ECONOMY

Shipping sector concentrates but still expands despite crisis

Concentration of the Greek-owned merchant fleet is resulting in the sector being controlled by ever fewer hands, although the fleet itself is continuing to expand despite the financial crisis and the uncertainty that has dogged the global shipping industry in recent years. An annual survey by Petrofin Research found that although the number of shipping companies kept shrinking this year, the Greek-owned fleet expanded both in numbers and capacity.

The number of Greek-owned shipping companies has shrunk to 668 so far in 2014, or 22 fewer than last year, confirming the declining trend observed in recent years. The number of shipping firms has dropped by 12 percent since 2011, while in the last 17 years – since Petrofin started collecting such data – the number of companies has fallen by 28 percent.

The usual victims of this trend are small companies with one or two vessels. Petrofin figures show that the number of these smaller companies has dropped from 350 to 274 since 2011.

Nevertheless the Greek-owned fleet has expanded considerably in the last 12 months. Greek owners have a total of 4,707 vessels under their control this year, with a total capacity of 303.5 million deadweight tons (dwt). This represents an impressive increase compared to last year, as 134 new ships have been added, raising total capacity by 22 million dwt, or 8 percent, from 2013.

This has also led to another rise in average capacity per ship, which this year amounts to 64,500 dwt, against 52,100 dwt in 2010, and all while the global financial crisis has been raging.

Petrofin Research says in its report that this positive development in the course of the Greek-owned fleet is attributed to the great penetration of private investment funds in the shipping sector. By cooperating with Greek shippers and banking on the possible capital gains from the expected rise in chartering rates and ships’ values, these funds have provided significant amounts of cash for new investments.

The data on the evolution of the Greek-owned fleet show that the companies that remain in the market are continuing to grow, with each controlling an ever great number of ships. The concentration of the sector is resulting in the big companies getting bigger, as today there are 63 firms controlling vessels of at least 1 million dwt, against 60 companies in 2013. Similarly, the number of shippers with a fleet of at least 25 vessels each has risen from 35 in 2013 to 40 this year.