Greek Shipping News Cuts
Week 51 - 2008


DryShips 'likely' to cancel $1.2bn Economou capesizes

---Nigel Lowry, Athens - Monday 22 December 2008
SHIPOWNER George Economou has confirmed that his Nasdaq-listed dry bulk giant DryShips is likely to cancel a controversial purchase of nine capesize bulkers from his private fleet.
In addition to issuing 19.4m new shares to its chairman and chief executive, however, the company faced shouldering $216m in bank debt on the ships and $262m in remaining installments for the five newbuildings among the nine.
The fleet at stake comprises one older capesize, three 2006-built vessels and five newbuildings for delivery in 2009 and 2010.
However, the comment was largely overlooked as a policy statement as it was taken mainly to apply to the cancellation of four panamax newbuildings, two of which are still under construction, confirmed in the same statement.
Although analysts generally welcomed the move to ditch the acquisitions, some questioned whether the terms were punitive to the public company.
Asked how he could square his private interests with those of leading the public company when it came to unraveling such deals, Mr Economou said he expected to take a hit from the cancellation.

FreeSeas Inc. Appoints Interim Chief Financial Officer
---PIRAEUS, Greece, Dec 22, 2008 (GlobeNewswire via COMTEX News Network) -- FreeSeas Inc. (Nasdaq:FREE) (Nasdaq:FREEW) (Nasdaq:FREEZ) ("FreeSeas" or "the Company"), a provider of seaborne transportation for drybulk cargoes, announced today that Mr. Dimitris Filippas, previously Assistant to the Chief Financial Officer, has been appointed interim CFO of FreeSeas. Mr. Filippas will assume the duties of Mr. Dimitris Papadopoulos, who has departed from the company. Mr. Papadopoulos will remain an advisor to the Board and management of the Company. The Company has begun a search for a permanent replacement.
Mr. Filippas has a strong background in shipping and finance, having worked in various accounting roles at shipping-related firms and most recently, before joining FreeSeas, working as a Financial Accountant for a publically listed shipping company.
"The Board and I would like to thank Mr. Papadopoulos for his contributions to FreeSeas. We are pleased that he is remaining an advisor to the firm," said Mr. Ion Varouxakis, President and CEO of FreeSeas. "While we conduct our search for a new CFO, we are confident in Mr. Filippas' ability to fulfill the duties of CFO. At this pivotal juncture in our industry's development, the role of the CFO is more critical than ever before. We will be both prudent and timely in finding the appropriate candidate to enhance our management team."
About FreeSeas Inc.
FreeSeas Inc. is a Marshall Islands corporation with principal offices in Piraeus, Greece. FreeSeas is engaged in the transportation of dry bulk cargoes through the ownership and operation of dry bulk carriers. Currently, it has a fleet of seven Handysize vessels and two Handymax vessels. FreeSeas' common stock and warrants trade on the NASDAQ Global Market under the symbols FREE, FREEW and FREEZ, respectively. Risks and uncertainties are described in reports filed by FreeSeas Inc. with the U.S. Securities and Exchange Commission, which can be obtained free of charge on the SEC's website at For more information about FreeSeas Inc., please visit the corporate website,

Aigaion must pay
---The Allianz insurance group of Germany has emerged victorious in a second battle with Greek underwriter Aigaion Insurance over cover on an Egyptian anchor handler that became a total loss.
The vessel was part of a fleet of eight offshore support vessels owned by Cairo based Ocean Marine Services, a 50:50 joint venture between Smit and the local Shilbaya group.
Allianz agreed to insured the fleet with a 30% reinsurance stake passed to Aigaion.
Allianz paid the reinsurance premium to Cyprus broker Chedid & Associates. The funds failed to reach Aigaion but nevertheless e-mail correspondence from Nicolaos Tzimas, senior marine underwriter of Aigaion led to the view that a valid contract existed.
At the high court trial Judge Chambers found that Wael Wasfi, marine underwriting manager of Allianz in Egypt, Nassib Barbir of Chedid and Tzimas all gave honest and straightforward evidence.
But there were various administrative problems and documentary discrepancies. There was also a deferred premium clause in the Allianz offer that made it necessary for Aigaion to serve a cancellation notice if it was to be off risk as a result of the non-payment of premium. A further issues was that Tzimas accepted cover on the basis that it was warranted that the vessels be classed and class be maintained with an International Association of Classification Societies member but this provision disappeared from the final deal.
Chambers found for Allianz and this ruling has now been upheld by lord justices Laws, Rix and Moses in the appeal court.
Rix posed the question was there a contract between Allianz and Aigaion? The answer was that an e-mail response by Tzimas stipulating an improved rate of 1.5% instead of 1.3% as negotiations concluded was to be construed as acceptance of the contract.
Click on the documents in the related media column to the right to read both judgments in full.
By Jim Mulrenan in London
Published: 11:56 GMT, 22 Dec 2008 | last updated: 12:22 GMT, 22 Dec 2008

Hutchison withdraws interest for Thessaloniki Port container terminal
---24Dec 2008. Hutchison Port Holdings on Tuesday said it was withdrawing interest from a concession of Thessaloniki Port's container terminal, without disclosing the reasons behind its decision.
In an announcement released late on Tuesday by the Thessaloniki Port Authority, it was announced that the consortium -- comprising of Hutchison Port Holdings Limited, Hutchison Port Investments SARL, Alapis ABEE and LYD SA -- was withdrawing its interest from the tender.
The consortium was declared as temporary winner of the tender after offering a bid of 419.5 million euros for the Thessaloniki port's cargo terminal, far more than 131.9 million euros offered by Cosco, the runner-up in the tender.

Sea Diamond plan submitted
The firm pointed to the fact that a new map published by the Greek Navy in November indicated that the reef struck by the Sea Diamond had not been correctly marked.

Ships remain in ports due to rough seas
---All passenger ferryboats were not allowed to leave the ports of Piraeus, Lavrio and Rafina on Monday due to the 9-10 Beaufort-strong northeasterly winds blowing at sea, while a Coast Guard-issued advisory warns ships to set anchor in the nearest port.
Meanwhile, the Panamanian-flag cargo ship "Tina F" with a 12-member crew on board has gone adrift off the northern coasts of the Aegean island of Sifnos while en route to Sicily carrying cement. A tugboat from Piraeus is on its way to the area.
Source: ANA, Greece - Dec 22, 2008

New ideas for tanker safety
---At the Digital Ship Athens conference on 18-19th November, speakers from Hellespont Steamship, Capital Ship Management, Exmar and K C Lyrintzis Group provided some new ideas about how to ensure tankers are as a safe as possible and how to get the oil companies on your side.
"If you can't avoid spills, good communication is probably the next best thing."
The Hellespont Group operates 16 crude, product and chemical tankers, and its technical arm, Hellespont Steamship Company is currently building six platform supply vessels and eight chemical tankers.
"For an oil company, transparency means the paper system is equal to reality," he said.
"In the past faking it with paper was more possible, but not now."
Good key performance indicators for a tanker company include the level of crew retention, the number of shipboard visits by office staff, and results from SIRE, CDI and port state control inspections, he said.
When you have an oil company / SIRE inspection, "first impressions are very important," he said. "Many SIRE inspectors say, I knew your company was OK in the walk up the gangway."
"If he sees a uniform, no T-shirts or flip flops, the inspection will go much faster."
When undergoing a TMSA audit, Kennedy recommends being completely honest. "Our Hamburg office was audited - we got a score of 2.8. That was also the same score we gave ourselves," he said.
"The auditors said, your score of 2.8 means more than a 'stretched 3' to us," he said.
"Honesty was the best policy."
Some tanker companies have been tempted to try to 'game' the system - for example, by adding many easy maintenance tasks to the system so that the percentage of outstanding maintenance tasks can be reduced. Kennedy warned against this.
Platform support vessels
Hellespont is currently building six platform support vessels, which provide deliveries and other services to offshore oil platforms.
"I have never seen more complex ships," he said. "The engine rooms are very small and full of machinery."
"They are in constant communications with the rig, the customer," he said.
Oil companies see oil and gas production as the most important activity they are involved in, and they see offshore platforms and rigs as the most visible and critical.
"Our vessels are supporting this multibillion dollar activity. They don't want problems," he said.
Kennedy has observed that, in TMSA, oil companies are trying to push the same style of safety management which they have developed for the offshore industry, onto tankers.
For example, before doing any job, a company should complete a detailed 'job risk and analysis' statement, showing exactly what each person's role is, how to stop the job if any changes occur, and how to adjust people's work after any on-the-spot changes have been made.
Kennedy emphasised the importance of a healthy working atmosphere - on ship, on shore, and in communications between the two.
"The communications link has to be more than a few emails going in and out," he said.
"Office staff must go onboard ships frequently.
Alternatively you can bring shipboard staff ashore - but that is kind of the same thing."
If you don't have healthy relationships between ship and shore, "you'll probably have a more incidents and you'll never quite know why," he said.
"Part of the problem is that the crew don't quite trust the office, so you'll never quite get the full story."
If you don't have a healthy shipboard atmosphere, "crew will leave problems for their replacements," he said. "You need that feeling that they are part of a team and they can't just schlep it off to the next person."
Trend analysis
Stylianos Siafakas, safety and quality management representative of Capital Ship Management, said that his company has implemented extensive trend analysis systems, so it can see how well it is doing, and where it is improving.
"We know our position in the industry," he said. "We have the current situation, we get our target, and we identify the needs for change and establish an action plan for two, three and five years, with target dates."
Capital Ship Management operates 29 tankers of between 30,000 and 160,000 dwt and two 35,000 dwt bulkers.
Three steps
Siafakas said that there are three steps in a safety performance system - the engineering (the equipment), the procedures and systems and the behaviour of the people using it. To minimise accidents you need good equipment, good procedures and good behaviour.
Siafakas had observed that risk on board increases if you have people from more than two different countries. "This is very difficult to achieve," he said.
"One of the most important problems is thedifferent languages and different habits we have on the ship," he said. "You have to combine all this in one crew."
The company has a dedicated 'risk assessment team', which is responsible for identifying risks and sharing information about them. The knowledge is shared at a Friday risk assessment meeting, he explained.
Capital Ship Management started developing a tool across the company two years ago, and got the software running six months ago (May 2008), he said.
It uses Seagull Training Administrator to manage the shipboard training. "It is a simple and powerful training tool," he said. "The ships report training progress to us monthly.
"These training records are assessed every time we have an oil major in the office."
People and machines
Nikos P Frydas, director of studies, with the KC Lyrintzis Group (KCL Group), a maritime training and quality management company, talked about the challenges of training as ships become increasingly automated.
Accidents are often caused by a disharmony between procedures, equipment, the environment and people, he said. This gives rise to the most common causes of accidents, which are lack of technical skills and a disrespect for, or misinterpretation of, regulations.
People and machines are good at different things, they do not compete and machines exist to assist people, who must be in control.
The introduction of new technologies creates risks, which must be addressed carefully.
Common measures to reduce these risks include successful management of change and training.
Training objectives must include: increase in skills & competency, change of behaviour, positive effect in attitude & culture, reaching the trainee at his/her level and making the most out of seafarers' time and company's money.
"We show the horror of accidents and explain that many regulations have blood behind them, because they are the indirect result of a disaster"
Change management
When implementing new processes, 20% of people are usually leaders, 50% are followers and 30% of people will actively resist change, he said. The trick is to make sure you have enough leaders.
"The more people we are and the more strength we have, the quicker we will move," he said.
"70% of attempts to introduce something new have failed because it was not done properly."
"A quick way to identify resistance is to ask - where will change create pain or loss?" he said. "We have to allow for peoples' feeling."
Change is best achieved gradually, he said.
"Radical change is very painful. You often end up with something that doesn't work."
Kalliope Lyrintzis, KCL's managing director said she sees TOTS (Tanker Officer Training Standards), a new scheme introduced by Intertanko, as very complementary to ISM regulatory requirements and TMSA guidelines as perceived under the self-assessment scheme.
In this concept, "TOTS is more structured in terms of standards," she said.
"TOTS is more specific," she said. For example, "TOTS says, minimum required standards for all officer ranks with detailed computer-based assessment tools, while TMSA gives more strategic guidance by requesting the establishment of KPIs and the identification of training gaps for ensuring officer's competence."
On board coaching
Rene Jungbluth, technical director with Exmar Shipmanagement, talked about how his company is providing on board coaching to its crew.
Exmar operates three LNG carriers, four LNG regasification vessels, four very large gas carriers, eight mid range gas carriers, two semipressurised gas carriers, one FPSO, one accommodation barge and two chemical tankers.
The company aims to keep teams of seafarers working together all the time, so they get to know each other better. "Accidents are often caused by misunderstanding in teams," he said.
The coaches watch the seafarers doing their normal work, for example on the bridge or overhauling the engine; they do not provide on board classes.
Exmar also provides its crews with remote coaching over the internet and telephone, he said.
The company is also finding voyage data recorders very helpful in analysing any issues, which occur after the event and to check crew was doing everything properly.
Correcting your boss
One shipping company delegate talked about the challenges he faces encouraging junior staff to correct senior officer.
"We have cases when junior ABs did not challenge their superior officers on something they knew was going wrong," he said.
The different nationalities and cultures on board can cause particular problems, he said.
"We have to remove the barriers between the nationalities," he said.
Lyrintzis said that it comes down to trainingsenior officers how to encourage comments from their juniors.
Considering that a LNG vessel captain is in charge of a $300 mill vessel with a $200 mill cargo, it does not make sense to cut corners on training, she said.
Exmar's Jungbluth said that the solution was to encourage senior officers to make junior staff feel involved in what is going on. "We ask senior managers - do you involve ABs in your safety tours? Do you let your junior officers follow ABs? Do you involve ABs in safety meetings so they see you take it seriously?"
"That's the only way you'll get the team going," he said. "Not by writing procedures.
Leadership on board should have an eye for all these soft sciences."
Exmar regularly makes sure that its Pilippino crew understand and support the regulations, he said.
"We asked them about hygiene in the kitchen and in the cabins, to find out if they understood work permits. We found that they did. They know what the box (on the permit) was for," he confirmed.

Wighams open office in Greece
---The Wighams Group of Companies, which includes Wigham Richardson Shipbrokers Ltd ("Wighams") and joint venture company Hanjin Eurobulk Ltd, is please to announce the opening of a new office in Greece, which will commence trading on December 15th 2008 under the Harion Shipping Services Ltd. ("Harion") name.
Wighams, one of the oldest established (1893) British shipbrokers, has been active in the Greek market for over 100 years. The office opening reflects strong business growth over the past couple of years and demonstrates our faith in and commitment to the Greek shipping community. Our contribution to the Greek shipping community has on two occasions been rewarded with medals of commendation by the Greek government.
Wighams will continue to represent its existing clients world wide and the opening of this new office will focus exclusively on the Greek market, with a particular focus on the drybulk sector. Wighams has exclusive arrangements with both owners and charterers globally and has built an extensive network of both cargoes and tonnage.
95 Kolokotroni Street
185 35 Piraeus
TEL: +30210 4225220
Norman Balbes
HOME: +30210 964 5600
MOB: +30695 716 7277
Mike Moon
MOB: +30695 783 2718
Nicos Evangelou
HOME: +30210 625 2706
MOB: +30695 783 2719
Source: 15th December 2008, PRESS RELEASE