Transcript 2012

Many Faces, Many Futures
The New
Dynamic
Face of
Greek
Shipping
4th Hydra Shipping Conference
15th September 2012
Dr Martin Stopford,
President, Clarkson Research, London
1.
2.
3.
4.
5.
The 7 Faces of Shipping
Dynamics of Globalization
Greek Shipping Evolution
Six Challenges
Conclusions
How do you
play this
hand?
3. PUBLIC
COMPANY
2. PRIVATE
COMPANY
1. Shipowner
7. LEASING
COMPANY
4. PRIVATE
PARTNERSHIP
KG etc
5. SHIP
OPERATOR
6.
MANAGEMENT
COMPANY
We must build a
dynamic world
economy
• Before the 2nd World War
the world the world (and
shipping) was dominated
by European Empires
• In 1944 at the Bretton
Woods conference in USA
set the scene to change
the system
• The aim was to “globalize”
of the world economy
US Treasury Secretary Henry
Morgenthau at Bretton Woods in 1944
1944 Global Free Trade Policy
MEETING AT BRETTON WOODS IN USA
• At Bretton Woods in
1944 US Treasury
Secretary Henry
Morgenthau outlined
the objective of
creating "a dynamic
world economy ".
• The method was to
establish a new,
liberalized trade
regime
• To assist in achieving
this aim the World
Bank, the IMF and
GATT were founded.
13/04/2015
2nd April 2008
“The objective,
gentlemen, is to
create a dynamic
world economy”
Delegates at the Bretton Woods
Conference in 1944
5
The Result – A “Flood” of Trade 1950-2011
Index 1950=100
1,600
Sea Trade
World GDP
2012
Sea trade
16 times as
big as in
1950
1,400
1,200
1,000
800
Sea trade grew at
4.3% per annum
600
400
200
World GDP
Grew at average of
3.6% per annum
1950
1952
1954
1956
1958
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
0
2012
World GDP 8
times as big
as in 1950
The Shipbuilding Cycle
Shipyards expand to replace the ships built in the 1970s boom
Million Dwt
160
140
120
100
80
60
Deliveries 61
m dwt in 1976
Deliveries
Scrapping
Deliveries
162.5 m
dwt in
2012
FORECAST
Last phase
of 1970s
scrapping!
40
20
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
0
Globalization Part 1
7.50
Japan
6.30
Europe
3.80
N. America
China
S America
Africa
1950-2000
OECD’s 1.3 billion
population
0.8
0.6
0.20
2000-2050
6 billion Non-OECD
population want to
consume at OECD levels
0 1 2 3 4 5 6 7 8 9 10 11 12
Tonnes of sea imports per person a year
Sea Transport was mechanized:A new Shipping Model developed in the 1950s
Bulk
Bulk
Shipping
Homogeneous
cargoes
Bulk carrier, tanker
Liquids
Unit Load
Refrigerated
Manufactures
Specialised
Shipping
Container
Shipping
Specialized cargoes
Unitized cargoes
Air
Freight
Urgent cargo
Container ship
Air freighter
Specialised ship
The mechanization of sea transport lies at the heart of globalisation –
adding value takes place by inter-segment competition
Business Model Maturing
• Low returns, chasing
size
• High investment
requirement
• Finance problems
• Increased energy
costs
• Complexities of
globalization
Figure 3 The Potential Cargo Matrix (PCM)
2. Air
Freight
A
B
C 4. Bulk
Transport
Low
High
Volume tonnes per year
• Globalization
provided a
massive
opportunity for
independents
• Control of the fleet
moved from
imperial owners to
independents
• Greece led the
way
Greek Owned Fleet & Globalization
Shows Gross tonnage and growth rate
Million GRT
160
Greek owners used charter back $
loans to build the fleet in the 1960
140
2000s
5% pa
120
100
1990s
7% pa
80
1970s
7% pa
60
40
1960s
6% pa
1950s
18% pa
20
1980s
-1.4% pa
2010
2000
1990
1980
1970
1960
1950
0
Greek Finance1949 to 2012
Greece’s share of the fleet grew from 3% in 1949 to 18% in 2008
% World Fleet
1996-2012
1974-1990
20%
Steady at 15-17%
5% cut back
1949-1973
18%
during
Rapid growth based
1970s/80s
16%
on time charters &
recession
Euro$
loans
14%
12%
10%
8%
6%
4%
2%
0%
Equity
Markets
Bond
Markets
Euro$ market
starts 1958
2012
2008
2004
2000
1996
1990
1986
1982
1978
1974
1970
1966
1962
1957
1953
1949
Charter
backed
finance
Greek Owned Fleet - Top 10 Owners in 1969
No
1
2
3
4
5
6
7
8
9
10
Niarchos (London) Ltd
Onassis
Triton (Costas Lemos)
S. Livanos Shipbrokers Ltd
Capeside Steamship/Global
N.J.Goulandris
London & Overseas Freighters
Chandris
J.M. Carras
Rethymnis & Kulukundis
Total Top 10 Fleets
Total Greek owned fleet
74
77
55
47
55
36
41
44
44
29
502
GRT
1,398
1,300
886
860
851
659
532
455
360
332
7,633
26,932
% Fleet
5%
5%
3%
3%
3%
2%
2%
2%
1%
1%
28%
72%
• In 1969 the ten biggest international Greek companies
owned 502 ships, accounting for 28% of Greek owned
GRT
Greek Owned Fleet - Top 10 Owners in 2012
1
2
3
7
5
6
8
4
9
10
Major Group
No.
Angelicoussis Group
80
Dynacom Tankers Mngt
68
General Maritime
95
Enterprises Shpg.
94
Tsakos Group
75
Cardiff Marine Inc.
54
Navios Group
58
Danaos Shpg.
60
Minerva Marine Inc.
45
Marmaras Nav. Ltd.
43
Total top 10 Fleet
672
Total Fleet
GT
8,144
5,219
5,185
4,464
4,179
4,089
3,878
3,310
2,910
2,819
44,197
151,011
%
5%
3%
3%
3%
3%
3%
3%
2%
2%
2%
29%
71%
• In 2012 the ten biggest international Greek companies
owned 672 (much bigger) ships, accounting for 29% of
Greek owned GRT.
Greek Owned Fleet 2012
546 Greek companies owning ships over 5000 dwt
Number of companies
Number of
ships owned
• Top 10 own 672
ships
• The core are the
medium sized
companies with
3-15 ships
0
50 100 150 200 250 300
1-2 ships
246
3 to 5
149
6 to 10
11 to 15
16-20
21-25
26-35
Small
73
Medium
35
14
8
Big Owners
11
36-50
6
50-70
4
Top 10 Owners
Greek Owned Fleet: Ship Value
• Greek companies
owned ships worth
$70.6 billion
• $14.8 billion owned by
listed companies
• Medium companies
have assets worth $32
billion (funding
requirement of, say,
$20 billion??)
Fleet value $ billion
0
1-2 ships
5
15
Small
(5% value)
4
10
3 to 5
12
6 to 10
Medium
(45% value)
10
11 to 15
6
16-20
21-25
10
Big Owners
(27% value)
5
26-35
8
36-50
8
50-70
8
Top 10 Owners
(23% value)
Values at 1st May 2012 (over 5000 dwt)
Greek Owned Fleet By Type
Fleet value $ billion
0
4
8
10
Tankers 37%
VLCC
5
Suezmax
6
Aframax
4
Panamax 1
Products
10
Capesize
8
Kamsar max
4
Panamax
6
Supermax
7
Handymax
3
Handy
2
Gas
4
MPP 0
Container
7
Cruise & Ferry 2
Reefer 0
6
Bulkers 42% Other 20%
• Broad portfolio, 80%
tankers and bulkers
• Containers only 10%
which is low for the third
biggest world fleet
segment (5,100 ships
worth $100 billion).
2
1.
2.
3.
4.
5.
6.
Over-capacity
Energy costs
Regulatory focus
Globalization part 2
IT & Comms revolution
Container model
How do you
play this
hand?
Challenge 1: Shipping Over-Capacity
M. Dwt
1800
1600
World Cargo Fleet 1963-2013
Surplus shipping
capacity (% right axis)
% Surplus
47%
From 2009 world fleet
surges ahead of demand
37%
1400
1200
Demand for sea
transport runs
ahead of supply
27%
1000
17%
800
600
7%
400
-3%
200
-13%
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
0
Challenge 2: Energy Costs
THE SHIP USED TO COST MUCH MORE THAN BUNKERS BUT. TODAY BUNKERS COST MORE THAN THE SHIP.
40,000
$/day cost
35,000
30,000
2005
Ship costs
3x fuel
2012
Ship costs
half fuel
25,000
20,000
15,000
10,000
Bunker cost
1 Year TC Rate
5,000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
0
Based on Aframax tanker, 1 year TC rate and Rotterdam bunker price
Challenge 3: Regulation
• Requirement that new ships
must comply with the EEDI, a
clear attempt to drive efficiency
improvements
• The focus on air emissions;
ballast water; recycling; energy
efficiency and the carbon
footprint.
• The dilemma of gas oil versus
scrubbers and the uncertainty
over of which ballast water
system.
• Many shipyards, after a
decade when they were able
to sell standard ships, are
struggling to respond.
Eco-Ship Design – Complex
Fuel cost saving , charter cost increase $000
Shows the effect on fuel cost (green lines) & ship cost (yellow line) of
changing speed in 1 knot increments on 5000 mile voyage
400
Shipping lanes
350
Back haul
LNG
300
250
200
150
100
wind
NUCLEAR
scrubbers
best speed at
$1500/tonne
bunkers
Fuel Cells
best speed at
$200/tonne
bunkers
EEDI
No ballast
COATINGS
logistics
Hull form
Engineering
50
0
24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8
Note 1: Just difficult decisions
Speed of ship (knots)
80%
saving
Challenge 4: Globalization Part 2
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Fleet Ownership
Non OECD
Non OECD
44%
OECD
56%
OECD
1952
1957
1962
1967
1972
1977
1982
1987
1992
1997
2002
2007
• Over the last 50 years
the OECD countries
dominated growth
• Asia started to grow in
1970s & China in the
1990s.
• Non OECD trade
overtook OECD in 2006
• The next phase of
globalization will see
more countries; more
pressure on resources;
and more geo-political
tension (piracy a sign)
Billion tons of imports
Regional imports 1950-2010
Challenge 5: IT & Comms
Gordon
Moore
Invented “Moore’s Law”
Fibre optic cable network
Challenge 6: Container Business Model
The container business will be at the heart of change
Billion tons
1.8
1.6
1.4
1.2
1.0
0.8
In between there have been
long periods of conservatism".
0.6
Ronnie Swayne, Chairman OCL 1973
0.2
0.4
This chart shows container
cargo growing to 1.5 billion
tonnes today. In 2009 the
trade had its first serious
“wobble”.
y = 6.5684e0.0888x
0.0
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
“Over the centuries technical
developments in liner shipping
has been not so much a
continuous process as an
occasional leap forward
precipitated by a compelling
call for change.
Will the exponential
trend of 8.8% trend
continue?
1.
2.
3.
4.
5.
6.
Lousy hand so aim 1 is to survive
Major revolution in fuel costs,
technology, software and systems
Challenging regulatory focus
which the industry is still
struggling with
Globalization “Part 2” will change
the pattern of trade & it’s
“fuel costs and environmental
geopolitics
regulations are the Wild
IT Revolution will create “soft”
Cards”
opportunities
The container business is due for
a “great leap forward”
1. “Play the players, not the
cards.
2. Watch them from the minute
you sit down.
3. Play fast in a slow game ,
slow in a fast game.
4. Never get out when you are
winning.
5. Look for the sucker and, if
you don’t see one , get up
and leave because the
sucker is you”
Amarillo Slim’s Advice
Oceanic Steam Navigation
Company Ltd
• The company is better known
as White Star Line which
owned the Titanic
• 100 years ago the Chairman
was Thomas Bruce Ismay
• In the film Titanic he is the
arrogant man who ordered
the Captain of the Titanic to
go imprudently fast
• He looks bad, but he had a
problem the film did not tell
you about, which you will
understand.
Chairman Bruce Ismay
Chairman 1912
Oceanic Steam Navigation Company Ltd
5.5
7 year average earnings (in arrears)
4.5
Collapse of
earnings
1900 to 2010
4
Titanic loss 2012
3.5
Cut throat
competition
between
Cunard and
White Star
3
2.5
2
1.5
Bruce Ismay, Chairman
1878
1880
1882
1884
1886
1888
1890
1892
1894
1896
1898
1900
1902
1904
1906
1908
1910
1912
1914
1916
1918
£ per Gross Ton earnings
5
Seaborne Trade – 9 billion Tonnes
Other
15%
10
9
Container
15%
Sea Trade in 2011
Gas
3%
7
6
Other bulk
18%
5
.
Iron ore
11%
Coal
10%
4
3
2
1
2010
2007
2004
2001
1998
1995
1992
1989
1986
1983
1980
1977
1974
1971
1968
1965
0
1962
Billion tonnes of cargo
8
Oil
28%
Seaborne Imports – 9 billion Tonnes
Other
15%
10
9
Sea Trade in 2011
Gas
3%
7
6
Other bulk
18%
5
.
Iron ore
11%
Rest of the world
Coal
10%
4
3
2
1
2010
2007
2004
2001
1998
1995
1992
1989
1986
1983
1980
1977
1974
1971
1968
1965
0
1962
Billion tonnes of cargo
8
China
Container
15%
Oil
28%
Greek Owned Fleet - Ship Type Prospects
Ship
Type
Number
of ships
in fleet
VLCC
108
Suezmax
142
Aframax
155
Panamax Tanker
40
Products
512
Capesize
240
Kamsar max
144
Panamax
359
Handymax
286
Handy
275
Gas
90
MPP
53
Container
275
Cruise & Ferry
115
Grand Total
3139
Sdource: CRSL estimates
Prospects
Orderbook
Trade Growth
% Fleet
to 2023 % pa
20%
5%
24%
5%
8%
3%
10%
2%
12%
2%
29%
5%
38%
5%
38%
4%
25%
3%
21%
-1%
18%
8%
16%
2%
21%
8%
na
7%
20%
5%
Ratio
Orderbook
/Trade
-
4
7
3
5
6
6
8
9
8
21
2
8
3
4
The “Ratio” is “orderbook as a % fleet” ÷ trade growth trend