Why Greek shipping might struggle this century

The benign post-World War II conditions which allowed Greece to become the world’s top shipowning nation are changing. On the eve of Posidonia, lead columnist Andrew Craig-Bennett questions whether Greek dominance will continue much longer.

 It is too easy to think that “Greek shipping”, by which we mean the ownership of ships by Greek private companies, is “always with us” – after all, “Greek shipping” has been around on a large scale for well over a century and has moved quite smoothly from triple expansion three island tramps financed with mortgages to what we see today.

 I’m not so sure. I think that the global political, economic, and environmental issues that are just around the corner may be about to make life very much more difficult.

 Let’s start with what “Greek shipping” is not. It rather famously is not liner shipping and equally it is not bulk carrier or tanker chartering. It certainly isn’t “logistics”. It’s shipowning – the most romantic and the most fun part of the business of moving stuff by water. “Greek shipping” can extend, and has extended, to shipbuilding and ship repair and to port operations and to the many businesses that hang off shipowning, but owning stuff that you can walk up to and pat, to quote a prominent British shipowner of the last century, is what it is really all about, and there are two assumptions that go with the Greek way of owning ships which tend to pass unquestioned. One is that there will always be a market for ships and for the employment of ships – a market with a very low entry premium – and the other is that cross trading is always going to be easy to do.

 The Greek way of shipping flourishes under conditions that we now call globalisation

 To put those two points another way, the Greek way of shipping flourishes under conditions that we now call globalisation, conditions in which the barriers to trade by sea are low, and in which any ship can carry more or less anything pretty much anywhere. There is a specific unstated assumption that the world’s oceans are going to be policed by the dominant naval power in a way that is not hostile to Greek merchant seafaring enterprise. If we look back to, say, 1815 we can see that there have been two dominant naval powers – Britain up to 1939 and the United States from 1945 and both have been perfectly happy to have cross trading Greek shipowners around. Generations of Greek shipowners have been perfectly happy to base themselves in London and in New York, (or perhaps we should now say Greenwich, Connecticut) and to work out of those places.

 Things might change. First, the entry premium into shipowning might increase. It may become difficult for a new entrant to shipowning to get a start – indeed, many will say that this has already started to happen. Finance for small shipping enterprises is notably more difficult to come by whilst finance for big shipping enterprises seems to have got easier to secure.

 

Looking a little deeper, the business of finance has been changing. Is there anything that those dreadful Russian oligarchs have done with their doubtless ill-gotten gains that Greek shipowners didn’t do first with their doubtless hard-earned freights and S&P returns? No. There isn’t. The whole offshore world was first developed to benefit Greek shipping, and for as long as only Greek shipping was using it, nobody minded. But now that huge industries and giant corporations are choosing to pay the tax that they feel like paying, nation states with vast populations to educate, to defend and to care for are worried to see their tax revenues looking like the Cheshire Cat.

 The entry premium into shipowning might increase

 Nobody minds when Greek shipping copies the Cheshire Cat, leaving the taxman with nothing but the smile, but when most of the tax base does it, political leaders develop a sense of humour failure.

The benign conditions that allowed cross trading to develop may be coming to an end. As I write this, two Greek ships have been seized by Iran because a Russian ship with a putatively Iranian cargo has been detained in Greece at the request of the US. If Greece is trying not to be noticed, Greece isn’t doing very well at it, this week.

For now, trading conditions are set fair; we are enjoying a spell of really very fat cows, but as every Greek shipping enterprise knows, the thin cows will be along presently, and the thin cows may be accompanied, this time, by political weather which is decidedly “Winter, North Atlantic”, and the load line of Greek shipping enterprises should perhaps be adjusted accordingly.

Greece Posidonia

Andrew Craig-Bennett

Andrew Craig-Bennett works for a well known Asian shipowner. Previous employers include Wallem, China Navigation, Charles Taylor Consulting and Swire Pacific Offshore. Andrew was also a columnist for Lloyd's List for a decade.

Comments

Barry Parkersays:   June 3, 2022 at 11:32 pm

I think that these words from your excellent article encapsulate the dilemma: “…a market with a very low entry premium…”

Consolidation is in the air- it’s harder to be a “smallish” company, for many of the Greeks, but that part is not a uniquely Greek thing. And there are instances where big Greek companies are “the consolidator” ie getting bigger.

On the geopolitics- developments earlier this week w the tankers are upsetting, but, again, that may not be a Greek only thing- might affect others equally if their vessel is in the wrong place at the wrong time.

Very good article.

 

Anastassios Copitsassays:   June 4, 2022 at 8:30 am

A BOLD CRITICISM OF GREEK SHIPPING BY AN AUTHOR WITH REPULSIVE SYNDROME TO FREE MARITIME ENTREPRENEURSHIP.

Let me put you down to order of the Facts when critics in empathy are posted in a Maritime Publication on an oldest-sustaining Maritime Entrepreneurship of the Global seaborn trade to fulfil the Author’s internal repulse syndromes. We ought to reply on realities and facts:

Maritime is Global and Greeks go global with, or without “globalization” labels and policies.

If you are looking back to sea-dominance by the naval powers of the past, you must be praising Maritime to go Naval, back to the imperialistic Piracy times in today’s realities and you may need a psychological assessment.

Greek Shipping has proven floating and expanding above global political, economic, and environmental issues through the centuries when this has always been more difficult for others.

Contrary to what you are saying Greek shipping is all of what you say is not. It is equally Liner, Chartering and certainly Logistics.

Greek Shipping is not “romantic” and does not “move stuff by water” “for a just a fun” as you say. This “stuff” that you mention in your poor language, sustains the living of counties like yours and populations globally. And the Greek Shipping, despite being most complicated has been always a successful entrepreneurship.

Another invalid statement on Ship Financing you made. For your information Ship Financing goes with proven sustainability assurance and not with size. Amalgamations and mergers with “digital eyes” are modern “cyclops” with wooden legs without human capital and entrepreneurship.

And your reference to the “Wonderland cat”, attributes to childish dreams…

 

Johnnie Walkersays:   June 5, 2022 at 3:02 am

Without Greeks assistance, asian shipyards just would build low quality lifeboats! hahahahahaha!!!!

 Reply

YIANI says:    June 6, 2022 at 3:04 am

…you mean that he wud be paid by social security while now Greeks giving him food and money to spend in nonsense. However, you made my Sunday night…….hahahahahahaha