Greek Shipping News Cuts
Week 45 - 2008


Papaligouras: Shipping will withstand the financial strains

---The shipping industry will continue to be "the lifeline of the global community" despite the global financial crisis and fears of recession. World trade of goods, oil and raw materials will continue to grow and, since their production and consumption sites lie wide apart, there will always be demand for their waterborne transportation, Marine, Aegean and Island Policy minister, Anastasios Papaligouras told the opening session of the Greek Shipping Summit, November 6.
"Experts in maritime economics believe that, regardless of the ongoing crisis, the global shipping industry will withstand the financial strains," declared the minister.
He said "the low cost and high efficiency of maritime transport guarantees that ships will continue to provide our economies as well as the economies of the developing countries with the requisite energy and other resources, contributing to further development and improvement of global living standards".
The minister said that "tremendous changes have taken place in the capital markets, and also important ones in the markets that create shipping demand". Dry cargo markets, as well as tanker markets, look particularly weak as rates have dropped by some 80%. "If this continues for too long, the consequences for the shipping industry will be more serious," said the minister.
He said as far as the shipbuilding sector, the current newbuilding orderbook has been for some time at record levels. Shios delivered during the last year and those due for delivery in the next two years, may struggle to meet their debt obligations. It should be noted that during the first nine months of 2008, bank loans to global shipping have been reduced by 30%, while 60% of the total new shipbuilding orders have not been financed yet.
"This crisis is a threat but should also be seen by the international shipping industry as an opportunity and a test. I firmly believe the present difficulty will end with a more robust maritime transport industry, able to meet new challenges during the stormy weather ahead", said Papaligouras.
He noted that IMF chief economist Olivier Blanchard said: "With the right macroeconomic and financial policies we can ride the storm, and expect a recovery to start in the course of 2009."
The minister said particular attention should be paid in order to secure free and fair competition in shipping and to avoid any restriction in the access to the world maritime markets.
"For all of us policymakers, it may be the right time to reconsider the importance of the contribution of shipping to the global industry and to evaluate its role in social and economic prosperity. Decisions should then follow, at an international level, aiming at the sustainable development of the shipping industry" said Papaligouras.
He went on: "The Greek shipping community is experienced in responding to crises with the same sense of ownership with which a captain governs his ship through a storm, and frankly speaking this is very important. The real strength of Greek shipping is not solely in its economic power. I am convinced that the comparative advantage of the long-standing Greek maritime tradition is, and will continue to be, the adoption of the principle commonly called 'quality shipping' for the vessels, seafarers, and services provided."
He said the government is "closely monitoring worldwide developments in order to undertake necessary initiatives at national, European, and international level, so as to prevent any distortion in maritime transport".

Greek Shipping Summit: The great debate
---The Greek Shipping Summit came to an end with what has now become an institution: the parliamentary style debate with votes cast by delegates.
( to view video interview with the key players, go to > )
Chairing the debate was Nicholas Tsavliris of the Tsavliris group, who found himself having to keep the peace between the two arguing factions.
The motion put to the audience was that new shipbuilding capacity now coming on stream will see the slumps of the past repeat.
Stavros Hatzigrigoris of Kristen Navigation, Paul Slater of First International and Jean Richards of Quantum Shipping Services all argued for the motion highlighting the oversupply scenario coming onto effect in 2009.
Regardless of the finance crisis, the shipping sector was still set on a downward spiral, they say, because shipbuilding capacity is high.
On the other hand Emmanuel Vordonis of Thenamaris, Harry Vafias of StealthGas and Anthony Zolotas of Eurofin all argued against the motion. The financial crisis they say means that new order projects are very unlikely to materialize in this environment. Owners will not ink in new tonnage on a speculative basis so demand and supply will come to equilibrium. A correction downward for charters, Vafias argues, was expected but nothing like the $5,000 per day level reported for a capesize this week.
Vordonis particularly captured the audience by turning the emphasis away from the gloom and asking the audience to consider another way of looking at the near future. The hard times ahead he says are nothing new to shipowners who are used to the highs and lows of a tsunami. The hard times can be a time of optimism where developed economies will find ways to be more creative in wealth growth. A number of developing economies fundamentally will continue to fuel shipping.
The audience opted to vote against the motion.
By Yiota Gousas in Athens
Published: 09:33 GMT, 07 Nov 2008 | last updated: 10:01 GMT, 07 Nov 2008

Safe profits soar
The Greek owner on Monday reported $39.2m in quarterly net income, up from $21.2m in the same period of last year.
The results amounted to $0.72 in earnings per share. On average, analysts forecasted $0.66 per share, although derivatives losses may not have been included in the estimates.
In its first full-quarter earnings report since listing in New York in June, Safe Bulkers said its higher profits was a result of quarterly revenues that jumped by 21.1% to $55.6m. (Click here for the full earnings release.)
Expenses up 21%
Vessel operating expenses grew by 20.5% to $3.8m thanks to increased wages, insurance costs and lubricants prices. The company also reported a $3.1 loss on derivatives, compared to a $20,000 gain a year earlier.
Safe Bulkers also declared a $0.475-per-share dividend. For the partial the second quarter, the company had paid out $0.146 per share, a pro rata portion of the $0.475 dividend.
Based in Athens and led by Polys Hajioannou, Safe Bulkers owns 11 bulk carriers, ranging in size from 76,000 to 87,000 dwt. The company also has nine vessels on order.
100% coverage
The company has all of its fleet under time-charter for the remainder of the year. It also has 87% coverage for next year and 66% for 2010.
By Eric Martin in Stamford, Published: 22:24 GMT, 03 Nov 2008 | last updated: 10:34 GMT, 04 Nov 2008

FOCUS: Financial Crisis Seen Cutting Shipping Oversupply
---Editor: Sharon Li, 6 Nov 2008 09:50:37 GMT
ATHENS --By most measures it's been a bad couple of months for the world's shipping industry.
Freight rates have collapsed on the back of the world financial crisis, bank financing has vanished, and shipping stocks have slumped even faster than the average in
plunging equity markets.
And yet, the financial crisis may hold one silver lining for the world's perennially boom-to-bust shipping industry: it could help cut a looming oversupply of new ships.
Three years of record-high freight rates on the back of booming world trade, thanks in part to China's double-digit growth, has led to giddy overinvestment in new
Over the next four years, some 6,000 new vessels - equal to 60% of the world's current oceangoing fleet of tankers, bulk carriers and container ships - are due to
enter service.
But now, because of the financial crisis, it looks though half of those ships now on order at shipyards around the world may never be financed, much less built.
That may not be enough to save the industry from its own excesses in the short term, but it could provide the basis for a strong recovery in shipping sooner rather
than later.
"Finance for ships will not be easily available for the next one to two years and so there will be cancelations of shipbuilding orders," said Theodore Petropoulos,
managing director at consultancy Petrofin Research.
"I can't say that the order book will shrink to such a point that it no longer poses a threat (of overcapacity)," Petropoulos said. "But overall, the supply side now looks
like it will be, let's say, less unfriendly than it has been."
Indeed, over the next three years, it is estimated that some $300 billion will be needed to finance those new ships, and another $300 billion to finance secondhand
vessel transactions. But to date, total financing commitments to the shipping industry next year look like they may well fall below $100 million.
"There is a shortage of money from the banks and, as things look at present, there will be no money from the capital markets. So we have to look to other sources.
And that is either shipowners' equity or other sources of private equity," said Kevin Oates at Marine Money Greece, a ship financing consultancy.
"But if that doesn't happen, then many of those shipbuilding projects won't go ahead," Oates said.
To be sure, far too many ships will still glut the market in 2009 and 2010, industry sources say - perhaps as many as 4,000 new vessels. And at the same time,
growth in world trade, which has been running at slightly more than 8% in 2006 and 2007 will slow to 4.9% this year and 4.1% next year, as world economic growth
slows, according to the latest forecast by the International Monetary Fund.
But behind those broader trends, lie a host of other factors - ranging from scrappage rates, to secondhand vessel prices, to environmental regulations - that combined
with the current problems in shipping finance, will also exert an influence.
On top of this, each of shipping's three major sectors - tankers, dry bulk carriers and containers - are governed by distinctly different markets. There is, therefore, a
possibility that shipping sectors - such as the tanker industry - may weather the coming storm better than others.
Financial Crisis To Squeeze Owners And Shipyards
A dearth of financing will affect the shipping industry in two ways. First, banks may pull back from lending ship owners the money they need to buy new ships.
Second, many shipyards - particularly newly established ones that have come into existence to cope with the recent boom - may likewise not get the financing they
need for new ships.
In the first case, many of the smaller, more marginal shipowners may be squeezed out of the industry altogether, furthering a slow, already existing trend towards
That's already been seen in Greece, which serves as proxy for the rest of the industry. Greek shipowners, directly or indirectly, control roughly a quarter of the world's
fleet and half the European Union's tonnage.
Over the last few years, for example, the number of Greek shipping companies with eight or fewer vessels has shrunk from 655 in 2001 to 624 in 2008. At the same
time, the number of Greek shipping companies with more than 25 vessels has grown from 19 to 32, according to Petrofin Research.
But the chill in bank financing may have an even larger impact on shipyards in Japan, South Korea and China, which account for more than three-quarters of
shipbuilding orders. Many of those yards, particularly in China, opened only in the past few years to cope with the shipbuilding boom.
In the dry bulk sector where, arguably, the oversupply of new ships is greatest and the lead time to build a ship is shortest, the closure of some yards may yet help
cut overcapacity.
According to Clarkson Research, a division of a leading shipping brokerage, more than half of new orders for drybulk carriers in 2010, and about 45% of drybulk
orders in 2011, are at either newly established yards, newly expanded yards or greenfield yards - those which have yet to build their first ship.
"The general expectations of analysts were for very strong freight rates in 2008, a decline in 2009 and a potential collapse in 2010," said a shipping industry source.
"The question now is to what extent the order book will change as a result of cancellations and slippage."
Shipping Rates Plunge, But Partial Recovery Ahead?
In reality, shipping is really three different industries, with tankers, dry bulk carriers and containers each expected to respond differently to the crisis.
Of the three, the tanker industry is probably best-positioned, in part because of new international environmental regulations banning single-hull vessels from trading in
U.S. and European waters from 2010.
As a result, the biggest surge in new, double-hull vessels will come next year as tanker owners race to meet that deadline. After that, the order book begins to
And if the financial crisis leads to the likely cancellation of new orders in the years after 2011, that order book could decline further still.
Just as significantly, the phase-in of the new double-hull tankers has, in effect, created a two-tier tanker market. While most double-hull tanker rates have showed
some resilience, single-hull rates have weakened. If that persists - and it should - the financial crisis may well induce ship owners to increasingly scrap their older
vessels according to industry sources.
As it is, time charter rates for oil tankers - while declining from a record high this past summer - have held steadier than the steep declines seen in shipping rates for
both dry bulk carriers and container ships.
Indeed, the time charter rates for very large crude carriers, or VLCCs - mammoth tankers of more than 200,000 deadweight tons - have increased since hitting a low
in August. That may not last, as new ships enter the market starting next year, but neither are freight rates expected to collapse.
For 2008, Norway's Pareto Securities forecasts that VLCC rates will average $100,000 a day, before slumping to $50,000 a day next year. A steep 50% decline, to
be sure, but in line with the five-year average for the sector, which by most measures has been one of the strongest periods in shipping history.
"Tanker rates...are more in line with the average of the last few years," said David Frischkorn, vice chairman at Dahlman Rose, a boutique investment bank
specializing in shipping.
For dry bulk carriers, the situation is much more daunting. As it is, the widely followed Baltic Dry Index - the international benchmark for dry bulk rates - is at a five-
year low and down more than 90% since a midsummer high. Time charter rates for Capesize bulkers, the supertankers of the dry bulk industry with a displacement
of more than 160,000 deadweight tons, have fallen from more than $200,000 a day in August to less than $10,000 a day now.
"With the collapse in dry bulk rates we are seeing prices that nobody has seen in years," Frischkorn said.
But that reflects less the oversupply of new ships and more the direct impact of the financial crisis, with banks suddenly unwilling to issue or honor letters of credit.
"What's killing the rates right now is that there are cargoes that want to move, but they can't get a letter of credit," said Frischkorn. "I think we will see prices move
back up above the levels of what they are at now. But for that to happen, we need to have a normal market."
-By Alkman Granitsas, Dow Jones Newswires; +30 210 331 2881;

Genco (GNK) Cancels 6-Ship Acquisition; Loses Deposit But Saves Nearly $6/share
---Last night Genco Shipping (GNK / NYSE) announced it has canceled an agreement to buy three Capesize and three Handysize dry bulk carriers. Genco agreed to acquire these vessels, all to be delivered in 2009 after construction, from private sellers for a total of $530 million. The company had placed a $53 million deposit with the remainder due on delivery. As part of its cancellation agreement, Genco will lose this deposit but is not on the hook for any remaining payments.
>Genco is in talks with its lenders with respect to the status of the $320 million facility in place to finance the ships. The terms of the facility provide for it to be cancelled if the purchase agreement were cancelled but management is discussing a potential extension. If it were to be cancelled, Genco would take a non-cash charge of $2.3 million during 4Q to go along with a $54 million charge for the cancellation of the vessels.
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Hellenic Carriers Limited withdraw from acquiring the M/V FURNESS TIMIKA
Press release 7 November 2008
The severe financial crisis and the prevailing poor dry bulk freight rates have led to a substantial weakening in the sale and purchase market for dry bulk vessels. In view of these market conditions and following negotiations with the Seller, Axios has decided to withdraw from the contract to acquire M/V FURNESS TIMIKA in consideration for a payment of US$1m to the Seller. Since Axios will not be taking delivery of the vessel, the deposit of US$6,970,000 paid in July 2008 will also be released to the Seller.
For further information please contact: Hellenic Carriers Limited, Fotini Karamanlis, Chief Executive Officer, E-mail: +30 210 455 8900
Source: Press release 7 November 2008,

Magic pipe indictment
---A SHIPOWNER, a ship operator and a chief engineer were all sentenced last week by the US District Court for the Northern District of California after pleading guilty to conspiring to falsify waste oil disposal records related to the intentional disposal of waste oil into the ocean while in international waters.
Casilda Shipping Ltd, the Maltese owner of the 23,000 dwt cargo vessel "Rio Gold", was ordered to pay a fine of $750,000 and to serve three years' probation. Genesis Seatrading Corporation, the vessel's Greek operating company, was sentenced to three years' probation and ordered to comply with an extensive three-year environmental compliance plan. And Pantelis Thomas, the vessel's chief engineer, was sentenced to three years' probation and ordered to pay a $5,000 fine.
In pleading guilty, the defendants admitted to using a 'magic pipe' to bypass the anti-pollution equipment on the ship. They had ordered the crew to illegally use the magic pipe to discharge waste oil directly into the ocean and concealed their illegal overboard discharges by making false entries into and omissions from the ship's onboard records.
The violations came to the attention of the US Coast Guard after the "Rio Gold" docked in Oakland, California, on May 26, 2008, when four crew members reported the illegal activities. A subsequent inspection of the vessel uncovered the magic pipe disassembled and stored away, along with evidence of its consistent use.
The indictment against the defendants alleged that the illegal dumping of waste oil began when the vessel was first purchased in July 2007 and continued until shortly before the vessel docked in Oakland in May 2008.
Holland + Knight reports the decision in its Haight's Maritime Items newsletter of November 4.
Source: Issue 371, November 4th, 2008, Maritime Advocate Online,

Union says ship workers owed pay
---A maritime union is claiming up to 22 Filipino workers, on board a ship bound for Bunbury, have not been paid in three months.
The International Transport Workers Federation of Australia (ITF) says the workers are on the Greek-owned ship Equator which is carrying cargo without an international minimum agreement for wages and conditions.
ITF boarded the ship in Adelaide last Friday and says the captain declined to show proof that the crew were being paid.
The federation's Dean Summers has demanded the Federal Government intervene to help confirm whether the workers have been paid the estimated $18,000 they are each owed.
"The people who are ultimately responsible have to take a responsibility for the crew's welfare," he said.
"Certainly to make sure that the crew are getting paid something. Workers that aren't being paid and are being forced to work are call salves and we want to investigate that slavery is not happening on this ship."
The vessel is carrying cargo for Bemax Resources Limited which would not comment on the issue, except to say it accessed the Equator through shipping agency Olendorff Carriers.
Oldenorff Carriers has been contacted for comment.
Source: ABC Regional Online, Australia - Nov 3, 2008,

Superfast VII damaged in storm
---SSG-TALLINN. On the evening of October 31, during a heavy storm, the vessel Superfast VII hit the quay and also touched the Baltic Princess in the Western Harbour in Helsinki. The damage was repaired on Superfast during the evening and night and the vessel was able to sail to Rostock the following morning. No passengers were on board when the accident occurred.
Source: Scandinavian Shipping Gazette <>

Greek Training Forum Held in Athens
---(2 November, 2008) SEAGULL / NEWSLINK have the pleasure to announce the great success of their joint User's Forum event which took place on Wednesday October 22nd at Eugenides Foundation in Athens, Greece
Source: Press Release, Seagull AS <>

Digital Ship Athens 2008 - Theme: operational excellence in shipping
---18-19 November 2008, Aegli Zappiou, which is a few minutes walk from Syntagma Square in Athens, Greece.
Digital Ship Athens is one of the biggest events in the Greek technical shipping calendar, where IT, technical and operations managers come together to discuss the latest technology and practise.
Our theme for our November 2008 event is 'Operational excellence in shipping' - and how to get the ships, seafarers, systems, and standards to achieve it.
Companies registered to send delegates include Almi Marine Management, Athenian Sea Carriers, Avin, Brave Maritime, Ceres LNG Services Ltd, Chronos Shipping Co. Ltd, Ciel Shipmanagement, Costamare Shipping, Danaos Shipping, Dynacom Tankers Management Ltd, Eletson Corporation, Eurobulk Ltd, Exmar Shipmanagement, Fairsky Shipping and Trading S.A, Franco Compania Naviera, Future Marine Shipping, Gourdomichalis Maritime, Gulf Marine Management, Hellenic Shipyards, Imperium Shipmanagement, JLShipping, Kassian Maritime Navigation Agency, Larus, Liquimar Tankers Management, Navios Shipmanagement, Olympic Shipping & Management, OSG Ship Management, PrivatSea, Remi Maritime, Samos Steamship, Springfield Shipping Co. Panama, TEO Shipping Corporation, Thenamaris, Transnautic Ship Management, Vanoss
Dr. Michael B. Kennedy is the managing director of Hellespont Steamship Company which is building 6 platform supply vessels and 8 chemical tankers. He is also a director of the Hellespont group which is operating 16 crude, product and chemical tankers worldwide. He belongs to the Society of Naval Architects and Marine Engineers (Greek Section), the American Society of Testing and Materials, and is Hellespont representative on the Tanker Structure Cooperative Forum. He is and has been a member of various IMO and other industry panels/committees.
The event will be held this year on Aegli Zappiou, which is a few minutes walk from Syntagma. There will be a dinner for all conference participants on the evening of November 18th in Aleka's Taverna, Plaka (a 15 min walk from Aegli Zappiou).
For further on the event >