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Panos Laskaridis’ full speech on Greek Shipping’s importance

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Panos Laskaridis about to receive the commemorative plaque from General (rt) Lambros Kazakos

Dear viewers,

Yesterday we promised you to bring you the entire speech of Panos Laskaridis, which he delivered at the War Museum of Athens last Monday and we covered under the title: “Panos Laskaridis’ unique presentation on the importance of Greek Shipping”; here below is his speech in free translation:

Mr President, Distinguished Guests, Ladies and Gentlemen,

As I begin my speech, I would like to thank wholeheartedly both the Association of National Defence Staff as well as the Hellenic Maritime Museum for giving me the opportunity to speak to you tonight, a period of misery and gloom for our country, about a subject which is a matter of pride and immense satisfaction to all Greeks and to me in particular, and all Greeks living and working in the world of mercantile shipping in Greece today.

It is even more satisfying because this event tonight coincides with the biennial Shipping Exhibition of Posidonia in Greece which is not merely the largest display of shipping related equipment and machinery globally, but is, very importantly, a worldwide gathering of everyone involved in and with shipping and gives a perfect opportunity of the world’s owners and all of shipping stakeholders to meet in Athens, discuss and debate world shipping’s current problems.

I would also like to highlight in advance that the views expressed in this speech tonight are not necessarily those of the Union of Greek Ship-owners to which I have however the great honour of being the Secretary, nor those of all owners or representatives of Greek ship-owners, however you will find that these views are expressed very often by both groups above when discussing Greek Shipping in its entirety.

The President of the Hellenic Maritime Museum has described already very eloquently the passage of Greek Merchant shipping through history – a fascinating story to tell!

I will simply repeat what is often said, namely that ”Merchant Shipping is in the Greeks’ blood”. This statement by itself does not really say much, but let us remember that Greeks were the merchant traders and carriers of trade since time immemorial. Since the time of Classical Greece, going on to the  Hellenistic and Roman periods and Alexander’s expansion in East Med  and beyond, to the Roman times, to the Byzantine era, leading on to the times of the Great Ottoman Empire .

During the second half of 18th century Greek Ship-owners have been allowed to fly the Russian flag on the basis of conventions between Russia and the Ottoman Empire and have thus been able to become proper owners of their ships and commence the legend of the Greek Merchant Shipping which later became the naval force during the Greek War of Independence and has spread later abroad, principally in the Black Sea ports and England and has continued to grow and develop over the last 180 years into what is known as Greek Shipping today.

But what is makes, ladies and gentlemen this subject so dear – certainly to me and my colleagues?

It is the simple fact that it gives us the opportunity to speak about a different Greece. A Greece that stands tall, first between the first and bigger than the superpowers of this world, larger than the U.S.A, Europe, Japan and China. A Greece where these superpowers in the international shipping organizations wait for Greece to speak first, in order for them to define and decide their own shipping policy. A Greece whose Shipping Ministers (when they existed) and the Greek representatives speak first and with a louder voice than anybody else. A Greece which in Merchant Shipping is 60 times more powerful than the country of Greece among all the other countries in the world, based on a comparison of the Greek and the world G.D.P.

Completing this introduction therefore I will invite you to repeat inside ourselves and reflect on the importance of the simple statement “we are the first in the world”.

So what is ladies and gentlemen Greek Shipping today?

Greek Shipping represents today approximately 15% of the world’s transport capacity in all types of ships. It represents approximately 20% in the two largest and most important markets of dry and wet cargoes which move the vast majority of the world trade. It also represents 41% of the total European transport capacity and, as said before, 20% of the world’s tonnage in dry and wet ships is in Greek hands.

Greek Merchant Shipping today consists of approximately 3.760 ships with a total Deadweight of 260 million tons and a total  capacity of 156 million gross tons which are registered under more than 15 flags. The fleet under Greek flag consists of 44 million gross tons and shows over the last years a small decrease in numbers but an increase in capacity. The Greek owned fleet consists of the balance approximately 2.900 ships of approximately 113 million gross tons and are registered in many other flags, amongst which some European flags like Cyprus and Malta and others which we used to term in the past as flags of convenience.

Which is the main reason for the Greek owned ship not flying a Greek flag?

It is by a big margin the lack of Greek officers. To a much smaller degree it is due to slight difference in running expenses which however is easily compensated by the difference in the status of the Greek flag and the respect it enjoys globally.

Greek Shipping is controlled and managed today by approximately 750 small, medium and large shipping companies and despite the fact that there exist many large companies, I believe that it is appropriate to emphasize that,  a large majority of our fleet is controlled and managed by medium size and many small size companies. From this total, approximately 70% of this fleet is managed by family companies whilst the rest 30% is controlled by companies listed in various stock exchanges, mainly in the New York Stock Exchange.

There is another fortunate development on the Greek Merchant fleet during recent years: contrary to what was happening in the past, today’s Merchant fleet has radically changed its profile in two main directions:

Firstly, the average age of our fleet, which in the past was substantially higher compared to the world’s average, has now improved so much so that the Greek fleet is today substantially younger than the world’s average age. (Approximately 10 years vs. 12 years).

Secondly, the Greek Merchant fleet contains today a much larger variety of different ships types, such as container ships as well as ships of cutting edge technology and huge cost like vessel’s carrying Liquefied Nature Gas (LNG), Oil Drilling Platforms and others.

What are the reasons for the great success of the Greek Merchant Shipping?

In my opinion these are three:

A)        The fact that Greek Merchant Shipping does not operate in and does not depend on Greece and the Greek state, like any other economic activity, but operates and competes globally under conditions of fair trade’s ruthless competition, a fact which has helped to develop its capabilities to the utmost.

B)        To the incomparable quality, ability and loyalty of the Greek Seafarers.

C)        To the perseverance, passion, discipline, responsibility, insight and business ability of the Greek Shipowners and the personnel of the Greek Shipping Companies.

Which are in general terms the beneficial effects of Greek Shipping to our country?

First of all, the fact that Shipping adds status, respect and special importance to Greece in the overall global perspective, as I have previously outlined.

Secondly, because approximately 250, 000 people in Greece depend directly or indirectly on shipping and because through shipping we preserve and maintain a high value knowhow for the benefit of our country.

Thirdly and most importantly, because it constitutes the main contributor of Greece’s Foreign Exchange inflow since in the past many years it contributes between 15 and 20 billion Euros to the National Economy, more than tourism and comparable to the entire Greek exports.

Fourth, that in recent years, the Greek merchant shipping has contributed, if not exclusively, for the establishment of  Piraeus as an international shipping centre, which brings together the presence of the international shipping community and all support businesses, industries and services of shipping as well as a very significant percentage of added value; consisting of various sectors of shipping- banks, maritime lawyers, marine insurance, wreck/salvage, adjustors/settlement agents, brokers and charter services and purchases, suppliers, repairers and many other industries which together make up what we call the business cluster of shipping; great benefit for our country.

However, Greek Merchant Shipping doesn’t only have a great significance and benefit for Greece. The Greek shipping industry is of great strategic importance to the smooth, transparent and efficient conduct of world trade and global growth and prosperity. The European Union and the Western world in general, know that they can rely on an efficient, effective and, importantly, independent mechanism and portability, not subject to other strategies or policy choices and influences, only the effective and successful implementation of a transportation project. This is Greek Merchant Shipping, considering that Greece does not control cargoes or is engaged in global commerce strategy and controversies like the rising forces of the Far East; nor is subject to pressures or dealings with dependencies, but is involved with and an effective and transparent manner in global transport of goods for the benefit of world trade and world growth. It is very gratifying that both the European authorities and the U.S. fully recognize this positive contribution of our merchant shipping.

What is the current state of Greek merchant shipping?

We are experiencing a period of low freight market and ship values after a period of several years of very high market rates in recent years till the end of 2008. At the same time we are passing a very difficult period in terms of ship finance due to the known problems of Global and Greek Ship financing. At the same time though, we are investing during a period of low values as mentioned previously and therefore major investment opportunities in new building ships exist, considering also that shipbuilding technology is constantly evolving with new types of economic and eco-friendly ships which today offer significant advantages in cost benefits and environmental efficiency. As a consequence of all this, prudent shipowners won during the good times without extending their risk with expensive newbuilding orders, but made sure to maintain adequate liquidity and reserves, which they can now take advantage of better opportunities in this crisis and to overcome the crisis which is inevitable, until the shipping market “climbs” back on track as it has done so many times before.

What are the problems and challenges facing the Greek merchant shipping internationally and in Greece today?

In the international arena it is no different from the challenges facing Europe and worldwide shipping. Shipping is an international and global trade and that is the only way to deal with and address these problems.

These problems require international solutions to global trade and only the International Maritime Organisation (IMO) can cope and adjust in ways respectful to all concerned parties. Regional and local regulations are against the interests of a global transparent and efficient shipping industry. Such problems are the problem of emissions and the problem of carbon dioxide, piracy, various international treaties and conventions on liability and ship owner liability, criminal and other liabilities of a vessel, crew and owner in cases of accidental pollution, and more. It is worth to mention in particular the scourge of piracy. The Greek State had until recently been in constant presence in the NATO/European force known as  Atalanta with the use of a Greek frigate, but as of recent it was retired/replaced due to the Greek economic crisis. The issue of piracy is not addressed only in a military way – especially by the major powers (and the U.S.) treat same, even as “interdiction” civil event and not as a “war event”. But it is impossible to have only a military response to piracy. This should be largely completed in compliance with best practices (Best Management Practices) and the use of armed guards on board – which was passed as a law a few weeks ago by the Greek Parliament.

In Greece, shipping has been in trouble over the last 2.5 years by an absurd and unreal situation. Various obsessions, political distortions and bigotry led to the dissolution and refounding of the ministerial/administrative body of our industry, YEN (MMM*), an institution that operated over 60 years with great success.

It remains to be seen what will be the decision of the new Greek government, by all the political parties/players – and this is the amazing facet, that it is strongly supported by all parties; shipowners as well as the support industries and the marine related workforces  – to re-establish the Ministry of Merchant Marine which will necessarily include the Hellenic Coast Guard.

Let’s talk now with more details on the real contribution of our industry in the Greek Economy.

In principle, this contribution consists of the individual contributions of our maritime shipping, coastal shipping and ports. However 85% of the total contribution emanates from ocean-going shipping and only the remaining 15% from coastal shipping and ports service sector, without implying that we should ignore these latter sectors and their contribution; especially if combined with a special significance for the internal situation in Greece and her insular areas.

The importance of the Marine Economy revolves around three economic cycles. The rules of the direct contribution, the second cycle in support services (what we call a Shipping Cluster) and the third concerns the wider economy with inductive supply resulting from the first two cycles. Particularly the issue of a cluster is of great interest and effort should be made to make Piraeus even bigger and stronger centre of international shipping and shipping services such as shipping banks, brokers, sale and purchase brokers, insurers and insurance organizations, average adjusters, maritime law firms and others.

Finally, the broader impact of our industry grows in investment in other sectors too, as well as providing important social and charitable work.

It is necessary at this point to make the fundamental distinction between the financial offer of the maritime industry in the Greek economy in relation to one of the areas that offers to, commonly referred to as the main if not the only one, that is the Shipping contribution to the external balance transactions using the surplus balance of payments. I will return to this later.

The economic impact of the Marine Sector to the Greek Economy (the first of the issues I mentioned above) is estimated at around 13.5 billion Euros annually. This amount consists of 7.6 billion as a direct contribution, as well as consisting 2.8 billion from the support services and 3.4 billion from inductive benefits, payrolls and income other than direct benefits for the National Economy.

The bulk of the direct benefit of our economy goes mainly to payrolls/wages of workers, a smaller share to that of fuels and lubricants purchased in Greece, a small percentage of maintenance and repairs and the remaining amount up to 7.6 billion in miscellaneous costs.

Note that the contribution of shipping to the Greek economy represents about 6% of GDP (data of 2010) while the recession is estimated that at the end of 2012 will amount to 7% of GDP.

The second major area of the marine derived economic contribution to the GDP is from balance of payments from the services in part of the overall external balance of payments of Greece. It should be noted that in the last 10 years in Greece’s balance of Payments – derived from shipping, was estimated at about 140 billion euros i.e. (2010 prices) about 61% of Greece’s GDP.

It is no exaggeration to note that in the last 30 years Shipping related foreign currency revenue into Greece was in excess of one and half time that of the entire Greek GDP. But take note that although the last two years the currency has been somewhat restricted because of poor shipping markets, in recent years the average was more than 13.6 billion euros a year and with an increasing momentum.

This amount should be compared with the tourist derived revenues. The tourist related revenue is estimated around 10.5 billion euros in monetary terms. But it is very important to emphasize that while obtaining of tourist derived revenues, Greece must invest in infrastructure (ports, airports, roads, communications, etc.), issue debt and take on non-risk return on those investments, and as a contrast,   the maritime trade has none of these defects, i.e. without any liability to the state and at no charge.

Also, it is important to compare this amount with the revenue derived from all of Greece’s exports of around 20 billion euros annually.

The contribution of Shipping to Marine derived jobs is also very important.

An estimated 38 to 40, 000 are directly employed in ocean-going shipping and coastal shipping approximately equally distributed to ships and shore based offices. About 30, 000 people are employed indirectly in support of Maritime service sector as mentioned above, and about 18, 000 are employed in other sectors that create jobs and multiplied in an inductive manner.

This means that approximately 90, 000 people employed in the Shipping and Marine related sectors thus estimates that a total of approximately 250, 000 persons through their respective households are dependent on shipping.

It is good at this point to emphasize that the jobs of the Shipping and Marine sectors are highly value-added and considered ‘niche’, due to the fact that they consist of jobs that are very high-salaried in comparison to those of the average Greek employed in the non-shipping entity of the Greek Economy. Thus the importance of these niche jobs is higher than the simple numerical ratio.

Another very positive point around the shipping sector is that it creates employment in Greece; Greek shipping expertise is sought globally as the Shipping world recognizes Greek leadership. It is therefore evident that the value of expertise in our country makes Greek Shipping the largest and best in the world.

Let us now turn to the overall impact and capital investments in the shipping and shipowning beyond the Seas to other key sectors of the Greek Economy.

Firstly, in the related fields of energy, transport and construction – just mentioning Olympic Airways, Aegean Airlines, Greek Petroleum and the entire Shipbuilding sector in Greece today is certainly a huge problem.

Especially for the shipyards, it would be useful to add the following general comments: We must distinguish shipbuilding in two categories. Shipbuilding yards where the Greek cannot compete today in any way with the shipyards in the Far East. They can only build naval ships or specialised vessels and those are with high costs due to very low productivity.

The other sector which in Greece has been great in the past and can also see great success in the future, is that of the ship repair sector, what is generally called the Perama ship repair base. The expertise and technical capacity of the Greek repair teams is very high but this area still suffers from unbearable trade unions and thus political influence, and as a consequence there is no confidence to bring the ships in Piraeus and Perama for repairs.

Banks and financial services (Eurobank, Emporiki Bank 1st Bank, etc.). In tourism, where the shipping emanating capital investments were too many and too large. There are many examples which are very well known and very important. In many other areas we also find large and significant investments that derived from maritime invested capital.

It is worth mentioning the huge investments activity in the field of land development in real estate and their promotion.

Finally, I come to the last sector in which Shipping contributes to, that of community and welfare service.

This area is divided into the activities of a series of non-profit foundations, shipowning entities such as the Union of Greek Shipowners and the field of philanthropy by individual representatives from Shipping derived capital.

The total contribution of these non profit foundations/ institutions for the social welfare in recent years is valued at approximately 3.7 billion. The contributions of large charitable foundations are truly impressive. Who isn’t familiar with the work and contributions of the Niarchos Foundation, the Latsis Foundation, the  Eugenedion Foundation, The Onassis Foundations and so many others.

The contributions of all these foundations in the field of Culture, Education, Health etc., are amounting to several hundred million euros per category.

I will not dwell on this because I know that all these and many important foundations do not want and do not require special mention and praise for the tremendous work they do.

What could be further contributions of Greek Shipping to the Greek economy?

Firstly, to create more jobs in the entire related maritime, marine and the derived service sectors. Already in recent years, and due to the crisis, there is a large influx of young people to the marine and seafaring professions, especially young people with good qualities and educational skills.

Here the need for state intervention and an ambitious investment upgrade of maritime training and infrastructure is a must in order to move forward in any way possible in this direction. It is a known fact, that these are very high-paying positions in relation to other shore based employment.

The ability of the Greek mariner who was the main factor behind the extraordinary flowering of Greek shipping has not disappeared at all today. The knowledge and seamanship of the Greeks can easily be continued for future generations as well.

If the constant flow of new seafarers is discontinued then the problem will be multiplied. The Greek flag will shrink further. The jobs will be reduced even further. The staffing of the shipping companies will shrink and eventually disappear as most  shipping executives are former seafarers of the Merchant Marine and then the welfare fund; NAT (Seamen’s Pension Fund), will be further  reduced and discredited.

As a consequence, the valuable foreign exchange inflow will leave Greece and be transferred to foreign seafarers and officers -all together this will not constitute a pleasant prospect at all.

For the ship repair sector/industry I spoke previously. The technical potential of Piraeus (what we call the “Ship repair Zone of Perama”) has a very high level of expertise. But it suffers from disorganization, excessive unionization with unbearable consistency. If circumstances were different this sector could utilise and undertake huge and complex repairs, much higher in derived revenues than those now offered in neighbouring countries, especially Turkey, but at much lower prices.

The reconstitution of the Ministry of Mercantile Marine, as a one-stop service on matters of shipping, is long-standing demand of the shipowning community but certainly in the previously existing format that is integrated with the Coast Guard. The two previous eliminations of the ministry and without the re-establishment of the Coast Guard caused enormous damage to Greek shipping interests and the overall presence and projection of Greek shipping abroad.

A full and without restriction abolition of coastal shipping cabotage (already voted almost in a convenient format and is now voted as a law of the State) must be accompanied by serious and consistent ports policies in order to clear the way for the planning of major cruise lines calls, to include Greece in their schedules that can embark and disembark passengers from the first and last ports, i.e. avoidance of cabotage.

Perhaps from 2013 we can see a rise, if conditions are stable and friendly towards the cruise sector.

Before I finish I would like to mention a few words for coastal and inter island shipping, cruise and our ports.

Coastal and inter island shipping is in decay with huge losses and shrinking schedules.

The immediate requirement is absolute compliance of Greece with European regulations that have remained dormant for 15 years due to purely political reasons and politicking, assisted by a great politically influenced union and their invasive and abusive behaviours.

The Greek cruise has died and the last Greek cruise operators has disappeared just recently.

The standards and requirements of the Greek flag are so absurd and excessive (particularly on the manning compositions) that not one ship owner will consider a Greek flag for their cruiseship today with the present status quo.

We are shooting ourselves and have destroyed a sector that was once flourishing but now simply does not exist anymore.

I would like to conclude with a reference to investment by Greek shipowners. As you very well know, the investments in Greece in the last few years are negligent if not zero.  However when a small investment is made in Greece of even a few million euros, the fact is that same are celebrated by government and politicians with ridiculous fanfare and ribbon cuttings. However, the same cannot be said when there are the many tens of billions of dollars invested by Greek shipowners to build new ships or purchase second hand vessels in recent years.

However it must be noted that this is the way of course for the improvement and renewal of the Greek Merchant fleet to maintain its leadership in shipping and remain the Global leader in Merchant Shipping.

Ladies and Gentlemen,

Perhaps the most important contribution of the great Greek Merchant Shipping in Greece and its economy is intangible and for this reason cannot be easily measured in euros. And this is none other than the realisation that there is no reason that the Greeks cannot take the lead in any field. The example that with hard work and perseverance, but in conditions of fierce and relentless competition, there is one area the Greeks thrive in. That there is nothing impossible or strange in this and that proper planning, hard and continuous effort to compete with the best may reserve to the Greeks other firsts too. And this is especially important in the present miserable days which our nation is going through.



Mr President,

If there are any comments or questions, I am at your disposal.

Finally, let me conclude by quoting an excerpt from a speech relating to merchant shipping of an important military personality:

“The seas in the course of history, played a very important role for the welfare and security of our state. The state that have the ability to use the seas basically for defence, trade and national interests have managed to remain upright, defending forces in every period of history. It is unthinkable to become a local or regional power among nations without having a strong vision that relates to maritime sovereignty. “

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