotterdam, you live with the port, the cargo, and the ships. It is the DNA of the city. And we’re proud of it. Rotterdam is a place where people talk straight. It forms you. Also, growing up in a big port makes you at a young age aware there is ‘another world out there’.

What is spatial planning?

Spatial planning is about regulating the use of land. And land is scarce in the Netherlands. Strategic planning, where I did my specialization, focuses on using scarce resources broader than land and aligning stakeholders around common objectives. During my PhD, my focus shifted towards more institutional factors shaping differences in regional economic outcomes, such as the level of state involvement or the role of mandates and decision-making structures of port authorities. I travelled to Dubai and Los Angeles for my PhD. It gave me a global focus on the economic geography of trade.

What is economic geography?

In economic geography, you ask why particular activities occur in specific locations. For example, it is logical to situate an oil refinery in a port to reduce transport costs. But why are so many traders located in Geneva? That’s a more complex question to answer.

After my PhD, one of my first commercial projects was studying the relationship between business services and the port economy. I talked with bankers, insurance companies and lawyers, learning about the white-collar jobs around maritime trade, shipping, and port operations. They introduced me to commodity trading as the business that makes things move.

A whole world began to open to me, and I could see everything come together. I began to ask why I didn’t know about this world before – why had no one taught me any of this? Why are the universities not teaching this?

I saw a great opportunity to swing my academic career in a new direction. I love to teach and research. I wanted to transmit my intellectual fascination and newfound awareness of the commodity world to my students. I realized we needed educational programmes on commodities, so I decided to build them.

I designed and set up our executive program, which is, let’s say, an MBA light. I recently told my wife, “It’s, in a way, a gift to myself, which I can enjoy every year and learn from.”

You spent two years in China. What did you learn from your two years in China, and how did that come about?

It wasn’t full-time. I was there as part of a partnership agreement that the University of Antwerp in Belgium set up with a university in Chongqing, China. I taught a course on global production networks. It was a fantastic experience, learning from subtle cultural differences and about different perspectives on world affairs.

Are there any commodity courses in China equivalent to what you have here?

I’m pretty sure there are. However, I’m not aware of, let’s say, a Geneva or Rotterdam type of approach to teaching commodity functions such as shipping, finance, or execution.

Could you tell me a little about Erasmus University Rotterdam and the School of Management? You mentioned earlier that you are relatively well-placed in the rankings.

Merchants founded Erasmus University in 1913 as the Netherlands School of Commerce. The university has traditionally offered courses on business and maritime trade. The Rotterdam School of Management was founded in the 1970s, inspired by American business schools. It was when prominent Dutch multinationals like Shell, Phillips, and Unilever started to advocate this type of education.

In economics and business, we rank among the top ten in the world. The Financial Times consistently lists RSM in the top ten in Europe. The Financial Times ranked our MSc in International Management as third in the world in 2022.

Why is the Erasmus scheme, where EU students can spend one year in different universities, called Erasmus? Is it because you guys started it, or is it just a coincidence?

Good question. The inter-European subsidy scheme is for students who follow parts of their curricula in other universities and countries. It is named after Erasmus, as is our university. Erasmus was a humanist scholar from Rotterdam, known for his critical essay ‘In praise of folly’ from 1509/11. He was among the first travelling scholars visiting other European universities to learn and share ideas. ‘Open-mindedness’ and ‘world citizenship’ are still core values of our university.

Let’s start with your executive programme. What is it?

The executive program is a leadership program for young professionals with eight to twelve years of experience in the commodity space. Our focus is not on operational trading skills but on learning to navigate in times of uncertainty. All businesses are exposed to uncertainty, but the commodities business is especially so.

We have four core modules where participants learn to understand the driving forces behind the commodity markets: geopolitics, sustainability, risk and compliance, and technology and innovation.

As part of the leadership program, we confront our participants with real-life situations. We teach them what people expect from their leaders regarding ethics, values, culture, and courage.

Participants learn from each other. It’s an integral part of the learning approach. We have a rich ecosystem in the classroom which allows participants to share experience, knowledge, opinion, and valuation of purpose – everything that is required to have long-term continuity in their business rather than, say, meeting the P&L or securing their bonus.

We teach participants to make decisions when they need an intellectual assessment and a social understanding of their company and its business environment. It’s a crucial part of the programme.

We don’t try to teach participants how to trade – they already know how to trade or are familiar with trading. However, the programme is not only for trading companies. We have participants from commercial, functional and risk roles in banking, inspection, and shipping.

How long does the executive program last?

We have a three-and-a-half week physical, full-time class exposure spread over six months and three locations. We start in Rotterdam in the Netherlands. The first three days are onboarding because participants come from different companies with different functional roles. We want first to make them comfortable with each other so they can learn from each other.

It’s different from a purely academic university classroom. There is much more transmission of existing ideas in an executive programme than in a master’s degree. Here you want to facilitate the exchange of opinions and experiences and stimulate inter-generational dialogue with the current business leadership or industry veterans.

We do personality assessments and speed dating for the first three days. It includes a Marine course where participants spend day two in a boot camp solving annoying problems. Professionals from the Marines lead the day, building teamwork.

How many people are there on each course?

We have a small group of about twelve to fourteen people. We could go to a maximum of 16 or 17, but no larger because otherwise, you would get cliques – and we wouldn’t have the bandwidth to give each participant the attention that we want to provide them with.

We then do a whole weekend, moving into the four modules I mentioned. We structure each day as Understand, Apply, Reflect.

How does that work?

If we have a class on geopolitics, we start the morning with Understand. Typically, a university professor would provide some theoretical, conceptual understanding. The second part of the day is Apply, where everyone works on an assignment, business case or role play, applying what they have learned to their business and presenting the conclusions to the others.

The last part is Reflect, where we typically have the C suite in to give a campfire talk, reflecting on their own experience and moral dilemmas. On the fifth day, participants begin work on an integrated business case that will last throughout the programme. They advise on an investment in an asset, considering geopolitical and sustainability risks. They present their progress in a scenario plan for their business line or company for 2040.

Traders typically look 12-18 months ahead, but our participants are working towards taking leadership positions in their companies. They need to have a long-term perspective and take a strategic approach. It’s not about their daily P&L. They learn to strategize around uncertainty. And we force them to mobilize knowledge. Have they talked with their risk guy? Have they had coffee with their strategic suppliers or customers? How are they looking at the world in the future?

To become a leader in a company, you need to have a long-term, strategic perspective, and you need to have the courage and drive to mobilize assets within your organization and convince others to move in a particular direction.

How is the executive course split geographically?

This year, we did the Rotterdam portion in January and the Colorado, Denver portion with the JP Morgan Center in March. Denver has the same four topics but with an American perspective. We conclude in Singapore with an Asian view.

I can understand Singapore, but why Denver?

Denver is not an international commodity place, but it’s a domestic one with renewables, oil, ags, and mining. Most commodity professionals know New York or Chicago. These international places are lovely to party in, but if you want to understand America, you need to penetrate deeper into the heartland. And the partnership is with an established centre at the University of Colorado, the J.P. Morgan Center for Commodities and Energy Management, with strong business ties across North America. The Rocky Mountains add to the scenery.

Is the course multi-commodity?

Yes.

How is your gender split?

It’s typically about 40 per cent women and 60 per cent men. Our supporting companies are outspoken about gender balance and are keen to have women in the programme.

Who pays for the executive course? Do companies typically sponsor their employees, or do individuals pay individually?

Companies overwhelmingly sponsor their employees and meet their costs.

Do new people join in Denver and Singapore?

No, participants follow the programme from beginning to end. It’s the journey together that matters.

How many different nationalities are on the course this year?

This year, we have participants from Kenya, Nigeria, Italy, Germany, the Netherlands, the UK, and Switzerland. I think that’s it, about five or six nationalities.

What is an example of something you learned while doing the programme?

I once asked one of the programme’s contributors, an international trading company COO, about his best trade. He told me that he remembered the worst trade he had made but couldn’t remember the best trade because he was still looking for it. The best trade was still to come, but the worst rate he will never forget. For me, this was an excellent message.

So that is your executive learning course. Tell me a little about your master’s programme.

We offer a commodity elective for our MSc students in our business school.

Like elsewhere in Europe, we operate the Bologna system in the Netherlands. Students do a three-year bachelor’s degree and a one-year master’s degree. They can then do an MSc in a business school. The average age of our MSc students is around 23 years old.

Within our business school, we provide an elective course. It is what the name implies; students need to choose it. It is an introductory course in commodity, trade, and supply networks.

Everybody in the business school follows their own MSc programme. They can pick their verticals, for example, supply chain management: finance, marketing, strategic management, et cetera. They also need to choose horizontal electives.

For the last seven years, we have had around 50 to 60 students per year who do the commodity elective. We dive into the mechanics of the commodity business and the culture. What does it take to be a trader? We tell them they won’t become a trader just like that. We also tell them that trading is not for everybody, but plenty of opportunities exist other than trading. Trading companies need analysts, operators, finance, et cetera.

We want to transmit to them that there is a mechanism – commodity trading – in the world economy that impacts their daily lives but is poorly understood. We teach them how it works and explain the skills they need to succeed in the business. It’s an enormous eye-opener for them.

We bring in outside practitioners to share their experience. It’s not a business you can learn from a textbook. Each year some of the students say, “This is the business that I want to be part of.” And then, I have achieved my goal.

Why not a full master in commodities; why an elective?

A couple of years ago, when I addressed the option of a full MSc in commodity trading, the Dean of the Business School said, “Wouter, this is not so straightforward. You need to build content and a reputation of excellence while at the same time doing your own marketing and recruitment and navigating university politics. To be accredited as a full master is an intense and cumbersome process. My advice is to start building content and align with faculty through our elective system”. It was valuable advice, as formalizing a university education is not easy. Indeed, I can tell.

Also, students who have finished their bachelor’s degree are typically 20 years old. Most don’t yet know what they want to do in life. They may know they want to do something with supply chain or finance but aren’t yet committing to a niche business like commodities.

Our commodities elective is one of the most popular in the business school. About 60 of our 400 students choose it each year.

How would a student in France or Spain who has finished their bachelor’s degree apply to the Rotterdam School of Management – and take the commodity elective?

You must apply and be accepted as a full-time MSc student in the business school. You can then choose the commodity elective.

How much does a master’s degree cost? I imagine the students must finance it themselves.

Yes, they do. However, the EU subsidizes MSc programmes for EU citizens. If you’re an EU citizen, you pay less than €3000. If you’re a non-EU citizen, it costs around €25,000. You must pay your living expenses on top of that.

Do many of the Rotterdam School of Management flow from Erasmus University, or does the majority come from other universities?

If you do your bachelor’s degree here, it’s logical to continue with your master’s here. However, we have students from other European universities who join during the Bachelor of International Business Administration. Our business school and the university are well-ranked.

In addition, there are a lot of exchange students who are full-time students in universities in Brazil, Hong Kong, Shanghai, or Canada that have an exchange structure with Erasmus University. It’s a peer-to-peer exchange. All universities have them.

When I started at Cargill, they wanted people straight from bachelor’s degrees. It didn’t matter what bachelor you did – it could be music, divinity, or ancient Greek. Cargill wanted to train people themselves. Is that still the case, or are the trading houses now looking more for MSc students?

I can resonate with this line of thinking. I advocate making Batchelor students aware of possible careers in this great industry. And there are always people that already have an appetite for commerce at a young age. And the younger recruits are, the more you can form them.

But I also think it is changing. The commodity trading business has become more complex. Companies will never refuse a candidate just because he has studied ancient Greek, but they are increasingly looking for candidates with a more analytical and commercial bent.

Do you receive financial support for the master’s programme from trading companies?

The academic programme is subsidised, so we cannot monetize the course. The trading houses provide educational support by giving classes on trading, hedging, shipping, or what it’s like to be an operator.

In addition, we launched the Erasmus Commodity & Trade Centre (ECTC) in January. We formalized our activities into a dedicated centre within the Erasmus family. Our mission is to nurture ideas and talent for tomorrow’s trade. We do this through education and applied research and by building a community and an international learning platform. As I mentioned, merchants founded Erasmus University, and an endowment from industry partners enables us to achieve our mission and ambitions.

Who are your partners?

Cargill, Cefetra, Count Energy Trading, Eneco Energy Trading, ING Bank, Interfood, VARO Energy and Vitol.

What would be your elevator speech about why a) somebody should do an MSc with you and b) choose the commodity elective?

We are hands-on and business minded. Our course is theoretically informed but practically driven. We aim to give our students real-world exposure to commodity trading, from pre-trade analytics to contract execution.

We are ideally placed to do that because we have the entire ecosystem in Rotterdam. We can show students the port operations, the tanks, the storage facilities – warehouses full of metals or soft commodities. We can give our students the look and feel of a physical trading operation. And we are internationally connected.

We have been running the commodities elective for MSc students for seven years, and it has built a solid reputation. Students now come from all over Europe.

Are the courses in English?

Yes.

What about sustainability?

Sustainability is an essential element of our business school philosophy. We look at how to measure and monitor sustainability and guide sustainability into future leaders’ strategy, taking a more systemic, planetary boundaries approach.

We also look at the moral and ethical questions that crop up. There is sometimes a conflict between the trader and his company. A trader might want to do a deal to maximize his P&L, but a company will take a more comprehensive view to ensure the trade complies with all the regulations. It will also want to protect its reputation and brand.

At the same time, we emphasize that hunger for commerce, risks, and adventure drives the business and defines the business culture.

What do people typically do when they have completed their MSc?

Many of our graduates go into commodity-related companies, although most will not go immediately into trading. Operations and execution in physical trade are what this port city is most about. It depends on the employer, of course, but the old idea of “sink or swim” is less prevalent than it used to be. Most companies now initially put graduates into support functions such as analytics, finance, shipping, or contract execution.

There is a high demand for our MSc graduates. The sector is short of talent. Our students will not end up unemployed at the end of the course.

The business school is delighted with student demand, and the business is delighted to have a pipeline of new talent. It is a win-win.

Is there anything you would like to add?

People underestimate the relational aspect of making things happen. It fascinates me. In a company or team, you have a bunch of people who need to engage with, understand, and trust each other fully. These relationships are the essence of business. They spur the exchange of ideas, cultural understanding, and awareness about different parts of the world.

Money is a reward, but relationships drive businesses forward. It holds for me in setting up the Erasmus Commodity & Trade Centre. I had to deal with business executives, university executives, and professors and align around a common objective while building meaningful learning content. People matter. They give you reflection, trust and can push you in the right direction.

Finally, I would like to thank Reinette Sluijk, our programme manager in the Executive Programme Leadership in Commodity Trade and Supply Networks. She has been foundational to the programme, bringing ideas into execution, and has made a tremendous difference!

People – and personalities – matter.

That’s all the questions I have. Thank you, Wouter, for your time and input.

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