The 10th Hydra Shipping Conference, organized by the Fraternity of the Athenian Hydriots (www.aya.com.gr) was successfully concluded on Saturday, September 14th, 2019 at the Conference Hall of the Holy Cathedral of Hydra, under the auspices of the Ministry of Shipping, the Hellenic Chamber of Shipping, the Hellenic Marine Environment Association (HELMEPA), the Hellenic Shipbrokers Association (HSA), the Piraeus Marine Club, The Yacht Club of Greece , the International Propeller Club of the United States and the Hellenic Offshore Racing Club (HORC).
Mr John Sahinis, the President of the Fraternity of the Athenian Hydriots, welcomed esteemed guests and inaugurated the work of the conference and the aim of the Fraternity since its foundation in 1890 in Athens. Mr Sahinis thanked the speakers and the sponsors, for their precious support in making the Hydra Shipping Conference a landmark for the island of Hydra. Mr Sahinis also read the greeting speech of the representative of the President of the Greek Government Mr. Kyriakos Mitsotakis, General Secretary of the Aegean and Island Policy, Ms. Christiana Kalogirou, who was not able to attend due to bad weather.
The Mayor of Hydra, Mr George Koukoudakis, welcomed guests and acknowledged Mr Sahinis’ efforts in organizing the successful Hydra Conference for the past ten consecutive years and contributing to the island’s cultural heritage.
Mr George Tsavliris, Principal of Tsavliris Salvage Group, Chairman and Moderator of the 10th Annual Hydra Shipping Conference, introduced the debate, themed “The Controversy in Shipping – Is It Justifiable ?”, welcomed guests, and affirmed to the audience his own personal moto of the 3 P’s : Perseverance, Patience and Passion, which was most appropriate given the circumstances. Mr Tsavliris said, “ We all believe in the 3Ps – perseverance, patience and passion – or else we would not be here”. Mr Tsavliris expressed his desire to have an interactive debate, with emphasis on exchanging views between panelists and audience. Mr Tsavliris introduced speakers and panelists at this year’s Shipping conference, Dr George D. Pateras, Chairman of the Hellenic Chamber of Shipping and Deputy Chairman of Contships Management Inc, Mr Patrick Joseph, Director, Uirtus Marine Services Ltd. who traveled from the UK to honor us with his participation, Mr Yannis Triphyllis, Executive Commitee Member, Hellenic Chamber of Shipping, Mr George Gourdomichalis, President & MD Phoenix Shipping & Trading SA, Mr John Patiniotis, Finance Manager, Carras Hellas SA, Ms Alexandra Couvadelli , Senior Claims Director of UK P&I Club, Mr Dinos Arcoumanis, Former VP of City, University of London and Former Ambassador of Greece for Energy Policy, Mr Constantinos Rokkos, Managing Director TST Intl SA & Chairman of Maritime Committee of Propeller Club of Piraeus & the Regional Vice Chairman of the International Propeller Club for South Europe & Africa, Dr Christos Spandonidis, Chief Technology Officer, Prisma Electronics, Mr Panos Zachariadis, Technical Director, Atlantic Bulk Carriers Management Ltd., Ms Yanna Pavlopoulou, Managing Partner, Common Lawgic, Dr Pannikos Poutziouris, Rector, UCLan Cyprus Professor in Entrepreneurship Family Business Fellow, University of Cambridge, Judge Business School Chair, CEDAR, Mr Antonis Mavrakakis and Mr Emmanuel Vordonis, Former Executive Director of Thenamaris Ship Management Inc
Dr Martin Stopford, Chairman, Clarkson Research Services, Dr Eleni Thanopoulou, Professor Department of Shipping, Trade & Transport University of the Aegean & Honorary Visiting Professor Cass Business School, City, University of London 2018-2021, Mr Stavros Hadjigrigoris, MD of Maran Gas Maritime and Costas Kontes, General Manager V.Ships Greece Ltd, were among the esteemed panelists who were committed to joining us but were unable to in the end, due to dire personal and weather circumstances.
The conference consisted of five main areas of discussion with five group discussions: 1st group discussion: The Benefits of Creative Disruption, 2nd group discussion: Sources of Finance, 3rd group discussion: 2020 Sulphur Cap, 4th group discussion: Slow Steaming : A Short Term Effective Solution and 5th group discussion: Future Prospects.
Dr George Pateras, Chairman of Board of Directors of The Hellenic Chamber of Shipping opened the Hydra Shipping Conference with his welcome address, which after so many years, Dr Pateras’ words of wisdom have become an integral part of the conference. Dr Pateras stressed that the principals of finance have changed and this has created an imbalance in the laws of supply and demand. No one really knows where shipping is going, said Dr Pateras and with regard to the 2020 Sulphur cap deadline, posed the question, ‘Do the regulators sleep comfortably at night ‘? Dr Pateras pointed out that we should be looking at alternative sources of fuel and not to be so bent on curving gas emissions from ships, when vessels produce less than 3% of world-wide emissions.
Mr Patrick Joseph, Director, Uirtus Marine Services Ltd presented 1st group discussion, The Benefits of Creative Disruption, what he titled ‘Lost Opportunity’, in essence how much time is spent on administrative tasks per month by Master and 10 crew members. Mr Joseph said that by creating a pool of staff that will operate as an offshore team supported by state of the art IT applications & technology to support each vessel 24/7, 365 days/year, this can reduce the administrative burden on the Captain and his crew, allowing them time to concentrate on navigating the ship rather than administration tasks. ‘Why be Columbus ?’ asked Mr Joseph; Vessel owners over time will be able to reduce cost and potential crew size, improve on the safety of the vessel by reducing admin related distractions, develop a customized solution to the advent of unmanned vessels, provide the in-house commercial team with focused information about the vessel for making better commercial decisions, reduce the probability and impact of human error, and create a better working environment for the vessel’s crew. Mr Joseph concluded, by noting that a happy crew makes for a profitable ship and a happy ship is a safer ship.
Mr Tsavliris, applauded Mr Joseph’s presentation and said that indeed, over ‘analysis leads to paralysis’. When a Master is bombarded by administration tasks said Mr Tsavliris, we lose on leadership.
Dr Pateras too, agreed, that too much time is spent on administration and not enough on navigation. Mr Vordonis had a different view, and voiced his concern that if we remove the human factor ref unmanned ships, we instantly lose the passion that defines our industry and its people.
Yannis Triphyllis, Executive Committee Member, Hellenic Chamber of Shipping, opened 2nd group discussion, Sources of Finance, saying that banks and investment firms are no longer aligned with the needs of the shipowner. Since the crisis of 2008, we are living in a world of ‘dystopia’ rather than ‘utopia’. We see no more than an 8% return on our capital in recent years and Mr Triphyllis pointed out that things cannot be sustainable when one does not live in reality.
George Gourdomichalis, President & MD Phoenix Shipping & Trading, reaffirmed shipowners are entrepreneurs, “we want to get the best possible finance when we need it”. Alignment is critical said Mr Gourdomichalis between the ship owner and the financier. “You have to know when to get out…” Mr Gourdomichalis pointed out that as shipowners, “we should have gotten out in 2008 and taken a vacation for the next twenty years “ but “shipping runs in our veins and we have learned never to give up, to persevere”. Indeed, Mr Tsavliris said, the genius is in the “knowing to leave, when the going is still good”.
Mr John Patiniotis, Finance Manager, Carras Hellas SA, stressed the factors that a financier will examine when deciding on finance approval : the personality of the investor, is he/she a well known respected member of the community ? As an entrepreneur, do you have a vision and does your staff believe in this vision ? One needs to have a defined strategy, said Mr Patiniotis, what is the business development plan of the organization? Have factors such as cost efficiency and education been taken into account ?
Mr Gourdomichalis said that “this is a bad business really” (shipping), “all factors are against us, it is a microbe which eats up at us and we really should get out, but we don’t”. Mr Triphyllis voiced that as shipowers, “ we need to create borders/ limits by which we need to live by “. Mr Tsavliris eloquently closed 2nd group discussion, by explaining the meaning of wealth “πλούσιος” in ancient Greece meant, “πλήρης ουσίας” which translated in English, means “ full of substance”. A wealthy person was one with a respectable place in society, with ethos and high moral standards, someone who was educated and who believed in the values of family and religion.
Alexandra Couvadelli, Senior Claims Director, UK P&I Club, opened 3rd group discussion: 2020 Sulphur Cap with a presentation on Quality Concerns, describing the stability and compatibility of LSFO, practical precautions that need to be taken such as the development of onboard plans for fuel segregation and compatibility testing, tank cleaning and engine maintenance. Ms Couvadelli spoke of contractual considerations that need to be assessed, such as ISO 8217:2017 and any subsequent amendments, Publically Available Standard (PAS ) – ISO PAS 23263 – expected in Q4 2019 and bunker quality clauses, BIMCO Bunker Quality Control Clause for Time Chartering. Demands for LSFO will increase said Ms Couvadelli, we may have issues of undersupply of Heavy Fuel Oil ( HFO )in minor bunkering ports and that FONAR is not a “get out of jail free” pass. Circumstances in which submission of a FONAR will avoid the imposition of a penalty are unclear and will vary from port to port.
Mr Dinos Arcoumanis, Former VP of City, University of London and Former Ambassador of Greece for Energy Policy, asked the question, “ Is shipping the victim of the environmental regulations ?” Mr Arcoumanis emphasized that shipping fuel is the worst quality fuel. The issue of scrubbers is such an unnecessary waste of energy, instead we should be focusing on the quality of fuels. Shipping is focusing on an unnecessary burden pointed out Mr Arcoumanis, “ by 2040, a decision may be taken which will ban hydro carbon fuels from being burned”.
Dr Christos Spandonidis, Chief Technology Officer, Prisma Electronics, said that the changes that we are seeing now are similar to the period when we went from coal to fuel. It wasn’t until the industrial revolution that wide scale extraction of fossil fuels began and completely transformed the way humanity lived and worked.
Mr Constantinos Rokkos, Managing Director TST Intl SA & Chairman of Maritime Committee of Propeller Club of Piraeus & the Regional Vice Chairman of the International Propeller Club for South Europe & Africa, said no one speaks about the cost issue which is the biggest burden for the shipowner and this cost will go to the smaller companies, he said. Mr Rokkos voiced that he has not seen any reference by the regulatory bodies to the cost matter, “Why have they ( the regulators ) not asked for a trial implementation” ? “It is like we put the carriage before the horse”, said Mr Rokkos.
Mr Panos Zachariadis, Technical Director, Atlantic Bulk Carriers Management Ltd., in a presentation titled, “The relationship between the planet earth and the 2020 0.5% Sulphur Cap” described the Radiative forcing components impacting the earth or climate forcing (which is the difference between insolation (sunlight) absorbed by the Earth and energy radiated back to space. The influences that cause changes to the Earth’s climate system altering Earth’s radiative equilibrium, forcing temperatures to rise or fall, are called climate forcings ). Mr Zachariadis stated “we have to decide what our priority is, is it saving human life or saving the environment ? But then if the environment is destroyed, it will be the end of human life anyway”. Mr Tsavliris closed 3rd group discussion on Sulphur Cap, noting that we mustn’t forget that “the business of unsolved problems is a trillion dollar business”.
4th group discussion: on Slow Steaming : A Short Term Effective Solution – Has It Been Undermined ? was opened by Mr Dinos Arcoumanis, who stressed that ‘slow steaming’ is in fact the wrong term, the correct wording should be, ‘speed optimization’. Mr Panos Zachariadis, said that the problem is speed limits : “ How many more ships will we need if we impose speed limits ? And the process of building these extra ships, how much more CO2 will be emitted in the atmosphere for the construction of these extra ships?” Slow Steaming, emphasized Mr Zachariadis, totally negates studies aimed at / does not promote, new technology. Mr Constantinos Rokkos said that it is a pure consumption issue, what is the optimum speed ? Mr Rokkos asserted that we need to test each vessel dynamically in order to determine the optimum speed. Dr George D. Pateras said that we need to look at speed optimization based on total CO2 production. Mr Panos Zachariadis, voiced that the mistake was that the scrubber was presented as the equivalent of slow steaming. Mr Zachariadis believes that there will come a time when the IMO will enact power consumption rather the fuel consumption. Mr Stavros Hadjigrigoris, MD of Maran Gas Maritime and Costas Kontes, General Manager V.Ships Greece Ltd who was unable to join us, provided an excellent presentation on Slow Steaming which Mr Dinos Arcoumanis eloquently presented in former’s absence. In Mr Hadjigrigoris’ presentation, he described that human induced climate change is here and escalating rapidly, but not all scientists agree.
Shipping industry stakeholders should participate drastically in the fight for a greener future. The IMO 2020 0.5% Sulphur Cap will affect both new and existing ships, refineries and bunker suppliers.
Mr Hadjigrigoris gave us an overview of SOx, NOx and Greenhouse Gas (GHG) Emissions and stated that short term measure to be agreed by the MEPC before 2023 ; Mid-term measures to be agreed between 2023-2030 and long term measures to be agreed after 2030. The Energy Efficiency Design Index (EEDI) was analyzed and how it gave incentive to shipbuilders to design more efficient ships. Mr Hadjigrigoris presented the advantages and disadvantages of Mandatory speed limits and the need for R&D investment in alternative fuels. We will need a holistic approach, said Mr Hadjigrigoris, for long lasting, sustainable and safe solutions; “The Greek shipping industry can have a big impact and steer regulatory bodies; Green legislation will act as a filter for obsolete tonnage and ship operators not willing to invest in upgrading their fleet. We may see a comeback of ‘state owned’ or ‘oil major owned’ fleets.” Mr Zachariadis emphasized the need for synergy, instead of accepting what politicians are imposing on us, it is vital to have our own lobby in the European Union. Knowing ‘how’ to lobby is critical commented Dr George D. Pateras. Mr Zachariadis presented a study in The Naval Architect, which said that slow steaming may seem like the solution in cutting CO2 but if analyzed, the numbers may actually show something entirely different.
Ms Yanna Pavlopoulou, Managing Partner, CommonLAWgic , opened the last panel, 5th group discussion: Future Prospects with a presentation on New economic models that favor shipowners’ interests: Responsible innovation, creative circular marine Production, C2C (Cradle to Cradle), take or lease back, reuse, sharing schemes of equipment. Ms Pavlopoulou described the above processes known as upcycling, as the design for disassembling and transforming waste materials into new durable materials or services and products with longer environmental value. Shipping needs to realize, said Ms Pavlopoulou that academic research is a powerful weapon against or in favor of economic interests. “ Circular economy is the future in order to save raw materials; academic research and community engagement can drive fair rules of the Ball game !”
Dr Pannikos Poutziouris, Rector, UCLan Cyprus Professor in Entrepreneurship Family Business Fellow, University of Cambridge, Judge Business School Chair, CEDAR, presented ‘Back to Basics ? For Sustainable Success of the Greek family shipping firm’. Dr Poutziouris said that we need to ensure that the goals of the generations are aligned, “ A business that makes nothing but money is a poor business”. We must not use the family business to be fair parents, “there must be equitable distribution not equal distribution, ” emphasized Dr Poutziouris. We have the obligation to protect the source of our wealth and recommended that external professionals be brought in to the family business to take it to the next generation. Mr Poutziouris said one must pass on the company “to the worthy, not the entitled”. Among the main causes of wealth transfer failures is the breakdown of trust and communication within the family and the failure to prepare heirs for roles and responsibilities. Families in shipping share a legacy that keeps them connected but there are certainly challenges, pointed out Mr Poutziouris, which can be overcome with the values of trust, unity communication and professionalization. Mr Tsavliris commented that the shipping family business has a statistically longer continuity than any other corporate setup. Mr Antonis Mavrakakis closed the group discussion saying that, The excellent market, for the first time in history, from 2002 to 2007 that reached an astronomical level, led us shipowners believe that this will last for ever, because in the last 50 years in the shipping market we had experienced 2 years good market 3 years bad market, 3 good years 2 bad years. This situation forced us to become arrogant and to make the mistake to invest the astronomical profit we earned during 2002 – 2007, 3 times more in shipping but unfortunately the market collapsed after the Leman brothers bankruptcy and the subprime real estate crisis in the US, we dropped from the penthouse to below the basement. Since then the last 10 years we tried to recover from the loss we suffer in vain. Mr Mavrakakis advised that we need to be very conservative in the future, as there is a grave possibility, that we may face another more serious crisis than that of 2008.
Mr Emmanuel Vordonis, Former Executive Director of Thenamaris Ship Management Inc honored the Hydra Shipping Conference audience with his insightful closing words. Primarily he thanked Mr Tsavliris for his intuitive discussion topics and all speakers and panelists for their presentations and said that in his view, all matters raised are effectively leadership matters. We have learned to dance to other peoples’ music, said Mr Vordonis, instead of dancing to other people’s music, we create our own . If one has never felt the pain of losing someone from an explosion on a ship, then how can he possibly feel the responsibility of what regulations he is formulating ? Mr Vordonis said that scientists are regretfully the most dangerous cluster, they lack both the humanity and the humility. We need to develop leadership with a foundation on values which resonate from nature and God, emphasized Mr Vordonis. “We need to start playing our own music and the dynamic balances of the market will regulate the way forward”.
Photo: Antonis Mavrakakis, Manolis Vordonis, Giorgos Pateras, Giorgos Gourdomichalis, George Tsavliris, John Sahinis, Alexandra Couvadelli, Panos Zachariadis, Yanna Pavlopoulou Constantinos Rokkos, Pannikos Poutziouris, Patrick Joseph, Christos Spandonidis