Greek Shipping todayMarkets — By admin on July 5, 2011 at 8:59 AM
by John N. Faraclas*
Whatever it is that fires your imagination, it is connected with Greek Shipping today** and I hope you’ll find something here to delight and surprise you! I am indebted to BIMCO for this opportunity to freely express my thoughts at the most appropriate time in shipping’s world history, with respect to the development that Greek/Piraeus shipping community has undergone.
A reality, not a myth
With over 600 vessels on order worth more than US$ 35 billion, a US$ 10 billion plus modernisation programme, a fleet of over 5,000 vessels under all flags (3,500 plus under the Greek Flag) with an overall value of US$ 70 billion, a US$ 20 billion plus annual currency received as foreign exchange in the Greek State’s “coffers”, and many more other international achievements, Greek Shipping today is a fact and not a fiction! Greek Shipping is Classic! It has reached, despite being bullied, unprecedented levels of size, worth and success! There is no myth about Greek Shipping and in particular Greek Ocean-going Shipping which the world knows and or “ ignores” sometimes; only reality! Unlike other “celebrities”, Greek Shipping celebrities know they are responsible for what they are doing.
The most powerful dissyllable word in the Greek language denoting wealth is called “plutos” and same derives from the verb “pleo”, translated to: I float – did I hear you say flotation..! So welcome to plutocracy! Welcome to Greek Shipping today! Welcome to the world’s oldest democracy!
Now, you might be surprised reading the above paragraph and have… second thoughts, expressed possibly under the old saying: “Beware the Greeks even bearing gifts”, but alas! No! Despite what the Greeks have suffered in their ten millennia of shipping history and customs, needless to say what they’ve gone through over the last 500 years and in particular the last 80 ones, they managed to survive and reach the absolute top! No other nation on earth preserved its business shipping history as the Greeks! M.I. Finley in its memorable book “The Ancient Economy” clearly explains why. And in Plato’s Republic too, one can also enjoy what the real democracy offered to shipping business, its entrepreneurs and its employees! Do read the famous eight-page passage and you will see why… Piraeus has become the world’s most powerful maritime centre, a centre which has really nothing to fear from any other center in the world. The Greeks always preferred Universalism, with respect to their bases of operation in trade, and conversely in shipping, but the western society and its “guardians” had second thoughts!
It is not by coincidence that for the first time in modern Greek history there exists a Greek shipping international dream team: Admiral Mitropoulos, Secretary-General of the IMO, Spyros Polemis, President of ICS and ISF, Philip Embirikos BIMCO’s President, Nicky Pappadakis, Chairman of INTERCARGO and Nicholas Fistes Chairman on INTERTANKO! This stems from the size of Greek owned shipping, universalism and Piraeus’ leadership in the field!
Taxation is another anathema and a product of dictators of any kind; having said that, I can call the ministers of Economy: financial tax dictators – others call them financial terrorists, as they terrorize the entrepreneur and the employee too, particularly with whatever entails in Greek Shipping today; you know what I mean…
Despite market conditions which worsened as the year progressed, Greek shipping passed a number of key milestones, but is important to acknowledge that such milestones are makers on a journey and not destinations in their own right! They have achieved a great deal, but further challenges certainly lie ahead (which I have warned of over the last ten years in my RECAP column of SHIPPING International Monthly Review). As I write my current views, there are many uncertainties in the World Economy. However, I guess that my warnings have urged the Piraeus boys to lay solid foundations… otherwise I believe it will be very difficult to continue their progress, developing and expansion of the shipping business during the coming years – particularly the new generation and or the offsprings of those existing over the last century!
How many shipowners down town Piraeus today have seriously taken on account climate change? Climate change is a big factor in both geopolitics and actual climatic change!!!
Moreover the environmental issues have great implications in the costs of running ships as well as vis-à-vis the liability on say pollution. The new regulations and those to come will force shipping companies, and in particular the Greek private-styled ones, to clean up their acts in response to the “demands” of the environment! Its sounds a bit odd what you read, but there is a big difference between Greek style “private” shipping companies and “public” ones! Today, none but the most dogmatic or ill-informed can maintain that we do not face a problem with potential to cause a catastrophe on a global scale, if we do not take steps needed to avoid this…. This is a clarion call, warning or whatever you like to call it, for action! Save the environment , the Greek one being no exemption. After all, the MEPAS derive from Greece following the concept launched by the late George P. Livanos, the HELMEPA, a cause to be proud of!
The Chinese euphoria…Although the world shipping boom was fuelled by the Chinese “appetite” to make steel, for which they desperately need iron ore and coking coal, an “ulcerous” situation may unfortunately come out of this… Be prepared for inevitable situations!
Another thorny issue is that of piracy and terrorism; when does piracy transpose into terrorism? Different approach of piracy in the late seventies with the Nigerian saga, completely different today with say the Somali one… involving mostly, as the news bulletins report, Greek beneficial owned tonnage. The Piraeus boys are warned of grave “consequences”…
If Piracy and Terrorism is not enough, what are the prospects of a global pandemic, either of influenza or some other debilitating virus? According to experts with whom I have liaised, it’s not if, but when same happens! How prepared are the Greeks down town Akti Miaouli? Are there any contingency plans? I mention this, as Piraeus, despite the successes has a very demanding repayment portfolio…
Business is one of the main drivers of poverty reduction. Building business depends on infrastructure and that is essential for Greek shipping, particularly the situation in Piraeus. The shipping infrastructure of Piraeus is more or less second to none, and its development over the last thirty years: unique! Given the improvement of telecommunications and the electronic era, Shipbroking, Marine Insurance, Legal and Shipfinance activities to name but a few, have no match! Needless to compare same with the situation prevailing in Piraeus over the last the forty or fifty years ago. Did I hear you say conferences and or exhibitions? Posidonia over the last ten years, and despite some venue hick-ups, proved to be the event. Major groups such as informa, Mare Forum, Seatrade, the Economist stage international conferences in Greece and other infrastructure works in combination with the Athens 2004 Olympics made Piraeus the driving force of international shipping centres.
The Greeks are proud because of their track record in shipping; we have a rich tradition of shipping innovation and rich pickings. Our nation gave birth to the Andreadis’, Carras’, Chandris’, Embirikos’, Fafalios’, Goulandris’, Hadjipateras’ Kulukundis’, Latsis’, Livanos’, Lemos’, Los’, Margaronis’, Martinos’, Niarchos’, Onasis’, Pateras’, Tsakos’, Vardinoyiannis’ shipping families and many others, who certainly have offered a lot as examples to the new generation of the nineties which entered the field…. Many of the old as well some of the new breed of owners have unsolicited contributed to charity; an admirable purpose. Their donations within Greece and abroad speak for themselves! Needless to say that Christopher Columbus came to the Greek Archipelago and in particular to Chios to find specialist navigators to assist him in discovering another route to the Subcontinent and he discovered the Americas! That proves the deep routes of tradition in navigation and beyond. You have to be a good master at the helm of your boat to be able also to be a good shipping entrepreneur offshore!
The women’s support and backing in the entire shipping business within the Greek philosophy and family structure is unique. The latest and long overdue recognition for women come in the most traditional way: the unveiling of the Seafarer’s Wife monumental sculpture in Galaxidi, at the Gulf of Corinth in Greece, is clearly in respect to our women who supported us in any way and by all means and from successful seafarers made us masters of the seven seas! First class shipowners, shipmanagers, shipbrokers… you name it!
Moreover the Greek WISTA is another example of the development of Piraeus and Greek shipping in general as the world’s premier maritime centre. WISTA Hellas are organising events in Greece and abroad that twenty years ago was unimaginable! Their latest Posidonia gathering made other countries WISTA members recognise this special Greek shipping force’s capabilities! Greek shipping women form a determined group which more than actively participates in the success and developing of today’s Greek shipping, both within Greece and worldwide! Greek women today are successful shipowners of acclaimed shipping groups, academics, shipmanagers, shipping lawyers, shipfinance managers, shipping fund managers,shipbrokers and shipagents, bunker brokers, marine insurance specialists to name but a few of the professions involved! The latest 10th Cadwalleder’s lecture in London at the IMO headquarters showed the world what a Greek shipping woman achieved in bringing over from Greece more than 100 delegates for this annual London Shipping Law Centre event; congratulations to Dr. Aleka Mandaraka-Sheppard, the founding director of the centre! Having said that, one can also see the achievement of Cass Business School, the Shipping, Transport and Shipfinance, thanks to Prof. Costas Grammenos who nearly thirty years produces in the City University of London top executives for Greek shipping offices. The greatest number of graduates and members of both LSLC and CASS operate now in Greece.
Now, there should also be caution as to where the Greek shipping and Piraeus are heading for! There is the Damocles’ sword question on whether the continuous success of Greek Ocean going shipping for a fourth year running will continue.
On this issue many have expressed different views, but there are many ways to interpret a successful market and conversely the Greek Ocean going Shipping’s success – many formulae exist, and only history and its shipping analysis will one day tell (you see, news is what they don’t tell us). Obviously since going above the 2000 points on the BDI and with tonnage built by the end of 2001 the market was, is and will continue to be a success for Greek beneficial tonnage, save the fact that the oil price factor too played and especially now plays an important role – the energy parameter still governs the industry. Post 2002, and despite the higher BDI, the stumbling block being the newbuildings “greedy” prices, not to mention the unjustifiable ones on the second hand tonnage, the market’s volatility halts further real progressiveness/success that one could expect! One could also claim that there are few Greek companies listed in the world’s major stock exchanges and given the absence of listings with the Athens Stock Exchange (sincerely hope it’s a matter of time for listings of ocean going vessels there too), the liquidity factor on the other side of the Atlantic, in Greece and elsewhere counts a lot!
Having said that, this does not necessarily mean or indicate the need to be listed. Unlisted has else to offer…A strong market is the one that 10 (ten) years time charters form the norm of say minimum 60 centum of the fixtures. Only the mid-end 50’s, 60’s and early 70’s produced a substantial success! The number of successful big Greek companies percentage-wise, in or outside the stock markets and visa versa, is relative small and in order to pull-in or pool-in needs, more consolidation. The 80 (eighty) centum of the Greek tonnage belongs and its is distributed amongst small to medium size companies owning 4 to 12 vessels, thus only with consolidation and robust financial support and backing can both compete and become further successful. One cannot talk of a sustainable success unless we also begin manufacturing in Greece and or outsource elsewhere to become the products beneficial traders and not just the carriers. The human factor (seafaring) too plays and will continue to play another Damocles’ Sword “role”, and unless same is properly organised and developed, things might be sour… unless… The blame rests with the state including the 30year old “developed” new society and habits as well as the shipowners who failed to address the matter when it appeared.
The Piraeus shipowners should have also opted to build ships in Greece; they did successfully from 1969 and 1972 onwards respectively in both the Skaramanga and Eleussis; they could have done it in the mid nineties too! No excuses. If they had done so, they were going to be now in a more prominent and safer situation!
Now with the BDI down at the 3,000 points (from the region of 11,000 a few months ago) things get more than strange! I guess that the Piraeus shipping fraternity overlooked the euphoria and is now “poised” to go through the dire straits of the world’s worst economic crisis…. again time will tell, but what I am trying to say, is that Piraeus relied too much on outside market prognosis factors; in my view a grave mistake.
Conflicts of interests: The Greek State, the shipowners, Europe and al. How “different” and “indifferent” all four groups are vis-à-vis Greek Ocean going Shipping.. Now this is the case/question one can write a million words. This is the cat and mouse case and visa versa – believe it or not! All parties referred to this question play their own role, and we can see the results from the luck of seafarers. There is no excuse a t a l l! One can see the way maritime education and training is being conducted, for example there doesn’t exist a single training ship! S h a m e! Even on the campaign to attract seafarers the Greek State blames the shipowners and the shipowners the Greek State! Fancy going live on TV and see what happens? Eh?
In comparison with other shipping nations, yes there is a good rapport established, but its foundations, function and futurability are obsolete.
“Hellenism owes its existence via the prophesy of the Delphi oracle which the Athenians counseled: ‘Zeus condescended to decree that the wooden wall should remain the sole impregnable fortress to save you and your children.’ This is the message which two and half millennia back, set the seal upon the eternal marine performance of the Greeks. Since then, and through the ensuing times, it is in fact in the sea that Greece sought and achieved progress. At present, in pursuing that eternal tradition, it is well justified in placing the prosperity of its people, the progress of its civilization and its entire future in the steel walls of the world oceans!” – the late Professor, shipowner and banker Stratis G. Andreadis nearly forty years ago.
Today, the same exists but with a bit of different parameters.
There is a great respect for the sea from all shipping circles and same is epitomised by philanthropist George A. Tsavliris’ statement during our last meeting in September: “I live in the sea (on my boat) as my earnings come from the sea.”
Once upon a time, it was really the Greek governmental understanding and support that has given rise to the favourable climate which fostered the Greek shipping “miracle”; it is about time same returns with robust decisions. Sometimes the right decision tends to be the most difficult decision. But someone has to make it! People panic the minute they see someone doing anything different… The indifference issue should be briefly along the following lines:
“Shipping for our country is not solely of economic significance. It has been brought to the level of a literally national cause, for it is through shipping that Greece is internationally the lead. The nation attains prominence in the world as one of the largest shipping powers and draws from outside earnings that are capable of being boundlessly increased and of forming an invigorating and decisive force in our overall progress.” – again by the late Prof. Stratis G. Andreadis.
Europe should respect the cause of Greek shipping and remember its contribution to its liberation. Those who wish to regulate from Brussels should first ask the experts down south in Piraeus. IMO is the only proper answer. The world at large should pay homage to Greek Ocean going shipping and abandon actions which only hooligans employ.
As I have said in the past, the Greek adventure is still there and will never end; every decade one can see all the achievements of the Greeks in shipping and measure their capabilities to all intents and purposes. Nowadays, most of the Greek shipping is concentrated in the Attica area, given the unprecedented attacks of various regimes, which under the tax proviso they took off their masks and they …committed suicide in promoting a non human and democratic scheme; shame, shame on you!
Finally, we have to remember that it was the Law 89 in 1967 which laid the foundations of what Greek Shipping is today, particularly in Greece!
The taxation anathema elsewhere (particularly in Great Britain) brought scores of U.K. service offices in Piraeus: lawyers, brokers, bankers, the lot! That proves how Greek Shipping today calls the shots from Piraeus and how… “thoughtful” some business hooligans act elsewhere.
I guess that if the Greeks down town Akti Miaouli get their act together and build also a training ship for furthering the education of marine cadets, Greek shipping today will be better not only for tomorrow but the next millennia to come!
*John N. Faraclas comes from Chios’ traditional shipping and seafaring families which are involved in the shipping adventure for almost 700 years, in Russia, Greece, the United Kingdom, Bermuda and the USA. As per the family custom he sailed onboard dry cargo ocean going ships. After graduating from the Anargyrios and Corgialenios College of Spetsae Island, a British standards public school, he studied Shipping and shipping related studies in UK and Greece. His first office encounter was at Christopher Margaronis’ Law Office in Pireaus. He has managed dry cargo tonnage for both his family and clients in the UK and Greece. A competitive Ships Sales and Purchase broker with Overseas Agency Ltd in the mid 70’s and then on his own has also been teaching Shipping, Shipmanagement and shipbroking in the Piraeus College of Shipping studies for four years. He has given a great number of lectures after being invited by Universities and Professional Shipping Associations. Moreover he has participated in more than 300 maritime exhibitions and 500 conferences. The Shipbuilding industry was and continues to be his love affair and got involved with the privatisation of Shipyards in Greece and in the UK. Currently he lives in the United Kingdom, he is also involved with shipping journalism and is the International editor of SHIPPING International Monthly Review.
** This article was published in BIMCO’s bulletin no.5 2008