Craig’s Post-Posidonia Ponderings

Take-Aways:

• Owners are grateful to be still be in the game, but sources of finance limited.
• Ironically, they blame cheap finance for the over-ordering.
• Hidden stresses – the lowering of opex is breeding poor maintenance.
• Transparency in the shipping markets is being driven by players from outside shipping (see earlier blog posts on the Orange Sofa and VesselBot seminars).
• 125 international and Greek press and media attended Posidonia 2016 (we have obtained the list).

Seminars Attended:

• Lloyd’s List Intelligence Briefing
• Capital Link Shipping Forum
• Orange Sofa
• VesselBot

Posidonia Sentiment

The sentiment of the 2016 edition of Posidonia was one of muted celebrations by the survivors of what is turning out to be the longest shipping recession in living memory. Indeed, “survivor” may be too heroic a term given that most observers blame the owners for over-ordering new ships, and thus prolonging the recession. However, there is also a lot of anger toward the EU (i.e. Germans) and its proposal to tax Greek ship owners’ offshore earnings.

Blame Game

Ship owners blame the banks and private equity (PE) for tempting them with cheap money to order ships they didn’t really need. One owner wryly observed that PE and other new finance providers thought they could learn shipping after a few meetings. PE was treated as sheep waiting to be shorn of its money, and now PE’s expected 40% return on investment is just a dream, it is trying to exit an illiquid market. The remaining banks in shipping claim to have no money for second-string owners, but competition is intense to lend to the top tier owners. However, according to Norwegian bank DNB, deal-flow in 2016 (ytd) is down 50% on 2015. Bankers feel consolidation among the liner services and containership owners is inevitable. Despite the fragmentation of the dry bulk industry, there will be consolidation among the top tier owners, too, according to bankers.

Owner Feedback

On the owning side, there is said to be a split in the dry bulk market, consisting of those ships that are fixed (working), and those that are not. One dry bulk owner described how three years ago the required opex level for his Handies was USD 8,000/day. Today, by reducing crew from 22 to 19 people and / or putting more cadets on board (and other savings), opex has been shaved to USD 4,000/day. But there are risks, and he related how his representatives inspected a Chinese-built, 2008-built Supramax, with a view to purchase. Maintenance on the vessel had been minimal, there was rust everywhere, and she was only fit for scrap, in the representatives’ opinion.

 

Posidonia Quotes:

“We Greeks are happy with low returns…you need to know how to play the game… it’s about cash flow.”

“We treat ships like family members”

“What would I buy now? A seven-year old ship, every time.”

“Germans know as much about shipping, as Greeks know about car manufacture!“

“Shipping is a stable industry…in that it is always unstable!”

“…the US exporting democracy ruined economies in the Middle East.”

“…shipping is not a team sport..”

“We have to look at the banking cycles. In five years’ time, there will be new faces [in the banks], and new miracles.”

“Greece is the leader in shipping in Europe. But instead of examining why and copying, the EU is trying to destroy (Greece).”

Posidonia Exhibition

According to the organisers, the Posidonia exhibition itself was visited by over 22,000 shipping industry professionals (a 15% increase on 2014). There were more than 1,800 exhibitors from 90 countries deployed across 40,000 sq. metres at the Athens Metropolitan Expo. The next Posidonia event is scheduled to be held between 4-8 June 2018.

Parties I Attended:

Friday 3 June – Lloyd’s Register Party at the Astir Palace. I flew in that evening, but the lock failed on the apartment door. By the time this was sorted out, I arrived at the party at 2.0 am – just as it ended.

Monday 6 June – Lorentzen and Stemoco Party at Club Banane on a beach near Glyfada. I was invited via Tod and Lulu (see below), two S&P brokers from Stemoco, I met at the Lloyd’s List Intelligence Briefing the day before. This was held at a beach club in the afternoon. Club Banane was not closed to civilians, who were wandering around in bikinis.

Lulu Zheng and Craig at the Stemoco party

Tuesday 7 June – Drinks at the TW stand. Following a sudden thunderstorm, Posidonia was deserted, and there were no guest left on the TW stand. Zero networking.

Tuesday 7 June – Korean Shipyards party at the Astir Palace. This was a formal reception, with suit and tie required. This was an open invite party and a good networking opportunity.

Wednesday 8 June – Vancouver International Maritime Centre (VIMC) party at the Vorres Museum of modern art in a village near the airport. I was invited after chatting to VIMC peeps at Posidonia Expo. This was a very difficult to get to location as the village roads were not wide enough to take E-class Merc taxis, but the hosts and location were charming. The museum holds some of the most valuable modern art in Greece, and the galleries were open during the party. Networking limited to Canadian shipping people and Greek lawyers. After the party, I shared a taxi with the Canadians to the Tradewinds party.

Christian Waldegrave, Head of Research at Teekay at the Stemoco Party with Craig operating the selfie stick.

Wednesday 8 June – Tradewinds party at the Island (where there appeared to be two other events on at the same time). There was a strict entry policy. The DJ was very good and the local group, The Melisses, played everything from Greek pop to Robbie Williams! The loud music made networking a little bit intimate, but by the third day of Posidonia, many of the faces were now familiar.

Thursday 9 June – Marshall Islands Party at Ble. This is a beach peninsular that is taken over by a catering company, Ble, and officially holds 2,500 people. This event was the unofficial end of Posidonia party and was packed, and included the glamour girls from the Posidonia stands. Marinakis was given an award. With several quiet areas with seats away from the music, this was a good last minute networking event.

James Leake, Head of Research at Arrow, and Paddy Stern of VesselsValue.

Marinakis receives an award.

Every night – The main after-party venue appeared to be Taverna 37, which is a terrace bar in the Arion Resort Hotel (part of the same complex as the Astir Palace). This was also the main broker hang-out and frequently occupied by the likes of Richard Fulford-Smith of Affinity and Andy Case of Clarksons. Indeed, at one session, I reckoned 40% of the people on the terrace were from one or the other shop.

Posidonia: It’s not all sunbathing and drinking!

Posidonia sets size record as global maritime community sets sail for Greece

This year I will be attending Posidonia. I will be blogging all through the event. Sometimes this might be press releases like the one below, which I think actually gives a good idea of the scale of the event. Other blogs will be my own thoughts on the events taking place. 

The organisers of Posidonia, the world’s most prestigious maritime exhibition, have confirmed a 15 percent growth in size for this year’s event, as the committed total of over 40.000 square metres of exhibition floor space together with a record 40 conferences and new sporting events make the 2016 edition the biggest in the event’s almost 50 year-long history. Over 1.800 exhibitors from 89 countries will participate at Posidonia 2016 which opens its doors on June 6 for a week that will see intense networking and business dealing between the world’s most prominent shipping industry executives who will converge at the Athens Metropolitan Expo for the biennial maritime show. In total, some 20.000 visitors are expected to walk the ambient halls and corridors of the state-of-the-art venue which every two years becomes the global hub of attention for an industry which carries around 90% of world trade. The gravitas of Posidonia and its reputation as the most important shipping event is mainly owed to its status as the home of Greek Shipping, who control some 20 percent of the world’s dwt tonnage.
“The growth of Posidonia is the result of the resilience of the Greek shipping industry which has managed to cope with the current challenging conditions and maintains its leadership position thanks to its entrepreneurial spirit and by continuously upgrading and reinventing its product,” said Theodore Vokos, Executive Director, Posidonia Exhibitions S.A., during a press conference to mark the launch of the 25th edition of Posidonia.
Currently, the Greek-owned fleet’s average age is 11,2 years and comprises 4.585 ships, representing 19,63% of the global fleet in dwt. “In spite of fierce international competition, Greece’s ocean-going shipping sector maintains the highest ranking in the world and we continue to expand as our current newbuilding order book contains 350 ships under construction,” said George D. Pateras, President of the Hellenic Chamber of Shipping, during the official Posidonia Press Conference.
Theodore E. Veniamis, President, Union of Greek Shipowners, said: “Posidonia is here to project in the best possible way the significance of the shipping industry and the indispensable service it offers to international trade and the world economy. This impressive exhibition is equally a clear manifestation of Greek shipping’s invaluable contribution to the national and the EU economy. At a crucial period for the Greek economy and under adverse conditions stemming from both global market pressures and misguided recent EU policy approaches, Greek shipping maintains the first position internationally with 20% of the world deadweight capacity and 50% of the EU fleet, and proudly hosts the most prestigious shipping trade event internationally.”
Charalambos Fafalios, Chairman of the Greek Shipping Cooperation Committee in London, said: “Even though Greece is still valiantly trying to recover from many years of difficulty, its shipping industry is flying the flag and showing the ingenuity and foresight that makes Greek shipping the leader in most bulk shipping markets. Though many sectors of the shipping industry itself are going through painful adjustments, the positive attitude shown by the shipping industry means that it will not only survive but ultimately prosper. We believe that the government should continue to support the efforts of the maritime industry in every way possible because without its maritime heritage Greece would not be the proud country that it is.”

But there are also challenges ahead as John C. Lyras, Chairman of the Posidonia Coordinating Committee, pointed out: “Despite the deepest and continuing economic crisis since Greece joined the European Economic Community (as it was known at the time and comprised 9 member states) in 1981, Posidonia 2016 is the most prominent yet. There can be no more eloquent acknowledgment of the Greek shipping community’s success and dynamism than this. A community that comprises almost half of EU shipping and which contributes significantly and annually to the Greek and EU Maritime cluster and economy.
A community, moreover, which the European Commission is strangely and hopefully inadvertently proposing to seriously undermine through its investigation of Greek shipping’s longstanding legal and taxation framework. As is evident from the impressive size and scope of this year’s Posidonia, this framework has been singularly efficacious.”
Nevertheless, the leadership position of the Greek shipping community and its continuous fleet renewal programme are the catalysts that attract the world’s shipping industry suppliers and manufacturers to Posidonia to showcase and market their offerings.
A record of more than 200 shipyards led by traditional shipbuilding nations, China, Japan and South Korea, will hope to attract the attention of the owners of the world’s largest fleet at an event synonymous to newbuilding deals.  More than 80 Information and Communications Technology (ICT) firms will vie for a slice of the smart vessel wave that has engulfed operators due to regulatory changes and the need for improved performance. And from specialist shipping suppliers, such as ballast water management and propulsion system providers, to service providers from the travel, health, safety and education sectors, the premises of the exhibition will once again buzz with the aura of global shipping’s brightest brands and minds. Pateras saluted the participation of this wide ranging group of service and product providers as “the Hellenic Chamber of Shipping continuously supports developing technological achievements which comply with international maritime safety regulations and protect the marine environment.”
And thanks to the 40 confirmed presentations, seminars and workshops delving into the global maritime community’s prime focus, strategic priorities, issues and concerns, the Posidonia 2016 Conference programme will be yet another reference point offering more reasons to visit for decision-makers, high ranking executives, analysts and the media from around the world.
Many of them will take advantage of the Posidonia Games, the ultimate networking platform comprising trademark sailing, football, golf and running events that are scheduled on the weekend leading up to the opening of the exhibition. In total, over 2,500 shipping industry professionals from all over the world have registered to participate in the Games, a concept which has helped prolong hotel night stays for many Posidonia exhibitors and visitors further boosting revenues for Athens’ hospitality sector and further fueling overall Posidonia spending across the city’s transportation, catering and entertainment sectors, which is estimated at Euro 60 million for the duration of the exhibition.
Posidonia 2016 will be held from June 6 – 10 at the Athens Metropolitan Expo. The event is organised under the auspices of the Greek shipping community and the five major associations representing Greek shipping interests: Ministry of Maritime Affairs & Insular Policy, Municipality of Piraeus, Hellenic Chamber of Shipping, Union of Greek Shipowners, Greek Shipping Cooperation Committee, Hellenic Shortsea Shipowners Association and Association of Passenger Shipping Companies.

Shipping Calendar (http://goo.gl/y0kdv) Update – May 2014

Shipping Calendar Update – May 2014

 

I have been updating the Shipping Calendar, and I have been trying to expand the coverage to include commodities events with a significant shipping element. Below is a summary of the forthcoming conferences, including the conferences I hope to attend.

 

May 2014

Recent additions to the Shipping Calendar include a rice conference in Africa rice-AFRICA conference on Rice for Food, Market and Development, and a wood and paper pulp conference in Brazil – Paper and Wood Pulp Conference. The later takes place in the middle of May, about a month before the FIFA World Cup starts. I have also included a sugar conference, Africa Sugar Outlook, but I am not sure if there is a significant shipping element. The trade in sugar has expanded enormously in the last few years, and requires specialist shipping knowledge. Bulk and bagged sugar shipping and handling might be an interesting one-day conference, and I can help with ideas and speakers if any of the specialist shipping conference organisers are interested.

 

June 2014

It’s an even year so June means Posidonia, which lasts from Monday 2 June to the Thursday afternoon. I personally am not so fond of the new location, and prefer the shabby but more convenient location of the customs shed of years gone by. If you haven’t been, you should go to at least one Posidonia and crash as many parties as possible. A tempting alternative would be the giant 2000+ delegates Coaltrans Asia event in Bali. Having been to the Coaltrans event in Goa, India, this year, I can say that Coaltrans’ organisation is first-class, with excellent networking opportunities. There was even a special purpose event app so you were always up to speed on when and where to go. After Posidonia, the shipping finance portion of the shipping party moves onto New York, and the Marine Money New York Week from Monday 16 June. Perhaps not as rock ‘n roll as New York but free to attend is Ro-Ro 2014  in the ExCel centre in the east end of London from 24 June.

 

July

Not much happening. If you have had your fill of shipping conferences, how about the European International Submarine Races !

 

August

The northern hemisphere will be on holiday, but Down Under there is Coaltrans Australia, taking place in Brisbane.

 

September

The Autumn conference season begins with SMM  the giant shipping exhibition in Hamburg, Germany. This has a German shipping finance conference on the first day. I have also included Metal Bulletin’s Steel Scrap Conference, which takes place in Rotterdam on the 22 September, but looking at the agenda is may be a bit light on the shipping of scrap – let’s wait and see. One event I may be attending is the The Red Sea and Gulf Bunkering Conference, but the link for the 2014 flutters in and out of view, so I am not sure if this event is on or not.

 

October

Following on from German shipping finance conference at SMM, there is a Greek shipping finance conference in Athens organised by Marine Money, plus one on the same day in Brazil. Maybe we can have a live Skype link up and debate? One event I have been to in the past is the Mare Forum event in Amsterdam, Mare Forum Shipowners vs. Capital Providers . I enjoy the format and the informality of the Dutch set-up, ad hope to be there again this year.

 

November

A new event to me is Global Shipping Trends & Trade Patterns. With a title like that I don’t know why I haven’t heard of it before, and I will be making an effort to attend this event on Wednesday 5 November in London. At the moment, there does not appear to be a clash between the Informa 27th International Ship Finance & Investment Conference in London on the Wednesday 12 November, and the equivalent Marine Money in New York, and / or the Hansa event in Germany, as was the case last year. However, these other two events has not yet been listed on the respective websites yet. They have already lost the Friday 14 November, as this is taken up with the Tradewinds Dry Cargo Charterers Forum in Geneva, which I did not attend but heard good things about last year.

The following week is a new wet conference, the Tanker Shipping & Trade Conference organised by Riviera, publishers of the magazine of the same title. This starts in London on Wednesday 19 November, and I hope to be there.

 

December

Into December, and the Middle East Iron & Steel conference in Dubai starting on the Monday 8 December. This is unlikely to be the last trade conference of the year, but that is as far as I have got at the moment.

If your event is not on the Shipping Calendar and you feel it should be, then send an email to craigjallal@hotmail.com with the details.