It is rare that any nation so completely dominates any one economic sector, but Greeks by all reasonable measures, dominate shipping.
Things have been tough for the sector of the last 24 months but no one is writing off Greek dominance.
Greeks will continue to enjoy their market dominance in the global industry, even if new faces come in and traditional family names evolve.
Today the world shipping fleet is worth about a $US 1 trillion and about 20 per cent of that, which makes up the backbone, is controlled by the Greeks.
But, two-thirds of the Greek owned fleet operates under cheaper flags of convenience.
In detail, Greek shipping manages 17 per cent of the international merchant fleet, 20 per cent of the international fleet in transporting dry cargo, and 23 per cent of the international fleet of tankers.
Shipping is also the second largest contributor to the Greek economy after tourism, making up about 8 per cent of local GDP.
It brings about 17 billion euros in foreign exchange to Greece’s economy, given its global pre-eminence. And the gritty port of Piraeus is becoming an even more important locality for shipping, rivaling New York, London and Singapore.
Naturally, the Greek shipping industry was booming until recently, as China and other developing countries demanded increasing quantities of grain, coal and iron ore.
But things have changed with the global financial crisis hitting the shipping industry hard and thus, reducing volumes and slashing freight rates.
The CEO of Aries Maritime, Jeff Parry said: “The crisis has impacted by producing very low freight rates in many shipping sectors”.
But fortunately most Greek ship owners paid down a lot of their senior debt when times were good.
Parry added that despite the fact that this crisis is worse than that of the 1980s: “Greeks are in a very good position to weather the storm. There are however a number of ships laid up around the world in places like Greece and Singapore, particularly in the container sector, because they can’t earn enough money to cover their operating costs.”
He went on to highlight that the shipping industry is beginning to see good signs and that there is an increasing interest in the market for purchasing assets for further trading.
Parry added: “Moreover, due to the credit squeeze, financing is not available to buy and sell ships and that creates confusion in the market.
Nevertheless, Greek ship owners are well placed due to their typically conservative position on debt and cash flow management.”
Parry, thinks that, “A number of Greek companies have been affected by the economic situation, but many have strong cash balances and proven business acumen so they are well prepared to weather the storm.”
Currently, no matter how tough things are, no one is aware of any Greek shipping companies in any real trouble who may be about to close their doors.
That is mainly because Greek ship owners have substantial cash generating ability, and quickly pay back bank debt if necessary, even if they can’t profit on the re-sales of vessels.
At the same time shipping is far from being monolithic. It has important sub-sectors that are impacted differently by differing catalysts.
Dry bulk shipping today is not nearly as profitable as it was over the last five years because rates dropped precipitously, but it will survive and rates are starting to trend higher.
One of the major problems Parry said was that letters of credits from banks were frozen meaning that many ships were just waiting around for the financing of cargo to be cleared.
“This was purely financial and the credit problem exacerbated the period of a cyclical decrease in business.”
In the container sector there have also been problems.
Many owners used cheap financing to buy super-sized vessels which have caused a substantial problem.
“The increase in shipping capacity coupled with the drop in container volumes, due to shrinking trade, has meant a cyclical overhang in the sector,” Parry said.
At the moment many ships are laid up waiting for better rates.
The tanker market has different drivers and is complex defying prediction because it is tuned to changes to the supply of vessels and oil production.
Parry noted: “It depends on how many ships are in the market at any one time as well as the supply of oil from OPEC production. Most analysts seem to agree that natural demand for oil will increase, and new regulation limiting single hull tankers will reduce the supply of ships.”
At the moment ‘contango’ trades are supporting the sub-sector and it appears that in the medium term prospects are positive.
One of the biggest threats to the Greek shipping sector is piracy.
This issue which is serious and is not just limited to Somalia, which has recently saturated the headlines.
Piracy has been an ongoing problem in the South China Sea and Indonesia, where the pirates are even more brutal than those in Somalia.
Nigeria has also been problematic.
All shipping companies purchase insurance, but it is an added horror for the crews whose arduous labour, judgment and skills are necessary for the sector.
“It’s hard work on the oceans as it stands, so the idea that you can be subjected to the threat of a rocket propelled grenade, or kidnapping, creates an added challenge,” Parry added.
Greek shipping has been around for centuries and it will no doubt be around for ever because of the Greeks’ natural affinity for the sea and their understanding of international trade and markets.
It is almost genetic and Greeks will continue to be the leading ship owners in future.
Parry underscored: “Greeks are among the most adaptable and have a keen almost intuitive understanding of shipping and the dynamics of its market”.
Moreover, Athens and Piraeus are becoming centres of excellence for shipping.
Many companies are moving from London and New York to Athens because they can hire highly skilled people locally and modern communications technology means there is no need to be in London of New York City.
Additionally, Greece’s local infrastructure and business culture have also improved dramatically.
The biggest challenge for Greece as a maritime nation is the danger of de-Hellenisation.
The question posed is do Greeks have the experience and expertise to maintain their world-leading role, in the absence of any unified and supportive long-term Greek maritime policy?
Parry thinks that: “There is a whole new generation of Greek ship owners who have a very good understanding of the historical role of shipping in Greece.
“They are working hard to continue their legacy. They are dynamic, smart and highly sophisticated regarding new regulations, technology and financing.”
The economy in Greece can take a lot of solace that this sector will continue to have a significant role in the future.
It appears that Greeks, with 2,000 islands and a seafaring tradition that stretches back thousands of years, are best placed to ride out this credit storm.
No matter what the problems, shipping is part of the Greeks’ DNA.