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Title: Greek-owned shipping fleet

123-t - November 10, 2005 12:31 PM (GMT)
Greek-owned shipping fleet flies flags of 45 countries

Accounts for 25 pct of global maritime trade; shipowners ask for incentives
By Nikos Bardounias - Kathimerini

Greek-owned ships represented 8.7 percent of the world’s merchant fleet and 16.5 percent of its tonnage (in deadweight tons) at the end of the first quarter, according to Lloyd’s Shipping Register data.

Despite the reduction in the number of Greek-owned ships — by 32 to 3,338, compared to the same period in 2004 — they still accounted for 25 percent of total maritime commerce. The total tonnage of the Greek-owned fleet is 110 million dwt.

According to Lloyd’s, Greek shipowners control 22.4 percent of global tanker capacity and 24.6 percent of the world’s bulk-cargo capacity.

The global Greek fleet consists of 502 tankers, 418 carriers of chemicals and oil by-products, 61 oil and gas carriers, 1384 bulk cargo and iron ore carriers, 176 container ships, 577 general cargo carriers, 139 passenger ships, 27 combined cargo ships and 54 ships of other types. The number includes 338 new ships totaling 15.84 million gross tons, 200 of which are tankers.

Greek shipowners have been especially active in recent years in investing in new ships. Despite the fact that they have considerably renewed their fleets, their orders for newbuildings account for 7.8 percent of total orders, with deadweight capacity accounting for 12.2 percent of total.

The Greek-owned fleet flies the flags of 45 countries, most of them flags of convenience that allow shipowners to avoid heavy taxation and to cut payroll costs by employing foreign crews at low wages. The most important countries under which the ships are registered are Greece (29 percent), Panama (17 percent), Malta (16 percent), Cyprus (12 percent), Bahamas (7 percent) and Liberia (6 percent).

There were 969 ships in the Greek shipping register at the end of the first quarter, up from 904 in 2004. Another 171 ships under construction are expected to join soon.

Greece’s shipping register would be much bigger if the Greek government had taken measures, long demanded by the Union of Greek Shipowners (UGS) and the London-based Hellenic Committee for Maritime Cooperation, in order to entice more shipowners to register their ships under the Greek flag.

“If the competitiveness of the Greek shipping register is enhanced, the number of ships under the Greek club will increase, and more people will find jobs. However, the Merchant Marine Ministry, though it does understand the need for changes, is dragging its feet, for unknown reasons. This is inimical to the country’s interests and the international leverage that a stronger fleet could give it,” a London-based shipowner told Kathimerini.

According to Bank of Greece data, capital inflows from maritime activities reached 17 billion euros in 2004, up 40.6 percent from 2003.

IPOs of shipping firms appear to be abating

LONDON (Reuters) - A run of public share offerings in the shipping industry is now set to abate with firms looking at mergers instead, financiers involved in the deals said yesterday.

Fotis Giannakoulis, assistant vice president of US-based Fortis Securities, said $3.5 billion had been raised by 18 IPOs on US stock exchanges alone in the last 15 months.

“This is really a remarkable number when taking into account they did not include four secondary offerings during the same period,” he told a ship finance and trade conference in London.

Giannakoulis said the unprecedented bid for capital in such a short space of time was spurred by surging global seaborne trade and high freight prices as shipowners tried to cash in on the nearly three-year boom.

Share flotations in shipping were rarely heard of before the spree, which was largely made up of Greek concerns.

Europe has only seen a couple of offerings in the same period, though Athens-based Goldenport said last week it planned to list on the London Stock Exchange — the first such listing in many years.

Giannakoulis said the funds raised were enough to finance 315 new 75,000-ton panamax cargo ships for dry commodities trade.

He said most of the IPOs were in the dry commodities sector ($1.3 billion), followed by container and oil trade worth $900 million each. Gas and other freight were much smaller.

Peter Shaerf, managing director of US-based AMA Capital Partners, said the total market capitalization for US oil tanker firms had grown from $2.5 billion in 2001 to $20 billion.

“It (the sector) now has a bigger market cap than the airline industry,” Shaerf, who advises hedge funds and other investors, told Reuters.

However, firm but lower freight rates this year, compared with the record-breaking peaks seen at the close of 2004, are pushing shipping firms to switch to mergers as a route to growing, financiers said.

“Falling freight rates created a challenging environment for shipping IPOs and they have slowed,” said Giannakoulis.

Robert Lustrin a partner with US-based law firm Seward and Kissel also said more firms would choose mergers as a force for growth.

“We will see a number of merger transactions coming up in the shipping industry as IPOs start to cool down,” said Lustrin, who worked on many of the recent US public offerings. “A dearth of new IPO candidates or demand for IPOs leads to aggressive marketing by investment bankers which could trigger mergers,” he told the conference.

123-t - November 10, 2005 03:02 PM (GMT)
Is anybody familiar to the reasons why nobody makes incentives to the shipowners in order to register in Greece?

mavrogenides - November 10, 2005 09:48 PM (GMT)
These sources here say that the greek tanker fleet poses some 30% of the worlds tanker fleet...

123-t - November 11, 2005 03:36 PM (GMT)
Án information paper based on data provided to the GSCC by
Lloyd’s Register of Shipping - Fairplay

For the 18th consecutive year the Committee presents statistical data, in the form of 11 tables, attached hereto, on Greek controlled ships over 1,000 GT, registered under the Greek and other flags. The data has been provided by Lloyd’s Register – Fairplay. The following is a short analysis of the data, prepared by the Secretariat.

Information from Table 1, compared with corresponding data from the previous year, shows that the Greek controlled fleet has slightly decreased in number of vessels, but has increased in deadweight (DW) and gross tonnage (GT).

According to the data, as of 15.3.2004, Greek interests control 3,338 vessels of various categories, of 182,540,868 total DW and 109,377,819 total GT, including, 338 newbuilding vessels of 15,839,299 GT, of various categories, on order from shipyards. Compared with last year’s data, this represents a decrease of the Greek controlled fleet of 32 vessels (0.949%), but an increase of 2,399,970 DW (1.332%) and 448,684 GT (0.411%).

Date Ships DW GT
March 1988 2,487 85,047,436 47,269,018
March 1989 2,428 81,928,296 45,554,419
February 1990 2,426 84,439,159 46,580,539
March 1991 2,454 87,102,785 47,906,852
March 1992 2,688 98,218,176 53,891,528
March 1993 2,749 103,958,104 56,918.268
March 1994 3,019 120,650,373 66,342,046
March 1995 3,142 126,128,352 71,666,943
March 1996 3,246 129,737,336 75,156,763
March 1997 3,204 127,782,567 74,982,110
February 1998 3,358 133,646,831 78,900,843
March 1999 3,424 139,255,184 83,454,890
March 2000 3,584 150,966,324 90,227,491
March 2001 3,618 168,434,370 100,220,348
March 2002 3,480 164,613,935 98,195,100
May 2003 3,355 171,593,487 103,807,860
March 2004 3,370 180,140,898 108,929,135
March 2005 3,338 182,540,868 109,377,819

The Greek owned fleet registered under the Greek flag, comprises 969 ships in 2005, including an impressive 171 ships on order from shipyards, against 904 ships in 2004. This represents an increase of 64 ships, but also an increase of 5,010,147 DW and 2,679,918 GT.

Internationally, Greek interests now control around 8.7% of the world’s total number of vessels in service and on order, 16.5% of the world fleet deadweight, or 14.1% of the world fleet expressed in gross tons (against 9.1%, 18 % and 15.5% respectively, last year). In terms of ships on order, Greek interests account for 7.8% of the total, in number of vessels, 12.2% of the total DW, or 10.2% of the total GT.

TABLE 1: Flag Analysis of Ships owned by Greek Parent Companies

The Greek controlled fleet is registered under 45 Flags.

A comparison of Table 1, which gives the total number of ships, total DW and total GT, registered under each flag, with last year’s corresponding table shows the following significant gains/losses during the year.

Country Number of ships gained/lost DW gained/lost GT gained/lost
Greece +64 +5,010,147 +2,679,918
Bahamas +47 +2,323,341 +1,688,041
Panama +38 +2,081,693 +857,803
Marshall Islands +17 -390,023 -11,106
Italy +11 +698,233 +435,766
Hong Kong China +10 +549,241 +310,421
Barbados +3 +42,533 +24,655
Gibraltar +3 +46,086 +27,596
Jamaica +3 +101,515 +56,957
Dominica +2 +239,624 +134,616
Isle of Man ---- +480,561 +117,325
Liberia -2 +1,114,117 +365,151
Bermuda -3 -491,108 -252,274
Cayman Islands -5 -142,629 -96,246
Georgia -6 -63,828 -43,338
Saint Vincent & The Granadines -21 -376,813 -260,380
U.K. -24 -1,728,250 -1,112,879
Malta -56 -4,747,538 -2,711,589
Cyprus -91 -2,050,572 -1,485,884

After the Greek flag, with 969 ships of 67,091,894 DW in its register, Panama follows with 582 ships of 25,426,970 DW, Malta with 547 ships of 25, 991,850 DW and Cyprus with 411 ships of 21,009,260 DW. They are followed by the Bahamas with 232 of 11,426,319 DW, Liberia with 186 ships of 12,708,901 DW, the Marshall Islands with 118 ships of 7,016,465 DW and Saint Vincent and the Grenadines with 94 ships of 2,674,878 DW.

TABLE 2: Ship Type and Age Analysis – Greek Parent Companies

Comparing Table 2 with the corresponding table of the previous year (2004), the following are the more noticeable, increases/decreases of the Greek controlled fleet, by ship type, in number of ships and DW. The most marked decrease, continuing the trend of previous years, was in the number of general cargo ships, while bulk carriers and, despite the effects of the phasing-out, tankers continue to increase.

Type Ships Tons DW
Oil Tankers +9 +452,051
Chemical & Products Tankers +14 -774,902
Liquefied Gas Tankers +14 +423,930
Combination Carriers -1 +119,283
Ore & Bulk Carriers +39 +3,840,860
Containers -12 -470,619
Other Cargo Ships -80 -831,928
Passenger -9

338 ships were on the order books in March, 2005 against 256 ships in March, 2004 and following the trend shown above they were divided into the following categories: 78 oil tankers, 104 chemical & products tankers, 12 liquid gas carriers, 86 ore & bulk carriers, 24 pure container carriers, 23 cargo ships and 2 passenger ships.

TABLES 3 & 4: Ship Type and Age Analysis of the World Fleet and the Greek Fleet.

The percentage of each type of Greek controlled vessel, in relation to the world total number of vessels and their DW, of the corresponding type, for the years 2005 and 2004 was as follows:

Oil Tankers
Percentage of Number of Ships, 2005: 23.2
Percentage of Number of Ships 2004: 23.9
Percentage of Total DW 2005: 21.1
Percentage of Total DW 2004: 22.4

Chemical & Products Tankers
Percentage of Number of Ships, 2005: 8.2
Percentage of Number of Ships 2004: 8.5
Percentage of Total DW 2005: 12.9
Percentage of Total DW 2004: 15.3

Liquid Gas Carriers
Percentage of Number of Ships, 2005: 5.6
Percentage of Number of Ships 2004: 4.9
Percentage of Total DW 2005: 5.5
Percentage of Total DW 2004: 5.3

Combination Carriers
Percentage of Number of Ships, 2005: 18.0
Percentage of Number of Ships 2004: 17.0
Percentage of Total DW 2005: 20.3
Percentage of Total DW 2004: 17.4

Ore & Bulk Carriers
Percentage of Number of Ships, 2005: 21.6
Percentage of Number of Ships 2004: 22.9
Percentage of Total DW 2005: 22.7
Percentage of Total DW 2004: 24.6

Container Carriers
Percentage of Number of Ships, 2005: 4.2
Percentage of Number of Ships 2004: 5.2
Percentage of Total DW 2005: 4.5
Percentage of Total DW 2004: 5.8

Other Cargo Ships
Percentage of Number of Ships, 2005: 4.7
Percentage of Number of Ships 2004: 5.4
Percentage of Total DW 2005: 6.4
Percentage of Total DW 2004: 7.5

Passenger Ships
Percentage of Number of Ships, 2005: 7.3
Percentage of Number of Ships 2004: 7.8
Percentage of Total GT 2005: 6.2
Percentage of Total GT 2004: 7.6

Although a slight decrease was recorded, Greek controlled tonnage remained in first place globally. However, it has embarked on a renewal programme with a significant number of newbuilding orders and purchases of more modern vessels. In particular, the percentage of Greek controlled tonnage compared with the world fleet is as follows: Number of ships, 8.7% (9.1% in 2004), GT 14.1% (15.5% in 2004) and DW 16.5% (18% in 2004). Moreover, the presence of Greek owners is particularly significant in the categories of ships carrying the majority of the world’s bulk cargo, i.e. oil tankers and bulk carriers.

TABLES 5 & 6 : Average Age Analysis of Existing Ships owned by Greek Parent Companies and World Fleet

The average age of the Greek controlled vessels continued decreasing during the past year, now standing at 15.9 years, against 16.8 years in 2004, 17.4 years in 2003, 19.6 years in 2002 , 20.0 years in 2001 and 20.3 years in 2000 with a corresponding age decrease in in relation to DW and GT. In particular in terms of GT, the average age of Greek controlled vessels is now 11.9 years against 12.6 years 2004, 13.1 years in 2003, 15.9 years in 2002, 16.8 years in 2001 and 17.6 years in 2000. In terms of DW, it is now 11.5 years, against 12.2 years in 2004, 12.7 years in 2003, 15.6 in 2002, 16.6 years in 2001 and 17.4 years in 2000. The average age of the existing Greek flag ships, has also decreased, now standing at 11.6 years, against 12.7 years in 2004, in terms of ship numbers, 7.1 years, against 7.6 years in 2004 in terms of GT and 6.5 years, against 7.1 years in 2004, in terms of DW. The trend is most marked in oil tankers registered under the Greek flag, where the average age is well below the average age of the world oil tanker fleet, at a very youthful 6.1 years, in terms of ship numbers, 5.4 years in terms of GT and 5.3 years in terms of DW.

The average age of the world fleet, also decreased, but the gap with the average age of the Greek controlled ships continues to narrow. The average age of the world fleet, now stands at 15 years, against 15.5 years in 2004. In terms of GT it is now 10.1 years, against 10.6 years in 2004 and in terms of DW, it is now 9.7 years against 10.2 years in 2004.

TABLE 7: Class Analysis of Greek Parent Companies

The following 6 major IACS Classification Societies share the bulk of the Greek controlled fleet: Lloyd’s Register with 793 ships (883 ships in 2004), ABS with 565 ships (554 ships in 2004), NK with 468 (477 ships in 2004), DNV with 434 (416 ships in 2004), Bureau Veritas with 407 ships (372 ships in 2004), and GL with 193 ships (188 ships in 2004). Also, the Hellenic Register classes 140 ships.


123-t - November 11, 2005 05:39 PM (GMT)
QUOTE (mavrogenides @ Nov 10 2005, 11:48 PM)
These sources here say that the greek tanker fleet poses some 30% of the worlds tanker fleet...

The sources are Intertanko and Lloyd but could that justify the huge difference ?

123-t - November 15, 2005 03:43 PM (GMT)
Orders for new ships decline sharply over first three quarters
By Nikos Roussanoglou - Kathimerini

New ship orders appear to be losing steam in 2005, according to data for the year’s first nine months, as they reached just 45 ships and were worth a touch over $2 billion in combined worth.

With the months of August and September excepted, new orders remained in shallow waters throughout the year, on the back of four years of strong growth: The hundreds of ships Greeks ordered between 2001 and 2004 have been seeing delivery since the end of last year.

In 2004 alone, Greek shipowners ordered 135 new ships, worth a total of $5 billion. They had also maintained their option to extend orders for 30 new vessels in various shipyards around the world. Most of those options were used during 2005.

The reduction in new orders by Greek shipowners is attributed to a variety of factors. The lack of launching cradles is the main one, at least in the biggest and most reliable shipyards. This problem began emerging in 2004, when most major shipowners rushed to place new ship orders while they enjoyed good cash flow thanks to the rise of chartering rates to record levels in virtually every market.

Shipyards are fully booked and this obviously affects rates as well. Shipbuilding costs have risen sharply in the last couple of years, making this a costly choice for every shipowner. When the decision to order a new vessel must be made during a period of low rates, like today, owners are likely to opt not to order.

After all, shipowners have to anticipate the future course of the market where they intend to employ their new vessels ordered, given that most deliveries could stretch up to 2008 or even 2009 in some cases.

Shipyards, for their part, are suffering significant financial problems due to their inability to foretell shipbuilding costs. They sign contracts which, a year later, generate losses instead of profits, especially in periods of rising prices for raw materials such as steel.

During the summer shipyards tried to renegotiate terms in many new order contracts. Depending on the case, shipowners either show some understanding and accept higher prices, or send the case to courts of arbitration, aiming at compensation.

The situation for shipowners worsens further by the increasing unreliability by certain shipyards, mainly among those that lack a solid financial and entrepreneurial base, say market professionals.

In order to handle the current difficult situation without compromising the Greek fleet’s renewal process ongoing in recent years, many Greek companies are turning to specialized shipping niches, such as the increased number of orders for liquefied petrol gas (LPG) ships. The situation in those markets is less saturated, because of lower interest. For example, since the beginning of 2005 Greek interests have ordered at least 11 LPG ships.

These developments also point to rising confidence in dry-bulk vessels, which for the first time could overtake tankers among new ships. This is explained both by the strong prospects of the dry-bulk sector (thanks to China) and by the relative lagging in renewal of dry-cargo fleets.

Still, Greek activity in sales and purchases of old vessels partly offsets the drop in orders, as several companies make sure they renew their fleet by acquiring ships aged up to five years.

Finally, many shipping companies are finally receiving vessels they had originally ordered two or three years ago, which will allow them to cover their short-term as well as their long-term needs.

123-t - November 16, 2005 10:54 AM (GMT)
Shipowners are concerned over high-seas piracy
By Nikos Bardounias - Kathimerini

Piracy attacks on commercial ships continue to rise internationally, resulting in lost lives and great problems for the world’s shipping community.

Oceangoing shipping sources say insurance companies are in a particularly difficult position since estimates indicate they are forced to pay about $70 billion every year to compensate for piracy offenses resulting in lost lives, goods, ship equipment or the ships themselves.

The same sources note that the piracy attacks must be dealt with as seriously as terrorist attacks, since charter companies are charged much more for services because the insurance premiums for shipowners or managing companies are higher when the ships are chartered to carry cargo to areas considered dangerous for piracy.

During 2004, some 30 seamen lost their lives in 325 piracy incidents, while in 2003, 21 seamen died in 445 piracy attacks. As far as Greek-interest ships are concerned, nine of them were attacked last year — a decrease from 15 vessels attacked in 2003, according to official data.

International Maritime Organization (IMO) records show that the sea regions most prone to piracy attacks in 2004 were Indonesia, with 93 instances, and Nigeria, with 28 attacks. The seas around Brazil, Argentina and Panama also had problems.

“We believe that the extension of the ISPS code, for the protection of ports and installations from illegal activity, to the areas where many commercial ships sail and which are considered risky for piracy attacks could contribute decisively in their reduction, in the protection of seamen as well as in the normalization of chartering rates to the dangerous areas,” sources from the Union of Greek Shipowners (EEE) told Kathimerini.

Shipping and tourism

Tourism Minister Dimitris Avramopoulos met yesterday in London with the Hellenic Committee for Maritime Cooperation, which represents London-based shipowners. During the meeting, he called on shipowners to invest in Greek tourism and announced that next June’s international shipping exhibition Posidonia 2006 in Piraeus will open with a major event on shipping and tourism. Participation in the exhibition has already reached record levels both in countries and in companies.

The rise in tourism this year was also good news for Blue Star Maritime SA, whose group net profits recorded a 121 percent rise in the year’s first nine months compared with the same period in 2004, reaching 19.2 million euros from 8.7 million euros last year. The coastal shipping company profited from the rise in passengers and ships, which offset the reduction in services due to the sale of four old ferries.

123-t - November 26, 2005 02:38 PM (GMT)
Surge in world trade keeps Greek shipowners in the lead
The Greek-owned merchant navy was the largest in the world in both the number of ships and total capacity at the beginning of 2005, according to the latest report of the United Nations Conference on Trade and Development (UNCTAD), “Review of Maritime Transport 2005.”

Greek-owned vessels numbered 2,984 — of which only 739 flew the country’s flag — accounting for 18.48 percent of global capacity. The Japanese-owned fleet was the second largest, numbering 2,945 vessels and representing 14.01 percent of global capacity, while Germany’s was third with 2,615 ships and 6.9 percent of total capacity.

Of the total capacity of 54,642,000 dwt of the Greek-flagged fleet, 31,035,000 dwt was accounted for by tankers, 20,468,000 dwt by bulk carriers, 2,237,000 dwt by container ships and 494,000 dwt by general cargo vessels.

According to the UNCTAD report, the global sea trade grew 4.3 percent in 2004 and is expected to register a similar rise this year. Tugged by the rapidly growing economies of developing nations, particularly China, and their need for raw materials, as well as their swelling export sectors, global sea trade totaled 6.76 billion metric tons last year. Global production rose 4.1 percent in 2004 — the highest rate in a decade — while the volume of world exports grew 13 percent (from 6 percent in 2003).

New orders, listings

On the back of this global surge in world trade, Greek shipowners witnessed an especially satisfactory growth in their business, and many of them ordered new ships and sought to fund the expansion of their companies through stock market listings, particularly in New York.

Freight rates continued rising last year and have done so in 2005, particularly for tankers and bulk carriers. Tanker transports rose 4.2 percent in number, while those for iron were up 12.6 percent and for coal, wheat and bauxite 5 percent.

Developing countries saw their share in the global transport fleet grow to 22.6 percent from 21.2 percent in 2003. Ships registered in Asian countries represent 17.4 percent of world tonnage, against 27 percent of developed nations. The global fleet grew 4.5 percent, reaching 895,800,000 dwt at the beginning of 2005. Newly delivered vessels totaled 49,400,000 dwt, while withdrawals and losses were 10,600,000 dwt.

Tankers and bulk carriers grew by 6.1 and 4.2 percent in capacity respectively and represented 73.3 percent of the global total. The international container fleet increased 8.4 percent to a total of 98,100,000 dwt. The total capacity of liquefied gas carriers reached 22,500,000 dwt.

The average age of the global merchant fleet in 2004 was 12.3 years, with 27.3 percent being over 20 years. Container ships are the youngest, with an average age of 9.4 years.

123-t - December 3, 2005 03:28 PM (GMT)
Taking pride in shipping
By Dimitris Kapranos - Kathimerini

With Greece the global leader in shipping, the election of a Greek as the head of the United Nations’ shipping branch, the International Maritime Organization (IMO), capped the progress this country has enjoyed in the sector.

Efthymios Mitropoulos, the general secretary of the IMO, spoke to Kathimerini about the industry, its image, naval education and legislation, and how Greeks perceive shipping these days.

People have a negative view of shipping. Why is that and how can it be corrected?

Ships are the cheapest and safest, along with airplanes, means of transportation, with safety records improving year after year, not to mention shipping’s ability to transport incomparably bigger quantities of cargo. The average age of fleets is constantly decreasing, while the portion of sea pollution from shipping activity (ranging between 12 and 15 percent of all polluting factors) is also dropping.

Yet people do have a generally negative view of us, quite unfairly. This is due to the wrong perception that the shipping industry is selfish and indifferent, caring very little about the environment. Unfortunately this is fed by some politicians who seek votes without looking into the peculiarities of the shipping industry and instead of supporting shipping when in office, turn against it every time an accident happens, considering shipping an easier target than agriculture, industry or other sea polluters.

Another factor behind shipping’s negative image is the media, which are indifferent to the productive aspect of shipping but are always quick to dramatize every shipping accident, as this obviously increases their audience.

In Greece, too, our global leadership is not promoted, though it should to make us all proud. Maybe Greek opinion makers (politicians and the media) should see how global shipping’s heads respect Greek shipping and learn the truth: that without maritime transport the world’s financial system would crumble. We Greeks have to embrace and support everything related to shipping.

Of course, we need to take measures for the prevention of accidents. First we should find, marginalize and eliminate every substandard element that contributes to causing maritime accidents.

Do national or regional regulations create a hostile environment for shipping? If so, how can this be dealt with?

Every international transport vessel has to adhere fully to all regulations and requirements of the international agreements its country has signed. Unilateral or regional regulations, if imposed on other countries’ ships, create serious problems, such as hurting the global character of international maritime transport, creating discrimination against other regions and harming the supplying of other industries. They also undermine the IMO’s authority and create confusion in shipping about which safety and environment protection regulations apply where, to which ships and when. Other regions may also feel they must create their own unilateral measures if they disagree with the IMO and so on.

Handling this problem may seem hard but is actually simple: Follow the theory that as maritime transport is international, shipping beyond national waters must have global regulations for the protection of human life and the sea environment. Only the IMO has the authority to introduce and adopt such regulations on a global scale and from this basic position no one should depart, regardless how strong they feel.

Political purposes

Often technical issues in shipping are handled by politicians and diplomats who lack the knowledge and experience required but are swayed by national political agendas. What can be done about that?

This trend is true. Our organization, created to regulate technical shipping issues that touch on safety and sea environment protection from pollution by ships, has recently been forced to discuss economic and political matters, too, due to issues such as single-hull tanker withdrawal, determining places of refuge, etc.

On the other hand, every unbiased observer must concede that some technical matters do have economic and political aspects which also have to be addressed.

I would recommend that all this be examined by experts from all sides (financial, political, technical and diplomatic) under the coordination of the shipping bodies, and (unless there is national security involved) that national policies be drafted with shipping interests in mind.

Shipping is probably the biggest industry on a global level but lacks a single and continuous presence and voice. Its positions and demands are hardly listened to at international forums. What is your response to this?

I do not agree there is no single and continuous presence and voice, but I must agree that shipping is not listened to as much as it deserves. My conclusion from my long experience with international shipping organizations (and not just the IMO) is that shipping has both a continuous presence and one voice when there is agreement on the matters that involve it.

That is not the point, however. The point is the priorities chosen as most important in forums where political decisions are made that have reverberations on shipping, where negotiations are made with political consequences or where trade-offs shape policies to protect certain productive activities (e.g. agriculture, fishing, industry) by sacrificing others (including shipping). I find this unfair and exceptionally dangerous.

This is why I have repeatedly stressed that the respective policy of the countries involved ought to be supportive, promoting the interests and solving problems, while expressing appropriate care for sea environment, instead of focusing exclusively on environmental protection and ignoring shipping completely. Or, in other instances, having shipping as the easy scapegoat for the sake of other political purposes. Countries must then consider what they have to lose if they do away with their shipping.

Should naval education be technical/professional or mainly academic?

The easy answer to that is that since naval education is generally meant for producing staff for a technical profession, then it should be plainly technical/professional. However I believe creating such a model for every country would be risky. Policy factors vary from country to country, so any doctrines on that would fail.

In my view, a guideline for governments making such decisions should be finding a solution that best serves the country’s general shipping interests and not that of individuals, irrespective of the political cost this may entail. In this sense I look forward to the measures for the “radical upgrade of studies and the status of state naval education while allowing the private sector [to be involved] in seamen’s training,” as Merchant Marine Ministry General Secretary Yiannis Ioannos has recently said.

The sea labor market is supplied by countries such as the Philippines, Eastern Europe and Russia, while in the major sea forces there is a deficit of national crews, and mainly officers. In Greece this is particularly acute. How can it be solved and what can the state do?

This is more complex that it seems, so I cannot offer any simple solutions. It is due to many factors, such as the country’s tourism growth, the industrialization of regions that used to rely on sea professions, new jobs in modern domains, and more.

It hurts me to hear that traditional seafaring communities, including Galaxidi, where my roots lie, are seeing their youngsters turn away from maritime professions. This does not mean we should halt our efforts to attract young people to the sea. We must always bear in mind what [deceased shipping magnate] Yiannis Hadzipateras said: “Greek crews are the soul of Greek ships.”

Perhaps in this campaign we ought to start with inspiring pride in the sea professions. High salaries are nice, but one should also feel proud of one’s job.

123-t - December 12, 2005 12:52 PM (GMT)
Listed Greek shipping companies continue vessel-shopping spree
By Nikos Roussanoglou - Kathimerini

Greek shipowners are continuing their investment activity this year at the same rate, as their presence on the acquisition list remains strong. However, unlike previous years, listed shipping companies — led by the New York-listed firms and those about to be listed — have high activity to show for 2005.

Unofficial data by ship brokers from the start of the year until the end of October show some 1,150 ships have changed hands. About 20 percent of that, or 250 vessels, is estimated to have been acquired by Greek interests.

Crucially, some 60 ships, or about 25 percent of Greek acquisitions, were made by listed or about-to-be-listed companies. The amount invested reaches up to $2.5 billion (according to estimates by the TradeWinds publication).

The reasons for this are obvious: These companies draw capital from the stock markets in order to fund the purchase of ships and, to a lesser extent, to order new vessels — which, under the current conditions, goes against financial reason. This way, disposable cash is immediately used, directed toward acquiring used ships. A glance at the investment programs of companies expecting to be listed is enough to show that the main objective for managers is expanding their fleet.

A case in point is Top Tankers, owned by Evangelos Pistiolis, which has acquired nine ships since the start of the year, bringing its fleet to 27 vessels. The company’s most recent move was the purchase of three Suezmax tankers from First Olsen for $180 million. Delivery is expected to be completed by the end of this week.

Two months ago Top Tankers also acquired Minerva Symphony and Minerva Marine. Its investments from the beginning of 2005 are calculated at $457 million. Certainly, some of this has come from bank loans. Note here that the company’s board has postponed its expansion to the dry-bulk market, canceling in late May the acquisition deal for 15 bulk carriers from the Nomikos family.

Dryships, owned by Giorgos Economou, has invested a similar amount — some $460 million — to buy nine bulk carrier ships. The company entered the Nasdaq stock market in New York in early 2005. Excel Maritime, one of the oldest Greek presences on the New York stock market, is said to have bought a total of 10 ships for $570 million. Quintana Maritime, owned by Stamatis Molaris and listed this fall, has bought all its 10-ship fleet this year, investing about $467 million.

As shipbroking companies note, most of the capital raised this year has been channeled to bulk carrier ships, which is justified by the bigger emphasis placed on tankers in previous years.

Listed companies may have been particularly active this year in expanding their fleet, but this has come at a price: All companies which acquired vessels due to their public listing had to face the automatic overvaluations of ships, paying amounts that were at least 5 percent higher because of that. For example, for a ship valued at $21.5 million its total cost could rise to $24.5 million through higher commissions and other factors if it is for a company preparing to enter a stock market.

The great demand for bulk carrier ships has led the prices of used ones to high levels. This has rendered many Greek shipowners with ambitions to expand their fleets reluctantly, despite their increased liquidity thanks to high profits in the last couple of years.

Nevertheless, many analysts do not rule out fresh moves in the short term, as the stocks of listed shipping companies have declined, while the supply of ships for sale is gradually increasing. Similarly, the tankers’ market prices remain high; there may be fewer candidate buyers, but many shipowners appear reluctant to sell.

123-t - December 21, 2005 01:40 PM (GMT)
Greece to create maritime service cluster and improve sea training
By Nikos Bardounias - Kathimerini

The government is planning to set up a maritime services cluster and aims at high-standard training for shipping professionals, so that more and more shipowners can raise the Greek flag and list as many ships as possible on the country’s register.

The Special Secretariat for Competitiveness, consisting of officials from the ministries of Economy, Development and Merchant Marine, proposed in a recent report a set of internationally competitive shipping services, such as developing banking, financial and ship brokerage services, shipping insurances, ship management services, construction, repairs, refits and ship maintenance, crew management services and shipowners’ support services for alternative investments and port infrastructures.

In its report, the secretariat also highlights the positive and negative aspects of Greek shipping. The pros include the 4,000 vessels of Greek shipowners, the maritime tradition, the country’s geographical location and its central position along the maritime axis linking Europe with the Middle East and Asia, as well as the lower costs than at other competitive shipping centers like London, New York and Oslo.

The cons of Greek shipping are the often extreme unionism and the inflexible labor laws, the state bureaucracy and the lack of proper infrastructure, qualified staff and experience in maritime clusters.

The aims stated in the report include increasing the Greek oceangoing fleet’s global share of the market to over 25 percent, offering incentives for raising the Greek flag, raising employment and job quality and convincing Greek shipowners to invest their available capital, possibly over $200 billion, in more sectors of the Greek economy than just shipping.

123-t - December 22, 2005 12:22 PM (GMT)
Shipowners have a busy year
IPOs, ship acquisitions are evidence that the Greek-owned maritime sector retains its momentum
By Nikos Roussanoglou - Kathimerini

Greek-owned maritime companies have been quite active lately, confirming the fact that this year will be another good year for shipping.

Last Friday, a small bulk-cargo company, Free Seas, was listed on New York's NASDAQ at a time when larger Greek-owned companies, such as Golden Energy and Capital Maritime, did not dare to take the step due to adverse market conditions. Free Seas is owned by well-known shipowners Giorgos and Stathis Gourdomichalis and Ion Varouxakis.

(Capital Maritime, another dry-bulk cargo company, which was to offer 16.7 million shares with Goldman Sachs and Bear Stearns among its underwriters, canceled its IPO in late June. Capital Maritime's unwillingness to price shares at a discount to its price range of $14 to $16 per share because of the company's «built-in growth potential, strong balance sheet and belief in the future of the product tanker market» were said to be the reasons for the withdrawal).

Free Seas accelerated its listing by using the frequently applied (in the US, at least) method of the stock market vehicle, that is, an already listed company that is no longer active. In this case, it was Trinity Partners Acquisition, whose merger with First Seas was completed last Friday. First Seas controls three handymax ships, Free Destiny, Free Envoy and Free Fighter, all 21-23 years old.

Moves are not confined to the stock market, according to the sector's publication TradeWinds. Recently, A.M. Nomicos sold two 135,000-ton ships (Capesize), the Atlas and Olympia, 15 and 16 years old, respectively, to Stamford Navigation, another Greek-owned company, as part of the strategy, which it began to implement two years old, to slowly sell off its older ships in order to take advantage of higher market prices for these ships. This strategy was to be consummated with the acquisition of 15 cargo ships by Top Tankers, a listed firm owned by Evangelos Pistiolis. Top Tankers was to pay $420 million for the acquisition by offering shares to the public, but the company's board balked at a third public offer so soon after the first two and canceled the deal. Nomicos is now forced to sell its old ships piecemeal, but market conditions are not so favorable: According to market insiders, the two ships sold to Stamford Navigation are worth $27 million, whereas three months ago they could have fetched $36 million.

At present, A.M. Nomicos controls 13 ships, and awaits delivery of two more, at 48-50,000 tons each, from Japanese shipyard IHI Marine United, early next year. Stamford Navigation now controls 22 ships, having been very active recently in the used ships market. Still, it, too, had sold two cargo ships, 149,000 and 45,000 tons, respectively, two months ago for $60 million

123-t - December 29, 2005 08:25 PM (GMT)
Shipowners find the right chemistry in their cargo
Chemical products market sails ahead thanks to Chinese demand

Greek shipowners have recently begun investing in ships carrying chemical products and oil derivatives, broadening the variety of products they carry. They have China to thank for that expansion, as that country is the main reason oceangoing shipping is blooming in all product niches.

For decades, Greek companies used to invest in tankers for the transport of crude oil and, to a lesser extent, in bulkers and container ships. Needs have now grown and Greek shipowners are rushing to specialize in chemical products’ shipping, as this market is one of the most rapidly expanding.

The need to specialize is confirmed by a recent survey on chemical products’ shipping by DVB bank. According to the shipping publication TradeWinds, the survey found that demand for such ships will remain at high levels in the near future, although orders outstanding at shipyards come to 32 percent of the existing fleet.

In 2006 and 2007, 409 new ships will be delivered, which will temporarily reduce chartering costs. Yet from 2008, the ratio of supply and demand will switch in favor of shipowners due to the huge growth in the chemicals trade: It is set to grow by 6.3 percent every year until 2009, which translates into needs of 6.6 million tons annually.

That rise is mainly due to the massive needs of China, which from 2000 to the end of 2004 doubled its imports of organic chemical products of oil, from 6.5 million tons to 13.2 million tons. More than 60 percent of China’s supplies come from Japan and other Southeast Asian countries. The picture is similar in inorganic chemical products, the category that includes sulfuric and phosphoric acid.

With 16.9 million tons shipped this year, China accounts for 64 percent of the global rise in demand in the last five years, quadrupling its imports from 440,000 tons in 2000 to 1.78 million tons last year. However, the development of production units will allow China to reduce such imports in the future. As for vegetable oils and animal fats, their rise in the last five years is about 39 percent. In the 2005-6 period, China will import an estimated 8.1 million tons of these products. Yet a big demand for such products is being seen in India, too, as well as in EU countries due to the rise of biofuels. Imports by EU states will reach 8.4 million tons in the same period, up by 25.6 percent annually.

This heavy reliance on the Chinese economy exposes shipping to a great risk, but investing in it seems worth it. Drewry Shipping suggests new ship orders have risen from 100 units in 2000 to 449 in 2005. Some 220 vessels fall into the 10,000-20,000-dwt category, which will cover rising needs on local and regional levels. This equals 52 percent of the existing 433 ships. In bigger categories — over 30,000 dwt — deliveries are expected equal 35 percent of today’s fleet. During 2005, new orders for this kind of ship dropped to 137 from 311 in 2004. Among the Greek companies in the market, Golden Energy of the Restis group stands out. According to data by the Moundreas firm, in early November Evalend Shipping ordered four chemical products ships with an option for another four. Prime Maritime, another Greek company, ordered four tankers of 75,000 dwt each to carry oil derivatives, for $49.5 million.

123-t - December 30, 2005 10:08 AM (GMT)
London Stock Exchange no match for Nasdaq in attracting shipping firms
By Nikos Roussanoglou - Kathimerini

Recent developments have put an end to the hopes of those who expected that the London Stock Exchange (LSE) would be able to rival New York’s Nasdaq index in attracting shipping companies.

A few weeks ago, a series of positive signs had actually given London the chance to become a European match for the Nasdaq, as Greek shipping company Goldenport Holdings filed an application to be listed on the LSE. As the industry publication TradeWinds previously noted, was this listing to prove successful many more would not hesitate to follow suit, particularly from the Greek shipping community.

In practice, however, it was proven that institutional investors in Europe are not yet ready to place their capital in shipping. Goldenport Holdings, which belongs to the Dragnis family, has not managed to gather the interest expected, and has opted not to proceed with its public listing. After all, its share price came to levels that were far below those anticipated.

This development surprised certain analysts who had thought the climate had now changed and that London could again become the “steam engine” of international shipping.

Goldenport itself cited three reasons why it had chosen London instead of New York: It was recommended by investment banks, such as HSBC; the firm’s management was more familiar with London due to its proximity (it is based in Athens), and London remains one of the most important centers of the global shipping community, with a multitude of ship-brokerage agencies.

Many people were optimistic about the potential of the LSE to attract shipping companies, as they believed there was no particular reason for the US market to head the world’s stock and bond markets. Sure, some of the biggest institutional investors are based in the USA, but this does not mean that Europe is deprived of investment funds. For instance, pension funds have in recent years developed strong outward-looking activity, placing capital in many EU countries (mainly in stocks, bonds and properties), not to mention the various investment funds, such as hedge funds. Nevertheless, from the start of the year only the eight Greek shipping companies listed on the New York Stock Exchange have drawn more than $1.5 billion.

Additionally, the recent attempt by more and more shipping companies (including several Greek ones) to enter the Nasdaq market has created a feeling of saturation among investors on the other side of the Atlantic, leading many companies to postpone or cancel their plans due to low interest by investors. The most recent Greek “victims” were Golden Energy (of the Restis group) and Capital Maritime.

All this meant that conditions for the rise of the LSE were ideal, especially since a new market was set up, the Alternative Investment Market (AIM), aimed at attracting smaller shipping companies. This temporarily appeared successful as it offers advantages such as laxer regulations, no obligation for companies to present their activity for three consecutive years and lower public listing costs. Certainly after the failure of Goldenport, any theoretical interest reportedly expressed by Greek shipping companies is now history.

London is a stock market where, with the exceptions of P&O of the James Fischer group (with interests in other markets besides shipping) and the small Go Carriers, no other shipping company is listed, so Goldenport would have been a pioneer. The paradox in Goldenport’s case is that even up to the very last minute and after some 150 presentations to investors and analysts in England, Scotland, France and Germany, the messages for the company’s listing were especially positive.

According to analysts, what seems to have turned investors away was the company’s attempt to list two aspects of its activity, combining its bulker fleet with that of container ships. This element has apparently caused confusion, as has been noted in New York with similar efforts by other companies.

Another problem was the average vessel age (23 years), yet there were also many positive features, like the owners’ commitment it would not sell shares until after nine months of its stock’s trading, its successful and profitable activity and its moderate attitude, since it was only asking for no more than 80 million pounds for the renewal of its fleet.

123-t - January 19, 2006 02:10 PM (GMT)
Ship orders rebound
Orders for new ships by Greek companies are bouncing back after a considerable decline in 2005. The Handris family recently has invested about $260 million in ordering two aframax tankers of 115,000 deadweight tons (dwt) from the Korean shipyard of Samsung Heavy Industries.

Each tanker is expected to cost some $65 million, while if the option for two more ships is exercised, the sum will reach the amount mentioned above. The ships are to be delivered by the end of 2008.

Shipbrokers consider the price quite high, quoting data by Clarkson, according to which a newly built tanker to carry crude oil costs about $58.5 million.

The Handris family today owns four modern aframax category oil-carrying tankers, constructed by Daewoo; it also expects another two such ships within the year, ordered in 2003 at $41 million each.

Last February, the Handris family sold for scrapping the last of its aged tankers, named Zeinat (constructed in 1976), with a capacity of 81,000 dwt. In April 2005, it acquired the tanker Ist, 82,000 dwt, built in 1986, for $16.75 million. That vessel was renamed Zeinat 2 and operates in the Egyptian market under the Egyptian flag.

Modern aframaxes can bring shipping companies huge earnings, and this is illustrated by the recent five-year chartering deal for a ship belonging to the Greek company Samos Steamship: Ambrosia is a 105,000-dwt vessel to be delivered this summer by the Japanese Sumitomo shipyard. Korea’s Hyundai Merchant Marine has chartered it for $27,300 per day, which translates into $49 million for the entire five years. The ship was ordered in 2003, costing just $36 million.

Separately, the president of the Hellenic Association of Merchant Marine Captains (PEPEN), Evangelos Kouzilos, called yesterday for a national shipping policy that will allow Greece’s strength in the global shipping market to be capitalized on for the country’s economy. He said shipping is virtually the only activity for which Greece is well known and respected around the world.

“Besides shipowners, captains have played a significant role in making Greek shipping an international force,” which serves 25 percent of the world’s sea trade with the Greek-owned fleet’s 3,800 ships, Kouzilos said. “Therefore captains should stop being viewed as scapegoats when accidents happen at sea,” he stressed.

123-t - January 21, 2006 12:49 PM (GMT)
Expansion of shipowners’ fleets will drive profits down
Slower global economic growth will affect dry cargo sector, report claims
By Costis Papadimitriou - Kathimerini

The expansion of the global fleet with the addition of newly built ships is set to bring shipping profits down in 2006, according to US bank Citigroup, which titles its relevant report “Sailing in Unchartered Waters.”

“We believe that 2006 will be the last year of profits for tankers as we expect that in 2007 freight rates will fall below the cycle’s average,” Citigroup suggests.

The amount of capacity in proportion to chartering will increase more than 6 percent both in tankers and in dry bulk vessels as a result of both the impressive orders and the lack of ships sent for scrapping.

Although international trade keeps expanding, Citigroup expects less demand for maritime transport in 2006 as it sees no significant rise in oil exports from OPEC countries, which concerns tankers, while slower global economic development will negatively affect the dry cargo market.

Last year was the first of the current cycle in which the shipping market has shown a drop in earnings. “We expect a further decline in average chartering rates by 30 to 40 percent within 2006, while prices of assets (i.e. ships) will have to continue to slide due to the lower returns on investments, according to the bank’s analyst John Kartsonas, who adds that this will have a negative impact on the stock of listed shipping companies.

He also believes that the decline in rates will continue into the first half of 2007. In the long term, he explains, the preference by shipyards for the construction of tankers or bulkers against other types of vessels will constitute a key factor in the future balance of supply and demand in chartering and therefore in the progress of the shipping business cycle.

As another amazing year for shipping has just gone, Kartsonas wonders whether a corrective swing has taken place in the sector that will allow shipowners to maintain their pricing power by surpassing the fundamental powers of supply and demand.

“The recent sales of used ships at historically high prices leave us with many questions, as it is hard to believe that the market expects the picture to improve in terms of fundamental figures just when orders for new ships are almost at 25 percent of the existing fleet,” says Kartsonas and notes that stock markets do not seem to sail along accordingly since the Bloomberg index for tankers declined by about 5 percent in 2005 due to a drop in chartering rates and in earnings compared to the year before.

Kartsonas further observes that the big premiums in relation to the net asset value (NAV) with which shipping stocks played in 2004 have now vanished. In some cases there even is a discount on NAV which reflects, he says, the expectations of the market for a further drop in ships’ prices.

Nevertheless, notes the Citigroup analyst, last year had two significant developments regarding the status of shipping companies on stock markets. The first was the large number of shipping firm listings with a public offering and the view among investors that shipping is an important stock domain which has cash flow and the depth to stay on the investors’ monitors even in a downward phase.

The second was that investors seem to have changed their attitudes to shipping, as stock prices in the sector proved more resistant than the drop in earnings would suggest. In other words, the price per earnings (P/E) ratio has increased, and is beginning to correlate with other sections of the energy market.

More tankers

Kartsonas expects the tanker fleet to swell by a total of 59 million dead weight tons (dwt) in 2006 and 2007, while the scrapyards will receive ships with a combined capacity of only 11 million dwt in the next couple of years. The greatest increase in ships will be in oil-product carrying vessels, as opposed to crude oil tankers.

For 2006 alone, the rise in capacity will reach 6.5 percent. In comparison, demand will only rise by 1.6 percent. Therefore the impact on prices will be significant, Citigroup suggests.

It expects the VLCC category, of very large crude-oil tankers, to see its freight rates drop from $64,337 in 2005 to $42,000 in 2006 and to $29,000 in 2007. In the Suezmax category, it foresees a decline from $52,060 in 2005 to $30,000 and $23,000 in 2006 and 2007 respectively and the Aframax category to fall from $41,146 last year to $24,000 this year and $19,000 next year. Finally, Panamax rates will go down from $38,370 in 2005 to $20,000 in 2006 and $17,000 in 2007.

Those rates for 2006 are much more pessimistic than those given by the time charter market and the forward rate market as well as those of most market analysts. Yet the Citigroup report does note that its rates are higher than the historic average of the 15-year cycle.

True, Citigroup’s forecasts proved correct at the end of 2004 for daily rates of VLCCs (just 1 percent off the Citigroup forecast), while in the Suezmax and Aframax categories, rates went 29 and 35 percent higher, respectively, than the bank’s estimates.

Forecasts for bulk carriers are similar, as ships of a total capacity of 56 million dwt are expected to join the global fleet in 2006 and 2007. No more than 7.5 million dwt will be the combined capacity of the ships to be scrapped in the same period. The annual rise in capacity is forecast at 6 percent and that of demand at 3.1 percent. Citigroup expects the drop in rates to reach 30 to 40 percent in dry bulk ships, too.

Having explained these predictions, the Citigroup analyst warned that “charterers will try to recoup the huge sums they wasted in previous years in order to secure the shipment of their products.”

Mystik - January 23, 2006 05:43 PM (GMT)

(Investing in Companies in Greece)

According to an article by the Economist, Greece, a country of some 11 million people, controls nearly 20% of the world's merchant fleet by tonnage. The Greeks specialize in oil tankers and carriers that transport bulk commodities.

According to Martin Stopford, an economist with Clarksons, the world's largest shipbroker, the secret of the Greek success is not, as you might expect, that Greeks are good at running ships. They leave the grind of finding cargoes to specialists: they excel, instead, at managing risk. The Greek shipping fortunes are based on buying ships cheaply and selling them dear. They have an impressive record of spotting the tops and bottoms of the market.

Therefore, it would be natural to invest in where the Greeks have comparative advantage: the shipping or cargo industry in Greece. Below are some of the Greek Stocks listed in the United States:

Tsakos Energy Navigation (NYSE: TNP) - Tsakos Energy Navigation Limited is a provider of international seaborne crude oil and petroleum product transportation services. The Company owns a fleet of modern tankers providing worldwide marine transportation services for national, major and other independent oil companies and refiners under long, medium and short-term charters. Its fleet consists of 27 tankers, including three chartered-in vessels, of which two are very large crude carrier (VLCC) tankers, four are Suezmax tankers, 10 are Aframax tankers, seven are Panamax tankers and four are Handysize product carriers. The fleet totals 2.9 million dwt (dead-weight tons) and is less than 10% single-hulled as measured by dwt. In addition to the vessels operating in its fleet, the Company has contracted for the building of additional 13 vessels and has signed a letter of intent for two further vessels.

Stelmar Shipping Ltd (NYSE: SJH) - Stelmar Shipping Ltd. is an international tanker company that is developing its fleet with a primary focus on Handymax tankers, which transport refined petroleum products, and Panamax tankers, which transport crude oil. As of December 2003, Stelmar owned and operated its fleet of 31 tankers, including two leased Aframax tankers with a total cargo-carrying capacity of 1,791,490 deadweight tons (dwt), which include 18 Handymax tankers, nine Panamax tankers and four Aframax tankers. As part of the Company's fleet growth and renewal program, during the year ended December 31, 2003, Stelmar received delivery of the first newbuilding in a series of 11 new vessels to be delivered in 2004. Two 2004-built, double-hull Panamax vessels, the Cabo Sounion and the Reymar, and three 2004-built, double-hull Handymax vessels, the Alcmar, the Alcesmar and the Andromar, were received from January 2004, through March 2004.

Original Article from the Economist:

On the crest of a wave?

Jul 22nd 2004 | ATHENS AND LONDON
From The Economist print edition

Things have been so good in the bulk-shipping market that it is hard to believe they can stay that way

BY THE pool, overlooking the wine-dark waters of the Aegean, the champagne flowed as the cream of the world's shipping industry gathered to watch the fireworks at one of many lavish parties thrown during Posidonia, a recent trade show. Thanks to the greatest boom the industry has seen since the closure of the Suez Canal in 1967, the mood was buoyant. But strong winds blew ash from the fireworks on to the guests, driving the many women in low-cut dresses to shelter under the jackets of obliging males.

No sooner was the party over than it seemed that the industry itself might have to run for cover, as the price bubble that had seen bulk-shipping rates more than double since September 2003 suddenly lost air. Fears of a slowdown in China's economy, and a temporary ban on its imports of soya from Brazil, halved the Baltic dry-cargo index, which covers bulk-cargo rates on the world's 23 busiest sea routes. Rates have since recovered somewhat (see chart), but worries abound that a more fundamental correction in rates may be coming soon.

Now is clearly a moment to keep a close eye on the behaviour of the Greeks, who—despite departures from the business of the heirs of Aristotle Onassis and, late last year, those of Stavros Niarchos—remain the savviest in the industry. Greece, a country of some 11m people, controls by far the biggest share—nearly 20%—of the world's merchant fleet by tonnage, even if many Greek ships fly flags of convenience. The Greeks specialise in oil tankers and carriers that transport bulk commodities.

According to Martin Stopford, an economist with Clarksons, the world's largest shipbroker, the secret of the Greek success is not, as you might expect, that Greeks are good at running ships. They leave the grind of finding cargoes to specialists: they excel, instead, at managing risk. The Greek shipping fortunes are based on buying ships cheaply and selling them dear. They have an impressive record of spotting the tops and bottoms of the market.

Foolishness to the Greeks

That is in sharp contrast to certain other perennial investors in shipping: on the waterfront of Piraeus, where owners and their agents mingle, they say that, while God gave the Saudi Arabians oil, he fortunately gave the Greeks the Norwegians. Needless to say, Norwegians disagree. After all, the world's largest tanker owner is a Norwegian company. Nor is it just Norwegians who are the fall guys. The price of second-hand bulk carriers started to fall this spring as freight rates declined, catching out some firms. On July 21st, Jinhui, a Chinese shipping company listed in, er, Oslo, issued a profit warning for precisely that reason.

Greeks buy and sell ships far more often than others in the industry. Naftiliaki, a trade magazine, says that of 535 ship trades from January until mid-May 2004, 264 involved Greeks. Most of the 733 Greek shipowning firms are small, with only a few ships. But the industry is consolidating fast—which may limit the ability of firms to time the market so well in future (at investment vehicles such as hedge funds, bigger generally means worse). The 46 largest Greek shipping firms now control 70% of the fleet. Although the fleet has grown, the number of firms is down by 25% since 1998.

The past few years have also seen the emergence of the publicly-traded Greek shipping company, an idea that would have been anathema to the likes of Onassis and Niarchos, who had little time for the transparency or accountability involved in being public. It is still a comparatively limited phenomenon, but it involves some big companies. For instance, Tsakos Energy Navigation (TEN), a subsidiary of the second-largest Greek shipowning firm, is listed on the New York Stock Exchange.

Soon there may be many more, combining the trends of listing and consolidation, and increasing internationalisation—signs, perhaps, that the Greeks think the market is near a top. Another Greek shipping line already listed in New York is Stelmar, founded by Stelios Haji-Ioannou (of easyJet airline fame), and floated in 2001. This week it reported second-quarter profits that had swelled to $15.8m from $4.5m in the same period in 2003.

Mr Haji-Ioannou, who with his family owns 27% of Stelmar, is attacking its board for not letting shareholders consider a couple of takeover approaches. One is from OMI, an American shipping firm listed in New York; the other is from the GEM group, owned by the Greek Restis family and rumoured to be seeking a listing in New York. Argonaftis, the first shipping firm to float on the Athens stock exchange, announced in February that it would also get a New York listing.

The urge to go public has been accompanied by a move into market niches; TEN, for instance, signed a $170m contract to buy a liquefied natural gas carrier (LNG) in early June—a sector that the Greeks have historically steered clear of, but which is now starting to boom. Because the LNG trade is expected to grow significantly in the next decade, many more ships are being built. This is a niche once dominated by energy groups themselves and shipping companies from big oil-importing countries such as Japan: now everybody is piling in, perhaps over-enthusiastically.

As well as becoming more diversified, risks are also being managed by making the Greek fleet younger (and thus in better condition)—the average age of a Greek ship is now 16.8 years, down from a bit over 20 years in 2000. But the Greeks, who traditionally trade only second-hand ships, have now placed orders for new vessels, taking them into new risk territory.

One side-effect of the increase in transparency has been to attract more outside investors into the industry. Traditionally, shipping finance came from plain vanilla bank loans, secured against ships. Bankers such as Royal Bank of Scotland are still prominent on the Piraeus waterfront, but new sources of finance are emerging. Financial instruments, such as asset-backed securities, are increasingly popular, especially in Germany, where investors (chasing a local tax break) have a lamentable habit of entering a market just as it becomes a bubble. According to Lloyd's Shipping Economist, such new sources now account for 60% of global ship-financing.

The most dramatic growth has been in shipping futures, which allow shipping companies to lay off risks. The most popular futures are forward freight agreements (FFAs) to deliver goods on a particular route at some point in the future. They have grown, in the past year, to be roughly the size of the physical market, according to Bill Lines of the Baltic Exchange, a shipping bazaar in London that sells FFAs. Many in the industry have been suspicious of such futures, because they have been averse to hedging their bets—risk-taking is, after all, part of the game—and averse to complicated financial instruments that they do not really understand.

But, says Mr Lines, the desire of outsiders to get into a booming ship industry has fed the growth of futures. In September 2003, the Baltic Exchange launched a “paper ships” index, which trades on the future cost of ships themselves, rather than future freight rates and, this autumn, they plan to launch a “demolition assessment” index, which will trade on the future scrap value of ships. The International Maritime Exchange, in Oslo, a competitor, estimates that the futures market will grow by another 80% by the end of 2004.

More use of hedging should, in theory, reduce the volatility of shipping rates, and thus mean smaller swings between market peaks and troughs. That would limit the ability of Greek investors to make a killing by timing their purchases and sales. On the other hand, they will see opportunity aplenty in the rush of new, inexperienced money into the industry—especially if they suspect that prices could once again crash. Beware Greeks bearing ships?

Seems that Chinese are hunting us,everywere lol


Mystik - January 23, 2006 05:44 PM (GMT)

Since its establishment by Law 191 on September 30, 1936, the Hellenic Chamber of Shipping has developed a record of significant activity as official advisor to the government on shipping issues, always striving for the protection and promotion of the interests of Greek shipping industry. Through the years, the problems of the various sectors of the national merchant fleet have been the subject of thorough study, and the opinion of HCS to the Administration has always been objective and above individual interests.

Going back to the Chamber's history through the volumes of its meetings' minutes, one comes across to testimonies of events that have marked or influenced the ascending course of Greek shipping to the top of the world shipping league.

First Period

The Chamber convened its first general assembly on March 18, 1937, on the premises of the Piraeus Association with the participation of 83 members. The assembly approved the rules of association and elected George Embiricos as President, and Emmanuel Michalinos and Panagis Yannoulatos as Vice Presidents. At the time, the Chamber housed its services in a leased building at the Korai square and was host to Bureau of Shipping Committee on Balkan Understanding. The lawyer George Daniolos was hired as legal advisor.
The issues that the Council dealt with in its first year of operation included a feasibility study on the creation of a marine insurance organisation with shipowners' funds and the participation of the National Bank.
At that time, the Greek merchant fleet numbered 599 steamers aggregating 1.8 million gt, and 714 sailing ships of 55.5 thousand gt.
The reduced competitiveness of the Greek cargo ships vis-a-vis foreign flag ship was a major problem the national shipowning community was facing in that period. This was owing to "the unsuitability (of Greek ships) due to age for the carriage of valuable or perishable cargoes", as well as, to "the exclusion of the Greek flag by the importing states which prefer to use their own ship, forcing in this way the Greek ships to quote bottom rates".
No assistance by the state was available because "the size of the cargo fleet is disproportionately larger than the national need for sea transport services, and as a consequence the Greek state is unable to implement any flag protection policy, like other countries do". As a result, "the Greek ship found itself vying for cargoes with heavily subsidised competitors and, inevitably, it was forced out of the market".
The foundation of the Chamber coincided with the creation of the Ministry of Mercantile Marine, and the appointment of the Piraeus lawyer Defkalion Rediadis as the first shipping minister.
The Annual Report of the Hellenic Chamber of Shipping for the period 1939-1940 describes the climate prevailing in the eve of the Second World War as follows:
"The entire world is being one step away from war and a single sparkle is enough to unleash the tremendous powers of evil that lie dormant. These abnormal circumstances are having a strong effect on the international economic relations which are vulnerable to politics. Adversely affected by this abnormality is shipping as being the prime instrument of world economic relations".
The crisis brought about additional problems to the Greek fleet and a large number of its units were laid up. The insurance cost rose sifnificantly, while, there were cases where crews refused to carry out their duties. The latter attitude was attributable to "either the fear overwhelming the crews based on rumours about arms of tremendous destructive power being likely to be used in the impending war, or because they (the crews) deemed the time was appropriate for pushing ahead with the highest possible demands". The intervention of the government through the introduction of war bonuses for crews, and heavy penalties for disobedience in time of duty on the other hand, sorted out the problem. Also, a compensation fund to cover crew accidents in war time, on top of the owners' P&I insurance, was set up.
On the other hand, the state found itself in need to ask for the owners' extra financial contribution to which "the positive response of the shipowning community, fully conscious of its patriotic duty, was unanimous". At the same time, there was requisition of a number of ships to ensure continuous supply of the country with food and materials.
That period saw increased sales of Greek vessels since the second-hand prices were kept high as a result of the British government's prohibition of selling nationally owned ships to foreigners.
The Chamber continued to strive for the industry's welfare even during those dismal days. Giving an account of the Chamber's activities at the Council meeting of March 22, 1940, Nikolaos G. Livanos who a year earlier was elected President, said: "Rising above individual considerations, we briefed the Administration on the accurate picture of the situation in shipping and sought state assistance where this was possible to be given. Unfortunately, we did not deal with the pleasant things like distributing state aid to membership, which is the privilege of other (foreign) organisations. The small and poor Greece is not in a position for such luxury to its shipping".
The same meeting also heard Loucas Nomicos touching for the first time on the arbitration issue: "Along with its other activities, the chamber should undertake the resolution of shipping disputes, because as the case is today, the hearing of such disputes by the civil courts is costly and time consuming. What's more, it often leads to unfair ruling as the judges are lacking the insight knowledge to hear such specialised cases". The Chamber's legal advisors then were given the mandate to draw up the rules for carrying out arbitration under the HCS auspices. Nevertheless, the war broke out in the meantime and these rules came into force much later, in 1948, when they were made part of the national legislation.
For the survival and development of the Greek shipping industry during the troubled period of the Second World War, the Chamber of Shipping advised its members to strengthen their virtues and advantages and eliminate their shortcomings. The list of virtues and advantages included: "long shipping tradition, adaptability to the frequently changing shipping environment, dedication to the profession, availability of quality seafarers with good seamanship and a sound sense of duty". The major shortcomings referred to the shortage of funds for fleet renewal and to lack of co-operation spirit among Greek owners: "The fact that the quality of fleet is the worst of all flags is due, to a large extent, to the individual ambition of each Greek to become owner by acquiring any ship, no matter its condition, at a low price, instead of teaming up with other colleagues for the creation of a viable and strong enterprise".
The Greek shipping suffered heavy casualties from the war. As a result of attacks of German submarines to innocent merchant ships, more than 2,000 national seafarers lost their lives and about 2,500 became invalid for life from injuries. The war cost the fleet two thirds of its strength. Thus, when the war ended, the Greek merchant fleet numbered only 154 ships totalling 532,000 gt.

Second Period

The Hellenic Chamber of Shipping did not suspend its operation during the German occupation. Even at the ensuing dismal period of the civil war, the chamber's instruments, save the General Assembly, met regularly despite the fact that members of the Council and the personnel were called up for military duty. Inevitably though, its activity was restricted to mere routine matters.
The General Assembly convened its first post-war meeting on January 28, 1949 to elect new Council. Emmanuel Michalinos was elected President, while, Andreas Synodinos and Anastasios Potamianos were elected Vice Presidents.
At the time, Greece was ninth largest shipping power having 1.3 million gt in its national register, 500.000 gt less than the pre-war period. However, another 3.5 million gt of Greek-owned tonnage operated under foreign flags, and 200.000 gt more were being built at the world yards on behalf of Greeks. Previously, in 1946 the Greek owners acquired 100 Liberty ships from the US surplus on favourable terms. These vessels had a valuable contribution to the resurgence of the war stricken Greek fleet.
Since May 1949, the world shipping entered a period of severe crisis characterised by proliferation of protectionism. As a consequence, one third of the Greek fleet was laid up.
The Annual Report for that year reads, among others, for the activities of the Chamber: "- The Chamber prepared a uniform charter party and a bill of lading for use by the Mediterranean trading steamers and sailing ships. - It repeatedly sent submissions to the authorities asking for the inclusion in the new Constitution of a provision for the creation of maritime courts, to ensure appropriate and fast resolution of shipping disputes by special judges. - It exerted pressure to the Piraeus Port Authority and managed to reduce the transhipment cost."
The crisis lasted two years and ended when the Korea war gave a boost to the world trade. Nineteen fifty one was a year of development for Greek shipping where the fleet saw a substantial increase. The Greek flag, however, continued to be unattractive and as a result, it had marginal gains from the increase in the Greek-owned tonnage.
The competitiveness problem of the national register occupied the chamber as well as the government which set up an all-party committee to look into measures. The new measures for shipping amended the taxation of ships, laid down rules for the manning of ships, and provided for the creation of marine colleges for the training of deck and engine officers.
In the same year, the Panhellenic Seamen's Federation and the Union of Greek Shipowners signed the first collective pay agreement.
Meanwhile, the Greek register tonnage climbed to 6.5 million gt, which is equal to 7.5 per cent of the world tonnage. This made Greece's shipping third largest in the world.
The General Assembly of January 28, 1953, elected Antonios Dimadis as new President. In that year, the repatriation of Greek-owned tonnage was facilitated further by the Law 2687 "on investment of capital from abroad".
In the fifties, the world shipping suffered from the Suez crisis which broke out in 1956. Otherwise, that decade saw protracted periods of buoyant freight market which prompted Greek owners to place new orders in great numbers.
Thus, at the end of the decade, the Greek-owned merchant fleet numbered 1,520 ships aggregating 12.2 million gt, and its share in the world fleet rose to 10 per cent. At the same period, the cargo ship Atlantic Queen became the thousandth ship to hoist the blue and white flag.
On the 2nd of July 1963, the General Assembly held an extraordinary meeting following the unexpected death of President Antonios Dimadis. The assembly elected unanimously Alkimos Gratsos as President. In the meantime, the workload of the chamber increased considerably, and the first priority of the new President was to amend the Chamber's constitution (by Law 4512/1966) and increase the members to the secretariat. Previously, in April 1965, the Chamber moved to its own premises on 100, Kolokotroni street. That was a period of intense activity for the Chamber which manifested through the issue of numerous publications and studies on contemporary shipping issues. In addition, the Chamber started participating in the meetings of IMO (then IMCO).
In parallel to its advisory activity, the Chamber promoted the institution of arbitration.
At the General Assembly of January 29, 1965, the President announced : "There is a growing tendency for the charter parties to include a clause providing for any disputes arising between the contracting parties to be resolved at the Hellenic Chamber of Shipping".
In the sixties, the Greek-controlled tonnage continued increasing, while large tankers and OBO's, as a consequence of the closure of the Suez Canal, added to the fleet.
At home, a package of legislation in 1967 and 1968 created favourable conditions for the management of the fleet out of Piraeus.
The Annual Report of the Chamber for 1969 reads: "The end of the year 1969, which was justifiably called as the year of Greek Shipping, found the fleet stronger than ever dominating the seas. This is undoubtedly attributable to the realistic shipping policy the government implemented, and to the creativeness and ingenuousness of Greek owners".
Indeed, during the decade the Greek-owned merchant fleet doubled its capacity and rose to the top of the world fleets with 3,057 ships totalling 27 million gt. Besides, the yards during that period were building 300 ships of 13 million dwt on behalf of Greeks.

Third Period

The cyclical fluctuation of the freight marked was among the main features of shipping in the seventies which had known periods of euphoria as well as of crisis, like the one of 1974 which was due to the oil crisis and the world economic recession.
After an exceptionally long and productive period at the Chamber's helm, Alkimos Gratsos handed over to Nicos Nomicos who was elected by the General Assembly of January 31, 1977. The same assembly elected George Chandris and Paul Sarlis as Vice President and Secretary General respectively.
The Law 989/1979 brought about radical changes to the Chamber's legislation aimed at upgrading its role. For the sake of flexibility and speed of decisions, the Council which now comprises 32 members for better representation of the various shipping sectors, becomes the governing body of the Chamber with regular meetings every second month. Between them, the seven-member Executive Committee meets weekly to deal with day-to-day affairs.
In 1983, The Hellenic Chamber of Shipping became member of the International Chamber of Shipping, a fact which increased its ability to follow and participate more actively in the world shipping affairs.
The new decade opened with good omens. In 1989, the Greek flag fleet numbered 3,920 vessels of 42.7 million gt. These were and continue to be record numbers for the national register.
Nevertheless, the short period of euphoria gave place to the worst and most protracted crisis that shipping has known since the last world war. The Elefsis Bay which was filled with laid up ships depicted in the best way the extent of the crisis. All shippings around the world , including the Greek one, suffered heavy casualties. So did the shipping banks.
In Greece in particular, the administration introduced the notorious 1376/83 law which provided for the rotation of crews on Greek ships after a fixed period of service with a view to combat unemployment among seafarers. That dealt a death blow to the Greek flag which lost half the number of its ships to foreign flags in a quest for survival. The only good thing, if there can be anything good from a crisis, was that a large scale renewal of the Greek fleet was effected as a result of scrapping old tonnage and intense sale and purchase activity.
Meanwhile, on February 15, 1984, Constantine Fafalios was elected President at the Chamber. Two years later, HCS celebrated its 50th Anniversary. The occasion was marked with a conference on March 6, 1986, at the Evgenides Foundation, with the participation of government members, distinguished speakers and a large shipping audience. The purpose of the conference was to present the chamber's proposal "for a national shipping policy".
In February 1988, George Lanaras was elected President. During his four-year term of office, the chamber computerised its services and created a library for the members' use as well as for the public.
Constantine Comninos was the next President the Council elected, on February 17, 1992. Responding to its member's concern over insurance issues, the Chamber organised a two-day seminar on P&I Clubs on November 2, 1992. There was a constructive discussion and exchange of views between the audience and representatives of P&I Clubs. On April 3, 1995, the Chamber moved to refurbished headquarters on 65, Akti Miaouli.
Nineteen ninety six began with the election of George Gratsos in the presidency, on February 15. The Chamber was celebrating its sixtieth anniversary.

123-t - January 24, 2006 05:08 PM (GMT)
Thanks for the historical overview, Mystik.

123-t - January 25, 2006 01:35 PM (GMT)
Here an older article,

Tanker sales signal shift in Greek shipping
Three of the biggest Greek names in shipping have just sold 4.6 million tons worth of tankers. The move could be part of a trend that will weaken the Greek flag and torpedo shipping revenues to Greece

Athens News Writer

ATHENS, Greece — Three of Greek shipping's leading names have sold a staggering $2.1 billion worth of tankers in less than three weeks, reaping hundreds of millions of dollars in profits in the process. It may hint at the start of a new trend among the current generation of ship owners.

The blockbusting deals struck by Peter G. Livanos, Theodore Angelopoulos and Spiros Latsis have demonstrated impeccable timing and outstanding asset play in the secondhand ship market at a time when ships are changing hands at record high prices.

The most spectacular deal was struck by Livanos, who sold 16 Greek-flag tankers to Brussels-listed tanker specialist Euronav for $1.02 billion. Confirming the deal March 8, Euronav said it will take over the entire fleet of TankLog, the company formed by Livanos-controlled Ceres Hellenic Shipping Enterprises to hold all of its tanker assets.

Euronav will pay a combination of cash, stock and assumed yard payments to secure the fleet of 14 modern double-hull tankers ranging in size from 148,000 to 160,000 tons, including five on order in South Korea for delivery in 2006 and 2007, plus two double-hull 106,600-ton tankers.

Due to be cemented by Euronav shareholders at end of next month, the deal sees the Livanos group reap $420 million in cash and $350 million worth of stock, while Euronav will assume $300 million in obligations on the five tankers being built in Korea.

Bigger and bolder Ceres

On finalization, Ceres will hold a 20 percent stake in Euronav, the second largest holding in the fast expanding company and Livanos will have a seat on the board.

This deal gives the Greek owner another important chunk in a public shipping company. In 2000, Ceres' ChemLog was merged with Norway's chemical tanker operator Odjfell and today the Greek end owns more than 25 percent of Odjfell.

Ceres remains a prominent operator of bulk carriers and is building up a presence in the large gas tanker sector.

It will retain technical and part commercial management of the 16 tankers, which will continue to fly the Greek flag and be crewed with Greek officers. The fate of shore-side staff is said to be less certain.

Livanos said the Euronav deal was a strategic means to invest in a European tanker operation. The combined fleet of the two companies will be 42 ships, including the 28 very large crude carriers (VLCCs) and ultra-large crude carriers (ULCCs) belonging to Euronav.

Livanos said, "It is on the financial side a commitment into investing in tankers through a European public company as opposed to as individuals. There were a lot of things that we liked about Euronav, not least of which was the European play and we simply saw value in bringing the two assets together.

"It was not something that we would have considered doing with a U.S. public company," he added.

Euronav's managing director, Paddy Rogers said, "We had been looking at the suezmax [ships of 120,000 to 160,000dwt] market for some time and the Ceres Hellenic fleet had all the components that we hoped to build ourselves."

Euronav on the move

Rogers said another attraction was Livanos himself, "one of the best names in shipping." This deal was the second swoop by Euronav on a major Greek fleet in a matter of days. Theodore Angelopoulos-controlled Metrostar Management sold four VLCCs to Euronav for $477.5 million, including a 318,000 dwt newbuilding slated for delivery in May.

Angelopoulos interests had spent the first weeks of 2005 denying reports that Metrostar was planning to sell its fleet of eight double-hull VLCCs for $1 billion. The deal with Euronav resulted in a whopping profit of $141 million on the purchase price of the ships in late 2003.

Indeed, this earlier deal adds another twist to this sale. In a joint bid, Angelopoulos and Livanos, after fierce competition during late 2003, paid what was considered a high price of around $300 million to net the five-ship Niarchos fleet when this colorful Greek name quit ship owning altogether.

At the time, Angelopoulos paid $210 million for the three VLCCs and Livanos chipped in $90 million for the smaller ships, all five of which are now being sold on to Euronav, the VLCCs by Angelopoulos and the 106,000-tons by Livanos.

Angelopoulos has also just negotiated the sale of two 2003-built 37,267-ton chemical tankers for a total $66.5 million and is nearing a deal to sell two more new VLCCs for a total $265 million. These sales will leave Angelopoulos without any tankers and just three bulk carriers.

Latsis sells off

The Angelopoulos and Livanos sales came as the market was digesting indications that Latsis is reducing its interest in shipping. The Spiros Latsis-controlled group has sold three modern 46,000-ton product tankers to highflying Greek owner TOP Tankers for a very firm $135 million in total. The five-year-old ships were built for under $100 million.

The sale to TOP, which listed on the U.S. NASDAQ exchange last summer, leaves the once mighty Latsis with just four 46,000-tonners and two 2003-built LPG carriers of 58,900 dwt.

What the future holds

There are three remarkable trends in these sales, which involved more than 4.6 million dwt of tankers. The first is that much of the tonnage is Greek flag, which could be lost to the Greek registry.

Secondly, all the ships have passed from private ownership to companies that, through a stock exchange listing, are corporate in style and have an army of shareholders.

Thirdly, the sales come at a time when the EU has moved to introduce criminal sanctions against seafarers in cases of ship pollution, following the Prestige disaster in November 2002 off Spain and the mid-summer 2003 grounding of the Tasman Spirit at the entrance to Karachi port.

Thus, with new European Union regulations on the way, shipping is becoming a very risky business for all involved. It is becoming increasingly difficult to attract recruits. There is an increasing number of instances in which seafarers are being put in jail to wait trial.

A major motive for these sales of tankers may well be the heightened liability of operating ships carrying crude oil and oil and chemical products.

Only the heirs of Stavros Niarchos — sons Philippos and Spyros and daughter Maria — said they were quitting shipping in light of the politically motivated regulations governing the operation of ships. But the regulations are worrying the shipping community, many of whose players have extensive business interests outside shipping.

In the case of Niarchos, the family admitted they were persuaded against risking 95 percent of their assets should an element representing just 5 percent of the assets be involved in a pollution incident.

Although Greece is a leading voice in the drive for safer and cleaner shipping and Greek owners are the heaviest investors in new ships, there is always a risk.

Developments now unfolding in the case of the Tasman Spirit grounding show this. The Tasman's managers, Polembros Shipping, its insurer and the Pakistani government are all working to find a solution to meet claims of $5.8 billion plus punitive damages for the spill, filed by the country's retired military.

However, with shipping contributing over $17.6 billion to Greece's foreign exchange earnings in 2004, it is difficult to imagine a withdrawal of Greek players from tanker-shipping altogether.

difficult to imagine a withdrawal of Greek players from tanker-shipping altogether. (Reprinted with permission from Athens News,

123-t - January 25, 2006 03:38 PM (GMT)
Shipowners turn to dry bulkers thanks to high Chinese demand

The massive rise in raw material imports by China and the ever-growing role this country plays in international transport has made more and more Greek shipowners move away from the use of tankers, which have traditionally supported the rise of Greek shipping, and into dry bulkers.

At the end of last year, Petros Livanos’s Drylog Bulkcarriers proceeded to a series of moves to strengthen its presence in the dry bulker market, according to a report in the industry publication TradeWinds.

Along with with International Shipowning Comp., which is based in New Orleans and owns shares in Drylog, the Livanos company has bought two modern panamax bulkers from Naples-based Augustea for a total of $48.5 million. Both 73,300-dead weight ton ships were built in 1998.

The two firms also operate through another company, Dry Bulk Cape Holding (DBCH), which will incorporate the two recently purchased vessels, renaming them Bulk Fern and Bulk Cedar. DBCH was set up in end-2003 and already owns two modern capesize bulkers of 170,000 dwt.

Drylog also proceeded recently to an order to the Tsuneishi shipyards for a ship to be delivered in 2008 and already chartered by Mitsui. Drylog further owns 50 percent of three capesize bulkers. In total the Drylog group showed net profits of $6.2 million in the first nine months of 2005.

The Livanos group is also involved in DBCN, a consortium managing handymax bulkers. Drylog and the Chilean company CSAV have bought out the 50 percent stake owned by two of the consortium’s founding members, Belgium’s Bocimar and Greek AM Nomikos, of the well-known Greek shipowning family. DBCN was established in early 2004 to focus on the South American market, but the new owners are expected to expand on a global scale.

DBCN and Drylog also take part in another consortium, Dry Bulk Handy Holding, which has invested $24.4 million for a handymax ship under construction to be delivered this September by the IHI Marine United shipyards in Japan.

Kristen Marine

Another Greek company bolstering its interests in the dry bulker market is Kristen Marine (unrelated to Kristen Navigation of the Angelikousis family), which, according to TradeWinds, is involved in the acquisition of the ship Star Chaser, built in 1997 with a capacity of 28,300 dwt. But a company representative confirmed only its interest, stressing that negotiations did not end in an agreement. The ship has been recently sold, along with the vessel Star Elfin, for $21.75 million each, without the buyer being identified.

Kristen enjoys significant cash flow as it recently sold part of its fleet. In October it received $42.75 million for the sale of two similar bulkers, the Ocean Trader and Ocean Ranger, both 32,000-dwt vessels built in 1983, of Voyager, a 33,000-dwt ship built in 1985, and of Discoverer, built in 1983 with a capacity of 34,000 dwt. Purchasing the ships was Norway’s KS, managed by Lorentzen Skibs.

In May 2005, Kristen Marine reportedly sold Navigator I, a 33,000-dwt ship built in 1977, for $5.35 million. A month earlier the company had sold two multi-purpose containerships, the Tasman Independence and Tasman Resolution, built in 1989 and 1998 respectively, for $11.5 million each.

Market observers say Kristen Marine is seeking openings in various shipyards in order to acquire some vessels of the handysize and handymax categories.

123-t - January 27, 2006 11:16 AM (GMT)
Shipping: A Natural Investment Choice

Greece's shipping tradition is legendary. Since ancient times, Greek seafarers have mastered maritime ways and have been leaders in commercial sea transport. In 2004, Greece absorbed more than 13 billion EURO from its merchant fleet, making it the first sector in the Greek economy in export earnings, continuing an age-old practice. In fact, in the time of Pericles, Greece's classical monuments, including the Parthenon, were financed by Merchant Marine capital.

Geography has played a primary role in Greece's maritime strength. With thousands of kilometers of shoreline and innumerable islands, ships have been fundamental to ferrying goods and people throughout the country. Immediately following World War Two, Greece's modern shipping industry turned itself into a powerhouse, with names such as Onassis, Niarchos, and Latsis creating a dominant national fleet that won respect and admiration around the world and contributed significantly to Greece's economic development from 1953 to 1974.

In fact, Greece's shipping industry helped spawn the era of globalization since more than 90% of the world's goods are transported by sea.

Today, the Greek flag fleet consists of roughly 3,500 vessels amounting to more than 103,807,860 gross tons or 171,593,487 DWT. This fleet represents about 20 percent of the world's fleet. Greece shipping accounts for about 60% of the EU shipping total. Approximately 23.5 percent of the world's oil tankers of 73.8 million tons belong to Greek ship owners, as much as the combined fleets of Japan and the United States. Greek ships transport about 70 percent of Chinese imported oil and natural gas and as the economies of China and other countries expand, Greek shipping is keeping apace with newbuilds. The Greek fleet is rapidly becoming renewed to meet rising global demand, and in response to new regulations, so that between 2001 and 2005 Greek owners have invested more than $20 billion in Japanese shipyards alone for the construction of new ships.

According to Minister of Mercantile Marine Manolis Kefalogiannis, Greek-owned ships are responsible for 90% of sea transport in the European Union. The Minister has stated, "One of our goals is to attract shipping capital to Piraeus. We envision Piraeus and the wider Attica region to become a shipping services center. The Greek government has made it one of its primary goals to set off the value added to the Greek economy from shipping activities.”

This goal, according to Minister Kefalogiannis, is linked primarily with the transformation of Piraeus into one of the Mediterranean’s most significant shipping centers. The Minister also announced a series of measures currently under consideration that are designed to further reinforce the shipping activities of interest to Greece. These measures include:

Reinforcing the role of Greek insurance companies in covering marine related risks.
Encouraging Greek ship owners to establish an insurance institution (P&I Club), which is expected to increase the attractiveness of related shipping activities.
Reinforcing and supporting the activities of shipping companies (According to the Ministry, this is a matter of utmost importance and is under continuous observation.)
Establishing marine arbitration and an institution of marine courts in Piraeus, where marine issues will be tried by specialized judges.
The leadership of the Ministry is also examining a proposal from the city’s chamber institutions for the establishment of a shipping stock market that would have its headquarters in the Piraeus and eventually could become an international shipping and finance centre.

Recently, the Greek government has introduced other legislation and incentives aimed to strengthen the competitiveness of Greek shipping. Reductions in the rates of tonnage tax and reduced taxation on seafarers have had a positive impact on the industry. More than 30,000 sailors are employed in the sector, and more than 450,000 employees and their families depend on shipping for their livelihood. Other innovative initiatives include a plan to set up a maritime services cluster to provide high quality training for shipping professionals. In addition, the Special Secretariat for Competitiveness, consisting of officials from the Ministries of Economy, Development, and Mercantile Marine, has proposed a set of internationally competitive shipping services, such a developing banking, financial and ship brokerage services, shipping insurance, ship management services, construction, repairs, refits and ship maintenance, crew management services, and shipowners' support services for alternative investments and port infrastructure.

Shipping has a strong future in Greece and global trends point to sustained demand for the foreseeable future. As Greece upgrades its ports and dynamic government initiatives create new opportunities, investors have multiple avenues to explore in this formidable Greek sector.

Lord - January 27, 2006 11:42 AM (GMT)
This sentence should be Quoted...

Greece shipping accounts for about 60% of the EU shipping total. Approximately 23.5 percent of the world's oil tankers of 73.8 million tons belong to Greek ship owners, as much as the combined fleets of Japan and the United States.

and used allways for statements ..aka...Why the EU wanted Greece to be a part of
And why they gaved/lent money for further Infrastructur... ;)

123-t - January 27, 2006 11:47 AM (GMT)
The infrastruncture projects:

Greek Ports: A 6-Billion EURO Investment Programme

Mr. George Vlachos (photo), Secretary General of Ports & Port Policy at the Ministry of Mercantile Marine, speaks to e-News about the vast investment scheme underway to upgrade Greece's ports. The private sector will play a central role in the estimated 6-billion EURO projects.

How is the Greek port system structured? What are the primary ports throughout the country?

The Greek port system consists of :

The two biggest ports, Piraeus and Thessaloniki, which operate as S.A. already listed in the Athens Stock Exchange, while the capital stock belongs mainly to the State.
Ten other significant ports, Kavala, Alexandroupoli, Volos, Kerkyra, Igoumenitsa, Patra, Elefsina, Lavrio, Rafina and Heraklion, which operate as S.A., whereby the Greek state is the only stakeholder.
Public and municipal ports.
Public and private marinas.
Different ports have different roles, so that the facilitation of transport is promoted, a well-balanced national and regional development can be achieved, as well as the economic and social cohesion and the coherence of the national territory. Within the framework of the National Port Policy a complentarity of the ports is envisaged.

What are the objectives of the investment and upgrade plan currently under development?

An ambitious investment programme for an amount currently estimated at 6 billion EURO associated with the Greek port development is planned. The European Investment Bank will provide 50% of the necessary funding as a loan. For this reason a Financing Protocol between the Ministry and the Bank is signed. The loan conditions are favorable, since an attractive and stable rate of interest is foreseen, while there is a loan duration of 25 years and a grace period of 7 years. The financing depends on the feasibility of each individual project. To take full advantage of the EIB resources and support the implementation of the investment plan, the Ministry intends to hire a Consultant. Within the context of the 2005-2015 port development plan, the private initiative will contribute significantly to the development of the ports and the improvement of port infra- and superstructure. The contribution of the European Investment Bank to the investment programme would facilitate and encourage the participation of investors from the private sector. Many important firms are interested in relevant projects and therefore a strong participation of the private sector is to be expected.

How will PPP – public private partnerships – play a role in these projects?

The attraction of private capital for investments and the promotion of public and private partnerships are among the top priorities of the Ministry. The Ministry will promote all required measures to facilitate the attraction and the efficient realization of investments. The forthcoming liberalization of the port market is expected to increase significantly the opportunities for the involvement of the private sector and attract private funds for investments in the ports. Furthermore, the Ministry is about to create a one-stop office, which will help possible investors in shipping and the port industry to overcome bureaucratic procedures. Granting access to the port market services for private providers will enhance competition and affect positively the quality of the port services. Nevertheless, public investments are expected to continue playing the basic role for the development of the transport infrastructure, while the private sector will probably focus on investments in superstructure and cargo - handling.

What opportunities do you see for foreign direct investment, as well as cooperation between foreign and Greek companies, in these projects?

The twelve most significant Greek ports are planning to undertake investment programmes, which include the improvement of infrastructure and superstructure, the purchase of modern mechanical equipment, information technology projects, personnel training programmes, and other areas, aiming to offer high quality port services and improve port competitiveness. Elimination of bureaucratic procedures and the modern operational structure of ports, as well as computerization, and the use of electronic data processing systems are considered as fundamental conditions for port development and competitiveness. The modernization of the port infra- and superstructure and the enhancement of the competitiveness of Greek ports can be achieved through the involvement of the private sector. The Ministry is about to plan concrete steps to attract private funds for investments in ports (for example an international promotion campaign) and support the private initiative.

Furthermore, the creation of a “Sea Motorway” in the East Mediterranean Sea, connecting Central- and Northeast Europe with the Southeast edge of the European Union, Cyprus, and the Middle East region, through a trans-European multimodal transport system, offers new opportunities for Greek and foreign companies. Because of Greece’s strategic position at the Southeastern borders of the EU, Greek ports can play a crucial role in providing transshipment nodes and become real European gateways to and from this area. The Greek planning for the transport infrastructure takes into consideration the development of the Trans- and Pan-European Networks of Transport, as well as the perspective of a Euro-Mediterranean Transport Network. Private investments are hereby not only welcome but also necessary.

Chinese interests have recently expressed an interest to invest in Greek ports. How do you view this and what potential does it indicate for Greece to act as a beachhead for Chinese products into the EU?

In the past two years, the Greek government has exerted significant efforts and introduced extensive reforms, to strengthen and modernize the management culture of ports through enhanced commercialization of services, in order to attract investments in the Greek port sector. The modernization of Greek ports and the geopolitical position of the country at a place connecting the Balkans, the Black Sea basin and the South Mediterranean palces Greek ports as main export destinations and therefore an appropriate sector for investments for the Chinese Shipping industry.

The implementation of Chinese investments in Greek ports will intend to promote the mutual interest of Greece and China in the port and transport sector, to facilitate the transportation of goods produced in China to Europe and to accomplish Greece’s national port policy aim to become a transit country to Europe. The potential cooperation between Greece and China will contribute to experience and best practices sharing regarding port development, port services, port operation and the application of new technologies.

123-t - January 31, 2006 12:47 PM (GMT)
Metrostar grows further with acquisition of two tankers

Metrostar, the shipping company of Theodoros Angelopoulos, is strengthening its fleet, according to TradeWinds, an industry publication.

The report said that the firm has acquired two VLCC tankers under construction (with a capacity of 300,000 deadweight tons) from the Lebanese company Ghassan Ghandour.

Shipbrokers estimate the cost of the purchase at $250 million, as each vessel is priced at about $124 million. The ships were ordered from Korean shipyards Daewoo Shipbuilding & Marine Engineering in 2004, costing $85 million each, with delivery scheduled for 2007.

Metrostar has improved its cash flow in the last couple of years after selling its entire fleet to Genmar of Petros Georgiopoulos in 2003, for $520 million. Additionally it sold four VLCCs last March to the Brussels-listed Euronav, acquiring $477.5 million.

Besides its recent purchases, Metrostar has 13 dry-bulk ships under construction and manages two more VLCC tankers. The latter are the only moneymaking assets of the firm at present ahead of the delivery of the new ships.

Other Greek shipping firms are also active in this period: Centrofin Management of the Prokopiou family recently sold two modern aframax tankers, earning significant capital gains. The first one, the Apanemo, with a capacity of 114,000 dwt and built in 2003, was reportedly sold to the Lykiardopoulos family which controls Neda Maritime. Estimates put its price at $75 million, while Centrofin only paid $39 million for its construction in Korea. Neda Maritime reportedly controls 19 vessels.

A few weeks ago Centrofin sold the HS Norma, a 115,000-dwt tanker built in 2004, to Italy’s Finaval for about $70 million. The company has in recent years invested $425 million in the radical renewal of its fleet, acquiring 13 new tankers in the last two years, while getting rid of its older ships, constructed in the 1970s or early 1980s.

Recently the firm paid Euronav $80.5 million to buy a suezmax vessel of 159,000 dwt that is still under construction and will be delivered next year.

123-t - February 1, 2006 01:31 PM (GMT)
More big tankers will mean lower profits for shipping
By Nikos Roussanoglou - Kathimerini

The abundance of big tankers, the so-called very large crude carriers (VLCCs) of some 300,000 deadweight tons, makes several analysts express reservations about the projected revenues of the category this year.

In 2005 the revenues of VLCCs dropped by 40 percent compared with the “golden” year 2004 when a lack of vessels and the great increase in demand pushed freight rates to extremely high levels. Martin Stopford, Clarkson’s head of research, recently told the industry publication TradeWinds that in the first half of the new year it expects the current trend to continue and forecasts an additional decline of profits by 30 percent for the entire year.

However, this decline does not seem to create any particular problems for shipowners. The average daily chartering rate for VLCCs came to $55,000 in 2005, while according to Stopford’s forecast it will not exceed $37,000 this year. Even this amount will not deter shipowners as it still allows them to make significant profits. So what is causing the pessimism? The main argument centers around the significant rise in the supply of new ships in this section of the market and the reduction of exporting activity, mainly from Russia.

Shipowners disagree with this view, however; they are avoiding — at least in public — making any sort of forecast about the future of the shipping market. Nevertheless many shipowners tell TradeWinds that 2006 will be similar to 2005, with the daily rate ranging from $50,000 to $70,000. Such amounts do allow for high corporate profits.

Furthermore, there are some positive factors such as the good prospects of the big economies of the US, Europe and Japan, combined with the continuing growth of China. Yet nobody can predict the impact of unforeseeable events such as the hurricanes that hit the US in 2005.

At present, there are but a few chartering deals for VLCCs, as shipowners are not willing to allow prices to drop, while the market is not risking chartering with the current prices, waiting for them to fall. According to shipping companies, there could be problems after the ships are delivered from the shipyards in the second quarter of 2007, having been chartered in 2005 at rates of $120-130 million. The question is where the market will be at that time, since if it should decline significantly then investment in those vessels may not offer sufficient returns.

VLCCs are among the most expensive ships in the market. The cost of constructing such a tanker reached $128-130 million last year, but has now fallen to $118-120 million. TradeWinds has stated that Kristen Navigation of Yiannis Angelikousis paid $120 million for the purchase (in fact, resale) from Tai Chong Cheang of a VLCC under construction ordered at the Daewoo Shipbuilding shipyards to be delivered next year.

However, as analysts point out, only a few shipowners appear willing to invest in new orders for the construction of VLCCs at today’s price levels.

On the positive side, shipowners are generally optimistic about the market, as daily rates for VLCCs carrying oil from the Middle East and from West Africa come to at least $100,000. This is attributed to the market’s seasonal character, because when the summer demand for oil was less, the rates had fallen. Since the autumn, though, when demand again increased with the coming winter, optimism returned.

123-t - February 6, 2006 01:15 PM (GMT)
Shipowners in a rush to submit orders ahead of new regulations
By Nikos Roussanoglou - Kathimerini

Greek shipowners are back ordering new ships after a period of quiescence last year. In recent months most Greek companies have received the ships they had ordered during 2002-04, renewing their fleet considerably.

Soon, though, shipyards in countries such as South Korea will have no launching cradles available even for ships to be delivered in 2009. This is forcing several shipowners to make decisions earlier and submit orders in order to avoid any future delays.

Another reason leading many companies to place new orders is the rules that will apply as of April 1, following a five-year preparation under the auspices of the International Association of Classification Societies (IACS). The rules change the way ships are constructed, both tankers and dry bulkers, with the obligatory addition of 3-4 percent of weight in steel, mainly to improve safety. The new regulations will be valid for all shipbuilding contracts signed from April 1 for tankers at least 150 meters long and dry bulkers at least 90 meters in length.

These changes will undoubtedly ramp up the already high costs of ship construction, although this increase cannot be calculated at the moment. As a result, a number of the deals that are under negotiation are expected to be completed by mid-March.

Tsakos Energy Navigation (TEN) is one of the most active companies, being listed on the NASDAQ index in the USA. In all, the company is expecting the delivery of 13 new vessels by 2008.

Recently, TEN announced the acquisition of four new ships costing $219 million. Two of them are ice-breaking oil-product carriers that are under construction. Their delivery is scheduled for the second and third quarter of 2007.

The other two are used double-hulled vessels. They are a VLCC tanker of 298,800 deadweight tons built in 1993 and a product carrier of 37,532 dwt, built in 2004.

TEN has also ordered two aframax tankers of 105,000 dwt at the Japanese shipyard of Sumitomo Heavy Industries. Contracts were about to be signed just a few days ago, with each vessel costing $60 million. Their delivery is set for the last quarter of 2008. The same shipyard will deliver another two aframax tankers to TEN in March and June 2007.

In all, Tsakos’s company controls a fleet of 28 tankers with a combined capacity of 3.4 million dwt and an average age of 6.5 years, against a global average age of 11.7 years for tankers.

Thenamaris of the Martinos family has also been active, confirming the order for two panamax tankers at the Chinese shipyards of New Century. They will be delivered within 2009 and analysts estimate their cost at about $46 million each.

That is the only order by Thenamaris for the time being, as the company received eight new ships during 2005. In December it received the Seaexpress bulker which carries up to 53,000 dwt; that was the second in row from the New Century shipyard. Besides its two bulkers Thenamaris has received two VLCC tankers, two aframax tankers from Hyundai Heavy Industries and another two from Hyundai Samho. The company’s fleet now numbers 47 ships, 28 of which have been constructed after 2000.

Chandris investment

The $260-million investment by the Chandris family in the order of two aframax tankers was also made known recently. The 115,000-dwt ships were ordered at the Korean shipyards of Samsung Heavy Industries and will cost about $65 million. If the contract’s option is taken for two more ships then the amount invested will reach $260 million. These vessels will be delivered toward the end of 2008.

Shipbrokers consider this price rather high and note, using data by Clarkson, that today a newly built tanker carrying crude oil costs about $58.5 million.

The Chandris family owns today four modern product-carrying aframax tankers, constructed by Daewoo, and expects the delivery of another two such ships during this year. They were ordered in 2003 at $41 million each.

Finally, the intentions of Petros Georgiopoulos of Genmar remain unknown, following the high cash flow the company has achieved in recent months after selling a big part of its fleet.

Georgiopoulos stated recently that in March his company expects the first of the four suezmax ships ordered, while he will chase any opportunities available to add more vessels to its fleet.

123-t - February 10, 2006 02:03 PM (GMT)
Shipowners want reform
UGS president says Greece’s shipping register must become competitive
The head of the Union of Greek Shipowners (UGS) yesterday called for a change in shipping policy to make the Greek shipping register more competitive, making a barely veiled threat that shipowners could always choose flags of convenience.

“It is time for the state and public opinion to realize that shipowners, notwithstanding their ability to defend their legitimate interests thanks to their great international experience, are concerned about the country’s prospects and the general welfare. (They are interested in) a shipping sector tightly integrated into the economy, society and our country’s needs, provided the necessary conditions exist,” UGS President Nikos Efthymiou told the shipowners’ annual general assembly. Efthymiou said Greece needs a “realistic” shipping policy in order to upgrade the shipping register and called for the creation of a shipping center that will provide high-quality services. The shipowners’ longstanding demands involve getting rid of the mandatory levels of local crews and officers that must be employed in ships carrying the Greek flag.

Efthymiou also referred to the importance of the Greek merchant fleet, saying that in 2005 inflows from the shipping sector accounted for 4.8 percent of Greece’s gross domestic product (GDP). Also last year, Greek shipowners placed orders for 100 new ships worth $3.7 billion. Greek-owned ships still form the world’s largest merchant fleet, which has considerably expanded over the last 15 years; from 2,426 ships of a capacity exceeding 1,000 gross tons in 1990, it reached 3,338 ships in 2005.

“Unfortunately, the Greek shipping register did not follow this impressive development. In 2005, it contained 798 ships with a capacity of 52 million deadweight tons or 36 percent of the total capacity of the Greek-owned fleet,” Efthymiou said. “The Greek State must move quickly to cover, to the best possible extent, the ground lost over the past few years when the Greek register became non-competitive compared to others.”

Referring to Prime Minister Costas Karamanlis’s recent trip to China, Efthymiou said that if what was agreed in China is implemented, “(the port of) Piraeus, but also the whole of the country will become a focal point not only for the world’s shipping sector but for international trade, as well.” He said Greek shipowners have placed many orders with Chinese shipyards and are poised to transport more Chinese goods. In the election that followed, Efthymiou was re-elected UGS president. Also elected to the UGS board were Christos Kanellakis, Theodoros Veniamis (VP) Mattheos Los and Michael Chandris (secretaries), Leonidas Dimitriadis-Eugenidis (treasurer) and Anastassios Papayiannopoulos (deputy treasurer).

123-t - February 18, 2006 07:04 PM (GMT)
Clash of new titans in Aegean

The coming deregulation in the Aegean is leading to consolidation offleets. The amalgamation of four fleets will give NEL 18 ships with which totry to dominate in the Dodecanese


NEL's vessels may look sleek but engine troubles llie beneath the surface

Deregulation of the protected Greek passenger shipping market is long overdue. Greece has won extensions to an old policy of allowing only Greek-flagged ships to operate out of Piraeus. But the European Union has been breathing increasingly hard down the necks of the Greeks - the last to preserve such a national privilege in the EU. Deregulation now has to come quickly if Greece is to escape an appearance before the European Court for breaching European competition regulations.

Weeks ago, Merchant Marine Minister Manolis Kefaloyiannis was expected to announce the freeing of ticket prices on certain routes and the lifting of the 30-year-age limit on ferries operating in the domestic network, in a bid to pacify the court. But ferry owners demanding that Greek law be harmonised with the EU are still waiting.

The minister now appears to be back-pedalling on the fare issue, saying he is shocked by fare increases likely to be set by ferry owners if the government eases its control over them. He has made no mention of the age limit.

It was proposed that operators be free to set ticket rates on services out of Piraeus where at least two lines are in competition and passenger volume exceeds 300,000. This is currently allowed on a handful of routes.

It was thought the age limit would not apply to ships complying with all international regulations. Compliance would involve expensive reconstruction work on older ships.

Though deregulation of the coastal passenger ship network will likely see foreign ferry operators entering the Greek marketplace, Greek companies should have nothing to fear, says Union of Coastal Passengership Owners president Stelios Sarris.

"The application of EU rules will end state intervention and coastal shipowners will be able to plan their routes, determine ship timetables and fares and operate competitively," Sarris says.

Sarris concedes the state must exercise its social policy and continue to regulate unpopular routes which attract little business interest, especially in the winter months.

Consolidating fleets

Meanwhile, hard-pressed Athens Stock Exchange-listed NEL Lines has emerged as a surprise candidate to lead a new round of consolidation in the sector.

On February 26, an annual general meeting of NEL shareholders will be asked to back a 3 million euro bid to merge the company with C-Link Ferries, owned by Apostolos Ventouris, who happens to be NEL's CEO. A yes vote will have a major impact on passenger shipping.

The plan is to merge NEL's five ships with six operated by C-Link into one fleet. Another two prominent ferry operators, George Ventouris and Costas Agapitos, are also expected to participate in the 'new' NEL, with cash and another seven ships, plus taking on leading roles in the management, Ventouris in operations and Agapitos in the commercial side.

NEL's move came as a surprise. The company's retiring president, Athanassios Yiakilis, said NEL forecast "a significant profit in 2006 and will pay dividends". This will mean a big turnaround as NEL hopes to reverse a pretax loss of 8.1 million euros in the first nine months of 2005, into a small profit for the year.

NEL reported a debt at end-September 2005 of 97.8 million euros, but has since restructured its finance package with a Calyon Corporation & Investment Bank-led group of banks and French export-credit system Coface, which sees the banks shouldering a heavy discount. The agreement provides that NEL initially lodge 1m euros with Calyon, and within 60 days pay 30m euros to achieve full settlement of its debts. NEL describes the agreement as giving it a benefit of 60m euros.

Meanwhile, NEL is pushing ahead with a claim filed in France last August for 89.7m euros with respect to engine problems suffered on three fast ferries built in France and delivered in 2000 and 2001, including the ship now being re-engined. Compensation is being sought for damage suffered to the company's reputation with its customers, associates and shareholders as two of its three new ferries were out of action for the whole of the summer season. The Aeolos Kenteris was stopped in September.

NEL vs Hellenic Seaways

A combination of NEL, George Ventouris and Agapitos will see this camp owning 9 percent of Hellenic Seaways. Minoan Lines has a 33.6 percent stake in HS, and after the February 6 sale by ASE-listed Attica Holdings of its 12.32 percent stake in HS to shipowner Panos Laskaridis, he now controls 17.6 percent. Laskaridis was already vice-president of HS.

NEL is presently engaged in strong head-to-head competition with HS on Dodecanese island routes and the new makeup of HS' share base will further complicate relations between the two.

And no sooner had Attica confirmed the HS share deal than market watchers were speculating Laskaridis would move to purchase Attica's 11.61 percent stake in Minoan Lines, building on the 5.2 percent stake the family already has in Crete-based Minoan.

Attica controls the Superfast Ferries and Blue Star Ferries fleets, the second being a real force in the domestic market.

The Laskaridis family was an original backer of Minoan Flying Dolphins, which subsequently became Hellas Flying Dolphins. MFD grew into a fleet of some 73 vessels as a result of the consolidation of some 20 ferry companies in 1998/99. Laskaridis is the second largest stakeholder in HS after Minoan's 33.3 percent.

The Laskaridis brothers, Thanassis and Panos, are large independent reefer ship operators, controlling some 100 ships. The family also owns shipyards in the Canary Islands and North Spain, is exclusive supplier of oil to the Falkland Islands and a major supplier of bunkers and fuel in East Africa and in the Bering Sea. The family is also a big stake holder in Aegean Airlines and has an interests in hotels in Greece - the Grande Bretagne, Mount Parnes, Hyatt Regency - and abroad.

ATHENS NEWS , 10/02/2006, page: A19
Article code: C13169A191

123-t - April 15, 2006 12:02 PM (GMT)
Greek-owned fleet is growing at a lower rate, global share falling
The Greek-owned merchant fleet is showing a small decline in its share of the global fleet this year but is still growing in absolute figures and maintains its No.1 position in the world, says the latest report by the Greek Shipping Cooperation Committee, the London-based association involved with issues concerning Greek-owned ships.

A total of 3,397 vessels are controlled by Greek interests, including 364 ships under construction. This translates into a shipping capacity of 190 million deadweight tons (dwt) and corresponds to 16.1 percent of the global fleet.

The increase in ship numbers from the previous year comes to 1.76 percent, or 59 ships. More importantly its capacity has grown by 4.11 percent year-on-year, or 7.5 million dwt.

In March 2005 Greeks owned 3,338 ships with a capacity of 182.5 million dwt, which then amounted to 16.5 percent of the global fleet, down from 18 percent in 2004.

Therefore, despite the fact that the Greek-controlled fleet is still growing, its rate has declined from previous years and according to the committee this may continue.

Another key feature is the shrinking of the Greek register as the flag is carried by only 910 vessels, including 151 under construction, from 969 ships last year. This is a decline of 59 vessels and 7.5 million dwt, or 11.22 percent. This means that only 32 percent of the Greek-owned fleet bears the country’s flag. Other flags on Greek ships are the Panamese (14 percent), the Maltese (13 percent), the Liberian and the Cypriot (10 percent each).

The greatest rise in Greek ship registration was realized by Liberia and the Marshall Islands, adding 92 ships each, while the Bahamas added 43 ships. The greatest decline was recorded by Cyprus (54 ships) and Malta (45 ships).

In the Greek-owned fleet, the number of oil tankers increased by 34 or 3 million dwt to 536 vessels with a capacity of 69.9 million dwt. Chemical and product tankers have also increased, numbering 462 with a capacity of 15 million dwt, posting a rise of 44 ships and 1.1 million dwt. A smaller rise, by 13 ships, was recorded in dry-bulkers. However the 1,397 dry-bulkers in total have increased their shipping capacity by 2.7 million dwt to 87.3 million dwt thanks to the larger vessels added to the fleet.

Another positive development concerns the drop in the age of the Greek-owned fleet, as the average ship age is now at 15.3 years from 15.9 years 12 months ago and 20.3 years in 2000. The average age of the global fleet stands at 14.9 years. This shows that the process of renewing the fleet continues, even though several shipowners are reluctant to withdraw their older vessels since in some cases they achieve high chartering rates due to high demand.

The categorization of the 364 vessels under construction makes interesting reading: Tankers take the biggest share, numbering 183. They include 121 chemical and other products tankers and 62 oil tankers. There are 92 dry-bulkers under construction and 29 ships to carry liquefied gas of any kind, which serves to prove that a number of shipowners intend to expand to more specialized markets with great scope for growth.

123-t - April 25, 2006 11:38 AM (GMT)
Panamax ships to find stormy weather ahead

The future of panamax-sized dry-bulk carrier ships weighs heavily on shipowners’ minds when considering how to strengthen their fleets.

With a capacity ranging from 60,000 to 80,000 deadweight tons (dwt), panamax bulkers have a considerable portion of Greek shipping interests invested in them. Now they are threatened by the appearance of a new type of ships, the so-called super-handy or supermax.

This new category is placed between the traditional handymax and the quite larger panamax, as their shipping capacity stands at 52,000 dwt against a handymax’s 45,000 dwt.

Analysts and shipowners were mightily surprised when, a few weeks ago, supermax owners secured higher freight rates than the bigger-sized panamax. The same predictably occurred with larger vessels up to 100,000 dwt, the number of which has also begun to rise. All this, according to industry publication TradeWinds, creates huge doubts about the future viability of the panamax category.

Early this year, the Baltic Handymax Index (BHI) was replaced by the Baltic Supramax Index (BSI) as the main way of recording smaller dry-bulkers. In the first months of the new index’s operation the average level of the daily chartering rate rose to $18,804, when the same price for panamax-type vessels, as recorded by the Baltic Panamax Index (BPI), did not exceed $17,652 per day. The situation did revert to normal within a few weeks, as panamax ships secured rates of $19,155 on average while supermax vessels could only reach $16,842. Nevertheless, the morale of panamax shipowners has been dealt a huge blow as they see smaller vessels securing greater rates.

Supermax ships offer considerably greater flexibility to international traders as well as fewer empty spaces that are anyway paid for by charterers, what is known as dead-freighting. Therefore the supermax category becomes particularly competitive in the routes through Panama, the coal trade from Indonesia and the iron ore trade from India. Supermax ships could obtain a share of the wheat shipping market from the US to Japan.

Certain Greek companies have already started to adapt. Theodoros Angelopoulos’s Metrostar recently invested in kamsarmax dry-bulkers that can carry 82,000 dwt.

123-t - April 26, 2006 11:46 AM (GMT)
Shipyards propose a temporary solution for single-hulled tankers

The first quarter of 2006 saw a notable surge in contracts for the construction of new ships, due to new safety rules that came into force on April 1. The new vessels are built with the addition of 3 to 7 percent more steel in their hulls.

Disputed though they have been by the Greek shipping community, the new rules concerning ship construction have been strictly adhered to. Many shipowners therefore rushed until March to place their orders and book launching cradles in shipyards worldwide before the new regulations lifted the price of building a ship even higher.

Shipyards, however, have gone a step further. More and more analysts note that shipyard managers have already begun approaching shipowners with older tankers, proposing the transformation of single-hulled tankers into double-hulled so as to extend their life.

This offers a handy solution to shipowners who have not managed to renew their fleets to the extent they would have liked, given that shipyards are particularly busy, especially in Asia, and to the constant rise of shipbuilding costs.

According to the Marpol convention, tankers that reach their 25th year of age and do not have double hulls must be scrapped. This even touches upon younger vessels, the single-hulled ones that are 15 years old, as by 2010 security rules force them all to have double hulls. These are the very targets of shipyards. Consequently several Greek companies have proceeded to sell their ships without double hulls. A good example is General Maritime Corp of Petros Georgiopoulos, which recently managed to sell off all its single-hulled tankers after a number of transactions.

The solution which shipyards offer provides tankers with a multi-year life extension. Thanks to a technique that shipyards have developed, the conversion of a single-hulled tanker into a double-hulled one can take as little as 45 days. However, for an older vessel, this period could stretch to 70 days.

B&H Ocean Carriers will be the first company to proceed to such a move, as it recently announced it will have up to six of its oil product tankers, built in the 1980s, changed into double-hulled ones. Rules now in force would dictate the withdrawal of those vessels as the latter are approaching the age of 25 years, but after the conversion they will operate without problems.


Of course the conversion is only a temporary solution and will not be applied by all companies. Experts stress that this process had better be avoided if a ship is of low quality and particularly if its main parts are not well maintained.

The other options shipowners have are the conversion of a ship’s basic function, such as from a tanker into another type. For instance Frontline, one of the biggest companies in the sector, decided recently to convert six single-hulled tankers of the suezmax category, built in the 1990s, into heavy-lift ships. Other tankers are converted into dry bulkers. Last year, for example, China’s Hebei Ocean Shipping Co had its former VLCC tanker Hebei Innovator converted into an iron ore carrier.

Landos - June 30, 2007 03:05 PM (GMT)
Separately, the president of the Hellenic Association of Merchant Marine Captains (PEPEN), Evangelos Kouzilos, called yesterday for a national shipping policy that will allow Greece’s strength in the global shipping market to be capitalized on for the country’s economy. He said shipping is virtually the only activity for which Greece is well known and respected around the world.

The Greek Government needs to get on the ball to promote legislation to support Maritime shipping and port facilities. The Private owners have done much by themselves, but if Greece wants to maintain their leadership in this industry they need to do far more.

123-t - June 30, 2007 10:48 PM (GMT)
Several new players from formerly rather unimportant countries in shipping have emerged on the scene. One of the reasons being the new stableness the shipping sector,in general , enjoys, amongst others, due to the steadily increasing demand for raw materials to the "newer" manufacturing countries and the transport of ready made goods from these countries to the "old" industrialized countries.

The new more stable nature of the business encouraged them (e.g. China, Germany,...) to strengthen their position in the field.

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