The Greek Shipowners in the UK

In terms of tonnage, nearly twenty per cent of the world fleet of tankers and dry bulk carriers is owned by Greek shipowners. The development of the Greek fleet since the beginning of the nineteenth century has been described by Gelina Harlaftis (1996). The history of family firms, their growth and fragmentation and the continuous entry of new Greek firms has some similarities with the history of UK industrial districts analysed by Marshall (1920) and modern Italian industrial districts described by Pyke, Becattini, & Sengenberger (1990) which since 1960 have been relatively successful in the textile, clothing and leather goods industries. The competitive strengths of the Greek shipowners have been their knowledge and understanding of the shipping industry obtained from association with the industry over many years with, until recently, each generation obtaining experience of operating ships at sea. Also, shipowning is a prestigious activity among the Greek community, perhaps reflecting the past success of Greek shipowners, and this encourages successive generations to enter the industry.
        Towards the end of the nineteenth century Greek shipowners began to set up offices in London and this movement continued until the post-war period. Members of the Greek families have resided in the UK for long periods without losing their overseas domicile for tax purposes. In addition to the London Greek shipowners , other Greek shipowners have agency or broking companies in London .
        The ‘agency companies’ range from companies which carry out many of the functions associated with managing and operating ships to agency companies which fix charters after referring to more senior managers resident outside the UK and do not manage ships. Senior members of the families usually manage the London agencies. Apart from arranging charters, these managers are responsible for sorting out problems such as delays to ships and dealing with the media in the event of accidents such as an oil spillage. Although certain Greek shipowners have moved from London to Piraeus in recent years, many Greek families maintain a presence in London.
        An estimate made by a knowledgeable Greek shipowner was that Greek shipowners resident in London, or resident overseas with an agency in London which was managed by a member of the family, control about fifty per cent of the total Greek fleet excluding coastal shipping, ferries and liners – of the order of 850 ships, about 70m. dwt of shipping, and, in terms of tonnage, 10 per cent of the world tanker and bulk carrier fleets of ships over 1,000 tons. Without carrying out a detailed enquiry into the residence of shipowners, it is not possible to make precise estimates of the ships owned by Greek shipowners with members of families managing their London agency companies, but information obtained from other members of the shipping community for the 1997 enquiry and for this follow-up survey supported the estimates, and members of the shipping community with whom we discussed the estimates were comfortable with them. Although there are many independent Greek shipowners the pattern of ownership is skewed. Twenty Greek families control as much as a half of the 70m. dwt of shipping.
        As already noted, the ‘timing’ of chartering ships is an important element in the success of shipping firms. An advantage of London is that it has the greatest concentration of information about the charter market. Shipowners resident in London also have ease of contact with brokers, insurers, lawyers and other experts. Other critical decisions for shipowners are whether to buy and sell ships and the timing of these decisions. Effectiveness in picking the tops and troughs of the shipping cycle requires judgement, knowledge of the shipping cycle and experience.
        It is generally agreed that since 1980 the newer Greek shipowners based in Greece have been more successful than the Greek shipowners traditionally based in London in expanding their fleets. Whether this is attributable to their being willing to take more risks than the more mature London Greek firms is not clear, but there is an important implication of the difference in performance: the location of family members in London appears not to be a necessary condition for the success of family shipping firms. This may reflect the improvement in communications and ease and speed of travelling compared to the position in, say, 1960. Furthermore, the expansion of the shipping business and the expanded infrastructure in Piraeus, together with the support for the shipping industry provided by the Greek government, have made Piraeus and the surrounding area a more attractive location for shipowners.
Other Members of the Foreign Shipping Community
        In addition to Greek shipowners, shipowners, including owners of some large fleets, who are domiciled in Norway, other Scandinavian countries, the Middle East, Hong Kong, India and Eastern Europe, are resident in the UK or have agency companies or managers or employ service companies in the UK. Recently, the fleet controlled from London by Russian owners has increased and Italian owners have moved to London. An estimate made in 2002 by a major London broker showed 16.5m. dwt of shipping owned by non Greek foreign shipowners, including corporate owners, resident in the UK. However, certain of these shipowners are not at risk from a change in UK taxation of the foreign shipping community. In addition to the non Greek foreign shipowners listed as resident in the UK, there are non Greek shipowners with agency companies or managers in the UK. Here the focus is on the size of the non Greek fleet which would be affected by a change in the tax status of members of the foreign shipping community, shipowners domiciled overseas but resident in the UK or with agency companies managed by members of the families in the UK. Estimation of the size of this fleet is difficult because shipowners do not publish information about their places of domicile and residence. The estimate of the fleet owned by non Greek foreign shipowners resident in the UK reported earlier in this paragraph, information obtained from a firm of advisers to shipowners and assessments made by other industry experts who were interviewed suggest that it could be of the order of 30m. dwt, five per cent of the world fleet of tankers and bulk carriers, and equivalent to about 40 per cent of the Greek fleet at risk. An estimate reported in British Invisibles (1996) that ‘the presence of Far East owners, Russians, Norwegians and Americans may together generate as much business as the Greeks’ indicates a larger fleet. As for Greek shipowners, the pattern of ownership among the non Greek shipowners is skewed with a small number of families and groups of shipowners controlling much of the tonnage.
The Fleet at Risk
        Combining the estimates of the Greek and non Greek fleets at risk from a change to the taxation of the foreign shipping community gives a total of 100m. dwt of shipping, more than 1,100 ships, equivalent to, of the order of, 15 per cent of the total world fleet and with a gross value of about $20bn. The total, 100m. dwt of tankers and bulk carriers controlled by the foreign shipping community, at risk from a change in the UK tax regime, compares to the fleet registered in the UK, 9m. dwt. Thirty families and groups of shipowners control about half the total fleet at risk.
Source: Maritime London

Explore posts in the same categories: Greece, World

%d bloggers like this: