URSABLOG: A Citizen of the Greek Shipping City

I was having lunch with a friend of mine the other week, and the topic turned to the resilience and dominance of the Greek shipping industry. It was an interesting discussion.  

I am afraid that I was rather dismissive of the notion that Greeks uniquely have the sea in their blood. It was not that long ago that the United Kingdom had the largest merchant fleet in the world, and the UK really is surrounded by the sea, all the way around. The British used to say that the sea was in their blood too, until they turned their back on it. I am not saying that Greeks are not attached to the sea; impossible with such outstanding beauty along its coastlines. But the development of Greek shipping was as much as being pushed away from a land with few natural resources as much as the pull of adventure, glory and fortune. The sea was a way out of grinding poverty and a lack of opportunity: you cannot eat a sunset, however beautiful it is.

There are a number of cases, both in the more distant past and since the Second World War, where shipowning dynasties have been founded by seafarers and captains that then became owners. But being at sea is not a prerequisite in building a sustainable shipowning company, hard cash is usually more important. I do not for one minute want to disrespect any owners that come from a seafaring heritage – far from it – or that ‘cash is king’ in every situation, but let us be cleareyed about this: shipowning is a speculative investment that does not just require a knowledge of the ships themselves, but a knowledge of the markets and the world at large.

Vertical, ‘hands on’ management is certainly prevalent in Greek companies. The ‘in house’ model of management has been prevalent for as long as there have been ships owned by Greeks, and this will not change any time soon: there are as many companies setting up their own management companies to concentrate expertise for their own ships in one place as there are those who are subcontracting out.

But this ‘hand on’ style is also due to the family model of ownership. Looked down upon these days as inefficient and backward, this is where – rather obviously when you come to think if it – the ideal of ‘in-house’ management comes from. The lack of any meaningful consolidation between companies – criticised as commercially immature by outsiders – illustrates the durability of this hands on, in-house, family owned style. It also restricts fleet development.

When there is family ownership, the strategy of the shareholders is different: the investment horizon stretches far further into the distance. Let me give you a common example from outside shipping: new parents buy some land to build a block of apartments. They live with their young family on the ground floor and renting the flats  above as the family grows. The children grow up and may (or may not) move out, but the understanding is that there will always be a home for them there, whether or not they marry and/or have children. If they do have children, they may move back in as the (now) grandparents move upstairs. There is a nice Greek expression along the lines of “the grandparents are twice the parents”, and apart from childcare it also expresses the dedication parents have even before they become grandparents. I challenge my Greek readers to dispute this: however frustrated they may be by their families for periods of their lives, their families are also a source of great affection and pride, security and education. Throw ships into the mix (or vineyards, or construction, or dry-cleaning, or whatever) and then you see why family companies dominate Greek business.

This attitude does not lend itself well elsewhere, particularly the Anglo-Saxon parts of the globe. The desire for immediate and constant profit, an ever increasing share price combined with a reliance on credit and a lack of cash in reserves usually overrides other considerations. This cannot work in shipping for very long: there will be times, we know, where profit will disappear and cash will evaporate however well the company is run.

But no man, or family, or company is an island and the business of shipping requires a robust and efficient network of information, resources – human, cash, or whatever – built on trust. Thankfully, whilst cash may be hard to find, you will never be too far away from a reliable source of information, if you know whom to trust. Again this gossipy nature of Greek shipping may be looked down on from more ‘grown up’ countries elsewhere, but it is an essential element of the success of Greek shipping, and it is also why it is so hard to break in and establish a new venture unless you already know the game.

What I was trying to say to my lunch companion was that just being Greek was not enough to be successful in shipping; genetics are no guide to success, and to think otherwise will just lead you into the trap of exceptionalism, which is never good for business. There are, however, perfectly good historical, geographical, sociological, economic and cultural reasons why Greek shipping continues to grow and we should not be blind to them. The trick is to understand them, and learn from them.

I would go one step further however, and argue that we live and work in the ‘Greek Shipping City’. This is an idea borrowed from Gelina Harlaftis, the ‘dispersed maritime city’, originally coined to describe the unity of the Ionian and Aegean islands that developed the Greek fleet from the eighteenth century onwards. My Greek Shipping City is a place that is connected by an informal network of business and information that spans the world, a place where to be a citizen carries certain rights and responsibilities which are mainly unspoken but generally understood and adhered to, a place where trust and reputation still matters, a place that outsiders cannot completely understand, a place not exclusively Greek but also not exclusively in Greece, a place that has foreigners as citizens, but where many Greeks could never live. You don’t decide to live in the city, the city chooses whether you will be a suitable citizen. The city is in the world, but not in one place. The heart of the city cannot be found, but its centre of gravity shifts from one place to another continually. It is not just about money, or ships, or cargoes, but about all those things that go into real cities: people.

I am often criticised when I say that shipping is all about relationships. It seems rather a glib and easy way to state the obvious without saying much at all, but what started out as an accidental observation has gradually become a philosophy I cannot escape, which is probably why I keep returning to the theme again and again. The success and longevity of the Greek Shipping City as an idea has at its root a knowledge of the operation of ships at sea, hands on-management (commercially, technically and operationally), efficient and reliable networks, the resources to invest, and invest them over a period of time that will result in returns that will benefit the next generation or two. And like every city it is always changing as the fortunes of the people and families living within it make their way through it.

I like living in cities, and I like living in the Greek Shipping City. And the great thing is that you don’t actually have to be in Greece to live in it, although with all the good things that Greece has to offer, it is probably better if you do. It certainly works for me. More than that however, in my view the Greek Shipping City, and all that it contains, is the reason that Greek shipping has developed to be such a success story, but like every city it needs to be appreciated, for its past, present and future, to continue to be relevant in an ever changing world.

Simon Ward

www.ursashipbrokers.com