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1. This year’s results reconfirm that Greek shipping is going through a period of pronounced growth in its fleet and consolidation in the number of Greek owners.
2. Fewer companies by 20, down to 648 from 668, a 2.99% annual decline.
3. 25+ vessel fleets constitute now well over half of the Greek total in DWT terms (58.38%), and the number of the companies that run them has grown to 41 compared to 40 in 2014 and 35 in 2013.
4. The big are getting bigger and younger. The top category of 25+ vessel fleets aged 0-9 years keeps expanding significantly from 124,048,654 tons DWT in 2014 to 154,332,959 tons DWT in 2015 (up over 30m tons DWT or 24.41%). The companies that run them are up to 24 from 22 in 2014 and to 14 in 2013.
5. Over 1m ton owners constitute 76.7% of the total fleet, up from 74% in 2014 and 71.33% in 2013. Their number is now 68 from 63 in 2014 and 61 and 2013.
6. Overage fleets of 20 years+ are down again to 231, a reduction of 35 fleets in the last year. Since 2011, the overage fleets of 20+ years have fallen from 411 to 231, or by 44%.
7. Interestingly, 15-19 year old vessel fleets are up by 12, a rise of 13.95% since last year. In 2014 they had showed a decline of 10.41%.
8. The very young fleets (0-9 years of age) continue to rise. Their increase of 6.78% (189 fleets) is less than last year’s 9.94% increase.
9. Smaller companies (with 1-2 vessel fleets) continue to reduce. Since 2011, the total number has fallen from 350 to 262 (down 25%).
10. Over the last 18 years of Petrofin Research, the overall number of Greek companies has declined by 30%.
11. Whilst fleet consolidation in terms of the total Greek owners is still taking place, the overall fleet DWT size is growing fast and its average age is still falling (this year, from 13.25 to 12.73 years).
12. Despite the last 7 years of difficult market conditions, limited bank finance and bleak prospects for most sectors, the Greek fleet has expanded and it now stands at just over 16% of the world fleet (UNCTAD), making it the biggest worldwide. That commitment has been assisted by many joint ventures with private equity funds or between companies.
13. The above trends are expected to continue over the next year, with the number of smaller companies declining sharply.
Another 20 companies have left shipping or have merged, leaving 648 companies compared to 668
last year.
Graph 1
In this part of our research, where the composition of the Greek shipping company is analysed, we note that there has been an overall decline in the total number of Greek shipping companies since 2009.
Of course, the advantages of economies of scale have been instrumental in setting a long-term trend of consolidation in the number of companies whilst strongly supporting the bigger owners. The last 7 years, however, have been immersed in a most enduring shipping recession and continuing drying up of bank ship finance, except towards big clients. These pressures contribute to the reduction of the number of Greek shipping firms, especially among the smaller owners.
However, although at first glance this looks like a decline in Greek shipping, the fleet itself is
expanding fast, is getting younger and the larger owners are growing even bigger. These
4.55% MORE companies in 20082% MORE companies in 20092% LESS companies in 2010 0.5% MORE companies in 20115.77% LESS companies 20123.9% LESS companies 2013
3.2% LESS companies 2014
18.57% LESS companies in 199910.74% MORE companies in 20005.98% LESS companies in 20014.6% LESS companies in 20022.7% LESS companies in 2003
0.5% MORE companies in 20046.23% LESS companies in 20050.4% MORE companies in 20064.7% MORE companies in 2007
Number of Greek Shipping Companies in operation – 1998 to 2015
Fleet size : 16 -24 vessels - Group BNo of companies : 30 – Total DWT: – 41,441,992% of total of Greek fleet DWT : 12.62%
(2014:35,578,298 or 11.7%-2013:41,049,409 or 15% -2012:48,422,665 – or 18%)
Fleet size : 9 - 15 vessels - Group CNo of companies : 51 – Total DWT: 35,123,179 -% of total of Greek fleet: 10.7%
(2014:41,333,120 or 13.62%-2013:38,541,046 or 13.7%- 2012:3 2,081,880 or 12.17%)
Fleet size : 5 - 8 vessels - Group DNo of companies : 110 - Total DWT: 33,011,300 –% of total of Greek fleet DWT: 10.06%
(2014: 30,706,661 or 10.11% - 2013: 38,011,791 or 13.5% - 2012: 32,149,157 or 12.19%)
Fleet size : 3 - 4 vessels - Group ENo of companies : 154 – Total DWT: 18,312,022% of total of Greek fleet DWT: 5.58% (2014:20.023.878 or 6.6% - 2013: 16,777,631 or 6% - 2012:18,956,296 or 19%)
154,332,959
31,769,324
3,560,0911,958,805
2014
Fleet size : 1 -2 vessels - Group FNo of companies : 262 - Total DWT: 8,744,823) % of total of Greek fleet DWT: 2.66%(2014: 8,694,831 or 2.86% - 2013: 9.302.088 or 3.3% - 2012:9,186,494 or 3.48%)
34,257,561
6,800,078
358,614 25,739
25,393,654
8,772,819
381,507575,199
15,675,564
11,645,259
4,189,7131,500,764
8,544,955
4,911,903
3,191,616
1,663,548
2,952,106
2,090,411
2,210,098
1,492,208
2014 2014
1,854,471
2,235,9902,420,520
2,183,8508,014,426
5,844,405
4,184,617
1,980,430
15,816,33211,754,887
1,086,0622,049,380
2014
22,884,03916,638,934
700,690 1,109,457
2014
27,516,9787,683,472
316,111 61,7372014
124,048,651
38,133,483
4,864,804 195,450
Initially based on Greek Shipping Directory, Clarkson’s World Fleet Register, Newsfront Greek Shipping Intelligence & market sources
Comments: In the smallest 1-2 vessel
fleets, the oldest vessels of over 20 years
of age show a decline of 31.67%. The
youngest vessel section, however, show a
remarkable increase to 2,952,106 tons
DWT, i.e. an increase of 59.19%.
The focus of fleet renewal by the 3-4
vessel owners has been on increasing the
0-9 year old tonnage.
The 5-8 vessel strong owners of 15-19
year old fleets have increased by an
impressive 285.77%, reducing mainly the
20+ year old fleets by 26.77%. The
dramatic reductions in the prices of these
vessels have encouraged primarily cash
purchases of this age range.
The interesting events in the 9-15 vessel
fleets occur in the 20+, 15-19 and 10-14
year old fleets. These have slashed
practically by half. The 0-9 year old ones
show an increase of 11%. The whole
group is down 6.2m tons DWT.
Nearly 6m tons DWT have been added to
the 16-24 vessel fleet group. The over 20
year olds have almost totally
disappeared, and the 0-9 year olds have
increased by 24.5%. 24m tons have been
added to the biggest Greek fleet.
In the biggest 25+ vessel fleets, the
remarkable event is the increase by
1.8tons DWT in the 20+ age range. The
youngest fleets also have increased by
24.41% and the rest show a decrease
between 20-28%.
The hold of the 0-9 year old fleets across all fleet sizes has increased from 65.93% of the total of the Greek fleet to 73.47%.
Fleet size : 16 -24 vessels - Group BNo of Cos: 30 - 4.62 % of total of Greek fleet DWT:2014:26 cos or 3.89%-2013: 29 cos or 4.2% - 2012: 37 cos or 5.15%
Fleet size : 9 - 15 vessels - Group CNo of Cos: 51 - 7.87% of total of Greek companies: 2014:55 cos or 8.23%-2013: 60 cos or 8.7% - 2012: 54 cos or 13.3%
Fleet size : 5 - 8 vessels - Group DNo of Cos : 110 – 16.97% of total of companies2014:107 cos or 16%-2013: 117 cos or 16.95% - 2012: 113 cos or 15.74%)
Fleet size : 3 - 4 vessels - Group ENo of Cos: 154- 23.76% of total of Greek companies2014:166 cos or 25%-2013: 154 or 22.31% - 2012: 167 Cos or 23.26%
24
12
23
Fleet size : 1 -2 vessels - Group FNo of Cos : 262 - 40.43% of total of Greek companies2014:274 cos or 41%-2013: 295 cos or 42.75% - 2012: 312 cos or 43.45%
18
7
1
4
26
14
2
9
37
32
12
29 46
3229
47
38
33
52
139
2014
Initially based on Greek Shipping Directory, Clarkson’s World Fleet Register, Newsfront Greek Shipping Intelligence & market sources
Finance and capital opportunities are only available to large companies, which have invested heavily in modern eco vessels. Consequently, the big owners are pulling away from small owners, who are finding the going tough, unaided by the poor shipping markets and the dearth of finance and capital. Middle sized companies have had a mixed performance.
An additional trend has been the emphasis on young vessels. This has been observed in all size segments, even in those involving small owners. This year, a third of very small owners (1 – 2 vessel fleets) and nearly half of small owners (3 – 4 vessel fleets) based on DWT, demonstrate a clear commitment towards younger fleets (0 – 9 years old). A continuing development has been the relatively large number of new companies formed by the offshoots of large family companies providing younger family members with an opportunity to follow their own way. These companies may start in a small way but possess all the quality characteristics and commitment to grow over time.
There is increasing evidence that economies of scale have weighed heavily in the progress of Greek shipping companies. This has become readily apparent, especially over the last six years, as the markets have been largely poor and the consolidation trend has reaffirmed its course. It is interesting to observe that this consolidation process slows down or reverses during very strong markets, only to resume its trend, when markets subside.
US equity funds continue to shape Greek shipping. By co-investing in young vessels and newbuildings, these funds are propelling Greek shipping upwards. Their effect can also be seen in the size of Greek companies, as they assist them to grow and break out of their original size limits. A case in point is Star Bulk, which had been propelled to a colossus of over 100 vessels, by the actions of its main shareholder, Oaktree, as a result of its consolidation of its investments in shipping e.g. Excel fleet. Due to the difficult dry bulk and container markets, the outlook for such private equity fleets is uncertain.
There is a large part of Greek shipping that still relies on the support of the banks to survive. The cash flow generated from ship ownership has often been short of the bank’s requirements and, consequently, loan restructures continue to take place. Here, we must give due credit to the banks, which have shown patience, realism, as well as trust towards their clients. Nevertheless, some banks have started to apply strong pressure on their non performing clients to sell and such pressure is expected to increase.
The current order book consists of approximately 476 vessels (Clarkson’s World Fleet Register, October 2015), and 30 out of 103 owners have ordered 60% of these vessels. Those owners are considered the strongest in financial terms. Although newbuilding finance is becoming less scarce,
the cost of securing a bank’s loan commitment is high. It is estimated that above half of all Greek orders with delivery from 2016 onwards, remain unfinanced.
The continuing fall in dry bulk values on the one hand and the enhanced prospects in the tanker markets on the other, may signal a shift by Greek owners towards the tanker and container markets. Although, shipping equity funds slowed down their involvement in the last 2 quarters, their underlying interest in Greek shipping remains unaffected and they are simply looking for better investment opportunities. At this time, a dichotomy in owners’ sentiment has developed. Although, privately most owners are concerned over the outlook of the shipping markets, due to the effects of the order book, the oversupply of vessels, as well as the effects of international conflict and trade restrictions, their appetite for newbuilding orders and vessel purchases continues. The only explanation seems to be that large owners believe that such investments represent long term good value for money and that a shipping recovery may not be that far away. It appears that the Greek economic crisis and threat of higher taxes has so far not adversely affected Greek owners’ expansion plans which may materialize from within Greece or outside it.
We wish to point out that unlike in previous cases, where wars, earthquakes etc. brought about a rebuilding boom, the recent conflicts in Iraq, Afghanistan, Syria, Libya, Ukraine etc., have not subsided and these areas represent trade-poor countries with little activity. International trade, heavily hampered by China’s financial growth showdown, is affected by the current world wide sentiment of insecurity and it is, therefore, very difficult to predict whether we will return any time soon to the older patterns of cyclicality with strong international trade growth opportunities. A greater focus on solving these problem areas, as well as reducing trade restrictions and embargos is required for international trade to grow, which is a prerequisite for a sustained shipping recovery.
Lastly, we envisage that the Greek fleet will continue to grow but at a reduced pace, on account of the slowdown of new orders and the postponement and delayed deliveries of existing orders. Due to the adverse economic, financial and political condition, it is expected that the consolidation of Greek shipping shall continue at an accelerated pace.