Greek Shipping Competition

classical Shipping CompetitionIntroductionDuring the 20th century classical f ar eventually essential as one of the most competitive romanceers globally. Grecian ship possessers managed to establish their record as dominant players based on a well- mental synthesisd position mix that has supported their efforts throughout the long time. A variety of studies has been developed aiming to define what precisely supported classical owners to build this successful entrepreneurial structure and which situationor allowed them to obtain and live the combat of the classical shipping.According to M. Porter competitiveness.The definition for the competitiveness of Hellenic shipping has been studied by a respectful number of mostly Grecian academics. The majority of the studies, focused primarily in specific spheres (e.g. dry bulks) or factors (e.g. classic shipping network) as to prove the competitive improvement of the Greek fleet. However, the aim of this paper is to evaluate if Greek shipping sack up preserve its competitive character. Thus, from the point of view of the writer, it depart be more realistic to analyse a place of factors and sectors that contribute to the success of Greek shipping.It would not be simplistic to say that at the end of the sidereal day the competitiveness is defined by profitability. (2) From the referred range of studies and publishes, the writer believes that the competitive strength Greek shipping companies is summarised into measured selection of Business (cost control) and investment (timing) strategies. (1) Thus, in this paper we are going to investigate to what extent Greek shipowners will be able to sustain their competitiveness in the long-run based on the higher up principles. Specifically, the paper is about to concentrate on analysing the fleet on the basis ofManagerial organise ( air schema) and investing (timing) strategy.Once again, the aim will be the overall evaluation of the long-term prospects of Greek shipping to sustain its competitiveness.Fleet AnalysisGeneral InformationHistorically, shipping has played crucial role for Greek hatful and it has characterised some of the most important moments of their history during the Persian Wars and the battleship of Salamina, in the Greek revolution against whiff Empire in 1821, the Balkan Wars and the World War I the Greek ships played significant role and abnormal the citizens of the Greece and (in some occasions) the global status quo as well. send off 1, Source BCG Impact assessment of Greek shipping on Economy and SocietyHowever, in our days when we refer to the Greek shipping we mean the not bad(p) presence of the Greek shipowners to the global market. This presence was firstly established in dry bulk and the tank ship (oil, products) sectors but lately we go for squiffy signs of diversification into more sectors such as the container ships and the gas tankers.statistical AnalysisIt is better to set clear, in this paper when we refer to the term of Greek shipping we rattling discuss the Greek-controlled ships irrespectively of the companys headquarters and the flag at a lower place the ships sail.(3) The reason of this choice reflects on the succeeding(a) table which describes the military position of the owners to flag out their ships. watch 2, The 35 countries and territories with the largest owned fleets, as of 31st January 2013 (DWT)Thus, jibe to the UNCTAD (2013 Report), only the 22.3% of Greek ships sail under the national flag when the remaining 77.7% sail under world-wide flags. Hence, for the aim of the paper we will analyse the wider Greek-owned fleet instead of only focusing to the ship that are registered in Greece. Under that basis we can present the personifying statistical figures (which will be commented on the following part of this paper)The Greek-owned fleet is consisted of 4573 vessels and managed by 690 companies. externalise 3, Number of Greek-owned vessels, come 2013 Petrofin research by Ted Petropoulos, October 2013The 65.07% of the companies have less than 5 ships while fleets with 25+ ships represent the 5.07% of the total.Figure 4, Fleet distribution of Greek Companies, SOURCE 2013 Petrofin research by Ted Petropoulos, October 2013The average age of the fleet has declined recently and at the end of 2013 was about 14.05 years.Figure 5, Average age of Greek fleet, SOURCE 2013 Petrofin research by Ted Petropoulos, October 2013Greek Orderbook (end of 02/2014) corresponds to 496 vessels (approximately 11% of existing fleet) of several(prenominal) types.Figure 6, Type of Orders by type, SOURCE SIN databaseThe majority of the unexampled buildings have been ordered in Chinese shipyards while Republic of Korea follows with a slight differenceFigure 7, Greek Orderbook by artless of builder, SOURCE SIN databaseGreek shipping status AnalysisManagement structureCompany StructureAs it has been referred, there are 690 shipping companies (Petrofin) main ly under tight family management. In Figure 4 we observe that the majority of the Greek companies possess a small fleet of ships. This can be a result of taxation strategy or mainly can be driven by the attitude of shipowners globally to not risk the viability of their whole business if one of their ships faces problems with regulation or capital cost.In the case of Greek shipping, the fragmentation of the market probably takes place for an extra reason the majority of Greek shipping companies are family companies. Thus, there is a tendency that, after some years of experience in the family business, some members decide to build their own start-up business. This effort is supported by the knowledge gained previously and to the usable capital. However, this attitude may contribute to the pluralism of the market and to promote Greek entrepreneurship but at the same sentence may trigger problems for the overbold companies which sometimes struggle to survive due to market reasons. Mo re importantly, however, the new firms may be treated as undermining efforts against the family operations (4 Theotokas). Furthermore, it should be mentioned that small firms may be forced out of the business if they cannot attract sufficient financing.(5)The most significant advantage of the traditional form of Greek shipping companies is the philosophy of cutting costs passed from one generation to other.(6) However, family members ought to be quite qualified to realize their duties and not placed in businesses exclusively for reasons of heredity. (7)Another significant factor which has come under terrific debate is the listing of Greek Companies to exchange markets. At the moment only the 6% of the total is listed, mainly in foreign exchanges (8,Petrofin).Listing can be used as a way of financing. However, Greek companies attempt to find the ideal chemistry between a family-run company and a public outlet (9,Tsakos). As a third-generation shipowner A. Martinos quotes a stock listed company has no head but a family company can move quickly with decision and authority indicating a factor of flexibility for the Greek companies.People (human resources)The positioning of the Greek shipowners has been outstanding throughout the years. The reason behind this success can amongst others be the human factor. The fact that the first generation shipowners had been in the sea gave the sophisticated know-how to the industry which has been transferred throughout years and generations.(Theotokas). The referred know-how enables the ability to denigrate costs and the dare to invest when the market is low. Particularly, the ability of achieving good timing and good choices has allowed the Greeks to perform dainty the asset play, to turn negative momentum into fleet expansion and to obtain market share and broad capital.(A fleet for theTHAN 10)Investment StrategyOrderbookThe Greek Orderbook is one of the largest at the moment and as it is illustrated in Figure 6, there have been investments to multiple sectors. Specifically, we comment on the most interesting investmentsDry BulksGas TankersContainers financial backingWhat is the propeller for a ship is finance for a shipping company.(Petropoulos 11)Greek shipping has been significantly affected by the debt crisis which hurt violently the credit system and especially Greek banks which has been funding shipping business for decades. However, Greek shipowners managed to finance the modernisation of the Greek fleet (Navigating the financing storm 12) as it is presented in Figure 5. Obviously, once again Greek shipowners followed their tradition into anti-cyclical investing.During the period we are going through, investments in shipping have been mitigated. While investors around the world were selling vessels, Greeks were buying second-hand ships and they were placing orders to renew the fleet cheaply.(John Psychas 12). Probably, Greek owners took advantage by the capital gathered from previous succe ssful years. Moreover, the recent years they have been using a crew of traditional and latest methods of financing, following sometimes hybrid solutions. (Syriopoulos 13)Another way of financing is listing. The majority of Greek shipowners realise the advantages of listing but seem reluctant to dare the change. It seems that this attitude is at last other point of strength for Greek shipping as traditional companies are based in their own capital to invest instead of raising financing in stocks market.( John Psychas 12)It is important to be highlighted that during crisis Greek shipping created a major ally which is the Chinese Banks which they gave financial motivation for construction of ships in Chinese shipyards.(Petropoulos Shipping and ship finance 14). Chinese lenders decided to promote local shipping industry and Greek shipowners took advantage of a $10 billion fund for funding Greek orders in Chinese shipyards under competitive terms and interest (Bardounias 15). This tren d is also illustrated in Figure 7.Conclusions and RecommendationsIt seems that once again Greek shipping followed the traditional attitude of anti-cyclical investment which can probably guarantee long-term competitiveness in terms of capital cost. Specifically, in the dry bulk sector Greeks will be able to play the asset game which has supported their success so far. The renewal of the whole fleet is a strong signal of an operationally healthy industry for the years to come.However, the exposure of the owners to the container ship and gas tanker sector is a question mark which is not easy to be answered. If the market in these sectors will follow an upward in the near future then it is contingent that in a few years we will discuss the diversification of the Greeks as another one outstanding strategic positioning. If not it is possible that this decision will be a very costly one and the diversification strategy will probably be abandoned in the future.The human factor will continu e to be on the forefront of the Greek fleet as the heritage of the market sense seems to have been successfully developed by the third generation of the shipowners families. On the contrary, what has been built throughout all these years has to be protected. Hence, the new generations have unavoidably to be well-educated and strict evaluated as to be able to manage the business. Nepotism has to be scrutinised I order to guarantee evolution and success.The long-term competitiveness of the Greek shipping can be a reality under the optimum proportion of low-cost operation, sustainable management of traditional family businesses, targeted strategy towards financing and repeating of asset play. The diversification into new sectors can be the next competitive advantage of Greek shipping under the condition that the shipowners monitor the market closely and are adequately on the table and adoptable as to realise the different function of the multiple sectors.