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The Development of

Greek Shipping Dynasties:


Past, Present, Future
Dr Loukas G. Glyptis


A historical review of Greek Merchant Shipping is crucial for one
to appreciate its nature and identity as well as the reasons behind
its persistent ranking on the top of World Shipping



Preamble

This presentation will focus on:

A historical overview of the development of Greek
Shipping dating as back as the 17
th
century

A more detailed review of the emergence and
entrepreneurial development of the Greek Shipping
Families

Current Trends and Conclusions


Content
History of Greek Shipping:
From the Post Byzantine to the
Industrial Revolution Era
(17
th
19
th
Century)
The 17
th
Century

During the 17
th
century, piracy and corsairy flourished in the
Mediterranean due to the declining naval control of the Venetians
and the Ottomans

Testimonies suggest that some Greeks joined piracy and corsairy
under the protection of different country flags, something which
led to the establishment of the first Greek families with a tradition
in piracy and corsairy

The 18
th
Century

The 18
th
century is characterised by wars that re-drafted the
geo-political map in Europe

Greek pirates and corsairs were preoccupied with smuggling
wheat and other supplies into ports embargoed by the
Empires of the time
The 18
th
Century



Greek pirates and corsairs earned enormous profits out of
the smuggling business, something which provided the
foundations for the establishment of Greek-owned shipping
in the early 18
th
century


Regions in which Greek-owned
shipping first developed
Up to the second third of the 18
th
century, Greek-owned
shipping developed around the Ionian Islands

Later on, the Isles of Cyclades joined the network of
Greek-owned shipping due to their overpopulation and
their administrative autonomy

Moreover, after the treaty of Kutchuk-Kainardji in 1774
the new trade routes between the Black sea and the
Mediterranean, introduced more islands of northern
Aegean (e.g. Chios, Psara)

Greek Shipping in the 19
th
Century

The pre Greek Revolution Era
(1800-1829)
Greek Shipping in the 19
th
Century

The 19
th
century was characterised by tremendous
developments in trade and shipping such as the
introduction of faster and larger ships
For Greek-owned shipping, enormous opportunities arose
due to needs in Europe for:
Import of raw materials
Export of industrial goods
At the time, the captain of the vessel was simultaneously the
ship-owner, the ship manager and the merchant


Greek Shipping prior to the Greek
Revolution


Greek vessels then, while obviously owned by Greeks, were
registered under various country flags due to an array of
economic and political reasons

However, the use of the Greek-owned sailing fleet to
support the Revolution resulted in its extensive destruction



Greek Shipping in the 19
th
Century

The post Greek Revolution Era
(1830-1900)
Greek Shipping in the 19
th
Century

Vessel Co-Ownership
&
Greek Shipping Networks
Greek Shipping in the 19
th
Century:
Co-ownership & Shipping Networks

The development of the Greek shipping venture at the post
revolutionary era was based on:

1. A traditional hierarchical organisational structure that
fostered discipline and trust to the commands of the
shipping family(ies) patriarchs
2. An entrepreneurial culture, which was indispensable to
an effort to retain the family property by pursuing
marriages even among members of the same family

Greek Shipping in the 19
th
Century:
Co-ownership & Shipping Networks

Ship-owning families formed a powerful network that was
established via offices in England, the Black Sea, Marseilles and
Alexandria
A distinctive characteristic of this network was the high trust
among their members, which was embodied in such mottos as my
word is my bond
At the early stages of the network, most families originated from the
island of Chios, but from other areas as well, e.g. Constantinople
Greek Shipping in the 19
th
Century:
Co-ownership & Shipping Networks



Families of the network of that time have predominantly
originated from Chios such as the Ralli, Rodokanaki, Skaramanka
and Skylitsi


Greek Shipping in the 19
th
Century:
Co-ownership & Shipping Networks
In 1870s, the network was dominated by families mainly descended
from the Ionian islands; the Chiot families declined mainly due to:

1. The adverse developments in the trade of wheat at the Black
Sea region
2. Lack of adaptation to technological advancements, e.g.
adoption of the steamship, the telegraph and the telephone
3. Many 2
nd
and 3
rd
generation members of those families,
invested in other commercial activities such as real estate
4. Poor investments to the British stock market during the
economic crisis of 1858-1859

Greek Shipping in the 19
th
Century:
Co-ownership & Shipping Networks

The prominence of a new group of families in the network did not
alter its distinguishing structure and culture, which were still based
on strong familial relationships and the security offered by their
common place of origin

An example of strong familial relationships in the network is a case
where members of the Empeirikos family (descended from the island
of Andros), married to members of other Andriot ship-owning
families such as Goulandri, Mari and Koulouthra


Greek Shipping in the 19
th
Century:
Co-ownership & Greek Shipping Networks

The Greek shipping network, despite maintaining its foundational
values, evolved and differentiated in that:

1. Its profit generation activities were focused on shipping and
much less on trade
2. Specialised in the shipment of certain bulk commodities
such as wheat and coal
3. The networks emphasis shifted to the ports of the Black Sea
and Constantinople


History of Greek Shipping:
The 20
th
Century
The Enduring Role of the Network in
embedding Greek-owned Shipping

(1900-1914)

Greek Shipping in the early 20
th
Century

In the 20
th
century, the domination of steamships over sailing
vessels, necessitated substantial investments on the part of Greek
ship-owners
During the transition era, it was a matter of knowledge to
ensure the new method of propulsion offered more than the
previous one
Well educated ship-owners or those who could trust and understand
naval architects and marine engineers were the ones who
transcended successfully to the steamship era

Greek Shipping in the early 20
th
Century



The number of Greek ship owners increased through the
persistence of vessel co-ownership, which was to become the main
financing and governance structure of the Greek shipping venture
and its use to exercise control and spread risk


Greek Shipping in the 20
th
Century

1900-1914
The network safeguarded the competitive advantage of Greek-
owned shipping in the 20
th
century, because:

The necessary capital for fleet renewal was provided by the
network members
Many captains were funded from ship-owning families in
order to enter into the co-ownership of vessels; this enabled the
latter to buy the vessel when its value was deemed to have been
low


Greek Shipping in the 20
th
Century

1900-1914

The network also contributed to the emergence of a number of
new ship-owners with origin from the islands of Cephalonia,
Ithaka, Andros, Chios/Oinousses and Kasos:

These islands are not coincidental; they reinforce the
importance of both common origin and affinity to the
sea as the core values guaranteeing the cohesion of the
network
Many Chiots and Aegnousiotes in particular, benefited from
the practice of vessel co-ownerships, giving rise to a number
of new ship-owning families: Livanos, Carras, Pateras, Hatzi-
pateras, Michalos, Margaronis, Georgantis, Lemos, Xylas etc.


Greek Shipping in the 20
th
Century

The Interwar Period (1918-1939)

Greek Shipping in the 20
th
Century

1918-1939
In the aftermath of WWI, 70% of the pre-war tonnage had
vanished
Greek ship-owners benefited from soaring freights in 1919-1920
due to the shortage in vessel supply; freights collapsed when the
world economic crisis erupted in 1929
However, in 1932-1935, while the main competitor fleets, i.e. the
British and the Norwegian, recorded low or even negative growth
rates, the Greek fleet grew phenomenally
How did this happen?
Greek Shipping in the 20
th
Century

1918-1939

This is due to what Helen Thanopoulou describes as the
anticyclical investment behaviour of Greek ship-owners:

It involves buying vessels when their prices are low and selling
them when their prices are deemed to have peaked
It is a major profit-generating strategy adopted by Greek
ship-owners which persists nowadays
Greek Shipping in the 20
th
Century

1918-1939


During the inter-war period single-vessel owners emerged

Single-vessel owners, based in Piraeus, sought to combine their
capital with that of other, large-scale ship-owners
originating from the same island, who possessed the expertise
and capacity to open an office in London

Greek Shipping in the 20
th
Century

1918-1939


If the London office was successful, so would be the affiliated,
Piraeus-based single-vessel companies

The London Schemes with excellent single ship clientele, were
based on the family relationships which created new dynasties and
strengthened others through marriages
Greek Shipping in the 20
th
Century

The Post WWII Era
(1944 - To date)
Greek Shipping in the 20
th
Century

1944 - To date


WWII spawned a number of changes in World shipping:
The centre of maritime operations shifted from Europe to
America
The type of commodities traded, which apart from dry cargo,
also included minerals, oil, cereals, coal, aluminium

As early as 1940, many Greek ship-owners move their offices
to London and New York


Greek Shipping in the 20
th
Century

1944 - To date
Greek-owned shipping boomed and ranked among the top
national fleets after WWII because of:

1. The introduction of tankers at the end of 1940 to late
1950s mainly by Onassis and Niarchos
2. The registry of vessels under flags of necessity such as
of Panama and Liberia, which promised significant tax
benefits to the ship-owners
3. The purchase from the US of 100 Liberty vessels (with
the provision of a 75% guarantee towards the purchase cost
by the Greek government) by such families as
Likiardopoulos, S. Andreadis, S. Livanos, Chandri Bros,
George Nicolaou and Goulandri Sons

Greek Shipping in the 20
th
Century

1944 - To date

Key characteristics of the Period:

Traditional ship-owners dominated the profession in the
aftermath of WWII
However, simultaneously with the return to economic growth, new,
smaller scale ship-owners emerged, particularly after 1960
The islands of Andros, Chios, Kasos, Cephalonia and Ithaka were
again, the birthplace of many of the post-WWII Greek ship-owners
However, ship-owners emerged from other parts of the country,
mainly Athens and Piraeus


Greek Shipping in the 20
th
Century

1944 - To date


These new ship-owners were primarily of two categories:

1. Merchants and other entrepreneurs who were a lot more
likely to fail due to their lack of know-how in ship
management. Successful examples of such ship-owners,
however, include Angelopouloi and Alafouzou
2. Merchant marines officers


Greek Shipping in the 20
th
Century

1944 - To date

Ship-owners who emerged from merchant marines officers:

Either became shareholders to a vessel or bought a usually old vessel
As they usually lacked the finance to buy the vessel, the seller ship-
owner was providing the necessary capital as a loan
Examples of ship-owners with seafaring experience are Capt.
Panayiotis Tsakos from Chios and Capt. Vasilis
Constantakopoulos from Kalamata


Greek Shipping in the 20
th
Century

1944 - To date

The phenomenal growth of Greek-owned shipping came to a
halt in 1973 when the OPEC world oil crisis erupted

Since then, Greek shipping was subjected to the immense
fluctuations and cyclicalities of world shipping that were
caused by a number of economic crises with the latest being that
of 2008


Greek Shipping in the 20th Century

The Financial Crisis (2008)
&
Current Trends

The Financial Crisis (2008) &
Current Trends

Greek ship-owners were faced with an unprecedented shortage
of liquidity due to:

1. The slowdown of the world economy
2. The oversupply of vessels in conjunction with substantial
freight rate decreases
3. The liquidity problems and restructuring issues faced by
Greek and international banks (e.g. RBS)

The Financial Crisis (2008) &
Current Trends


At the outbreak of the crisis some Greek ship-owners tried to
cancel contracts with shipyards for new-buildings

Income streams were disturbed as charterers demanded the
revision downwards of hire in time-charters

The Financial Crisis (2008) &
Current Trends

Despite the difficulties faced in accessing capital, Greek ship-
owners remained loyal to their practice of buying second-
hands and building new vessels in times of crisis:

1. In 2012 Greek ship-owners invested more than $1.5 billion
in new-buildings and more than $1 billion in second-hands,
while they invested extensively in LNGs
2. Since the commencement of the crisis, Greek ship-owners
have bought 137 and 193 vessels from German and
Japanese firms respectively
The Financial Crisis (2008) &
Current Trends
But how did Greek ship-owners manage to proceed with their
investment plans when the major banks providing the financing
faced severe issues of liquidity and private equity was short?

In 2012-13, the major source of financing was through issuing
new shares or through IPOs (e.g. Livanos, Pitas, Economou,
Tsakos and Haji-ioannou)
Ship-owners such as Frangou, Restis, Pappas, Tsirigakis and
Panayiotides established Special Purpose Acquisition
Companies in order to draw financing from the capital
markets
The Financial Crisis (2008) &
Current Trends


2014 has been quite encouraging so far due to a positive turn of
macroeconomic factors, including increases in freight rates, asset values
and new-buildings

However, there is no consensus yet whether world shipping will
exit crisis in late 2014 or in late 2015

The Financial Crisis (2008) &
Current Trends


Signs of recovery include:

The ongoing investment behaviour of Greek ship-owners
The partnership of Greek ship-owners with Australian
parties to transport their cargo to the emerging markets of
the Far East
The positive growth prospects of China and India
The Financial Crisis (2008) &
Current Trends
A snapshot of the competitive edge of the Greek-owned fleet
today (VesselsValue.com):

19% of the highest value vessels today on an international level,
equal the investment cost of the remaining 81%
Greek ship-owners own the greatest proportion of this 19%, i.e.
892 vessels of $52.92 billion value
Only in 2014 Greek ship-owners invested $2.5 billion to buy 99
second-hands and $1.25 billion to buy 34 new-buildings
The total value of the Greek-owned fleet is estimated to $101
billion and is the highest of all national fleets
Conclusions
&
Projections
Greek Shipping: Conclusions & Projections


Greek-owned shipping is still inextricably embedded in a network
of Greek maritime families underpinned by kith and kin
relationships

A snapshot of the continuity & evolution of
Greek ship-owners (20
th
century To date)





Greek Shipping: Conclusions

Most Greek Ship-owners originate from the Greek islands of Kasos,
Chios / Oinousses, Andros, Cephalonia and Ithaka
Many of the traditional ship-owners are based in London, e.g.
Goulandri, Chandris, Fafalios (GSCC), Niarchos, Empeirikos, Lemos,
Koumantarou, Hajipatera
New ship-owners originating from the above places emerged after 1960
such as Tsakos, Angelikousis, Veniamis (President of UGS), Palios
Post WWII, the above list is extended to include ship-owners from Athens, Piraeus
and the Peloponnese such as Kolokotronis, Prokopiou,
Konstantakopoulos, Karnesis
This proves that Greek-owned shipping is not static and
concentrated

Greek Shipping: Conclusions

Nevertheless, Greek ship-owners have adopted new modes of
business governance that move beyond the traditional values:

1. Have recruited foreign crews and managers to Greece or their
place of origin
2. Greek ship-owners have invested heavily in times of crisis,
earning enormous profits from the purchase and sale of
second-hands
3. Have moved beyond the perception that equity is the best
source of financing, and apart from resorting to borrowing, they
have listed their companies in stock exchanges
4. Have embarked on initiating joint-ventures with parties
beyond the national borders, even with ex- competitors such as
the Norwegians and the Germans

Greek Shipping: Projections

Greek-shippings future will remain bright as long as the Greeks
retain their affinity and interest in the sea and as long as new
Greek ship-owners emerge out of the maritime profession:

Greek Shippings history so far has shown that the most
successful and enduring ship-owning families emerged from
the marine profession
A crucial pre-requisite for the future of Greek shipping, therefore,
is the continued cultivation of Greek seafarers and marine
officers

Who is Who

Dr Loukas G. Glyptis is a Lecturer of Management
Accounting at UCLan Cyprus. His special interests lie
with the cost management and control of inter-
organisational relationships as well as with issues of
governance in family businesses. Loukas has a PhD
from the University of Birmingham on the inter-
organisational cost management and control (IOCM &
C) practices of the Greek Shipping industry.
He has developed skills on qualitative field research
and has embraced theoretical perspectives that
endorse interpretive, critical and relativistic strands of
social theory. He has presented in a number of
conferences and his first publications focus on IOCM
& C and the accounting of family businesses.
Dr Glyptis also holds an MSc in Accounting & Finance
from the University of Birmingham and a BSc in
Business Administration from the University of
Piraeus, Greece.

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