Haralambos Fafalios:The maritime cluster is of paramount importance to Greece and any destabilization of its framework would be very detrimental to the country and the industry

FROM THE CHAIRMAN

Dear Colleagues,

I would like to present the G.S.C.C. Annual Report, which gives a resume of the more significant items affecting Shipping and the national and international legislation that is likely to come into force.

Whilst most of this legislation is primarily being dealt with by the I.M.O. on an international level, there are many issues which are surfacing on a regional level, especially the EU, but also the US, Australia, etc, and they too affect the way the industry develops.

The G.S.C.C. monitors developments, is well in touch with all the relevant organizations which represent the shipping industry at national and international fora and plays a proactive role in analyzing many of these new measures and where necessary commenting on their practicability.

It would be an understatement to say that we are being constantly flooded by new laws and legislation that are insufficiently thought through and have not had sufficient feedback from all the relevant industry bodies.

The world economy, whilst improving in general is still fragile and some major questions arise.  Is China’s shadow banking system strong enough to survive any untoward shocks?  Are the growth areas, such as the BRIC zone beginning to slow down and in turn no longer promise an ever increasing flow of trade?

Are the developed economies of the U.S.A, Europe and the Far East reaching a new bubble which might be burst by higher interest rates?

These, and many other considerations will dominate our global thinking and help our outlook on the Shipping markets.

Whilst the piracy issue has not in any way gone away it seems to be more prevalent in West Africa than in East Africa and our focus should be on finding a coherent global solution to this problem and more co-operation from the governments in question.

The instability in the Ukraine and the Middle East plus the possible maritime consequences of China’s increasing territorial ambitions, makes one wary of the repercussions they could have on Global Shipping. 

Financially, the shipping industry seems to be going through an energetic growth phase due to an enormous infusion of money from non-traditional sources.  This wave of new capital, reaching perhaps $30 billion a year, is greatly affecting the equilibrium in many markets and the global orderbook of Tankers, Bulk Carriers, Gas Carriers, Container Ships and Offshore vessels have reached new highs.

Coupled with today’s freight markets, which in Bulk Carriers, Tankers, Container Ships and L.N.G. Carriers are trading at somewhat depressed levels, one wonders what effect his huge influx of new ships will have on an already rather precarious trading environment.

It would be surprising if more Shipping Companies, Charterers, Shipyards and Banks do not reach levels near to meltdown in such an environment.

With these ever present pressures on revenues and operating costs, the Shipping Industry can ill-afford the implementation of a new raft of extremely costly regulations which are not yet maturely thought through or adequately investigated regarding their practicability.

The main legislative areas giving rise to such concerns are the following:

Ballast Water Treatment

The real impact of this deeply flawed Convention is becoming clearer. As ratification is drawing closer, the dual implementation timetables of the IMO and the US are causing serious concern.

In 2016, Vessels 15 years old and above will face the stark choice of either fitting BWT systems at the next Special Survey after 2016 (IMO) or the next Drydocking Survey after 2016 (US), thereby significantly curtailing their economic lives if they wish to trade in American waters.

The ICS initiative calling for the enhancement of the robustness of the current type-approval process for the very expensive new treatment systems, clarification of the procedures that will be followed during Port State Control, and some assurance to shipowners that in good faith have already installed new equipment (or are about to do so) that they will be regarded by the authorities as compliant, must be strongly supported.  Pragmatic positions of countries such as Japan regarding sampling criteria of treated ballast water are worthy also of encouragement.

SOx

The use of fuel with 0.1% sulphur limit content within the IMO designated Emission Control Areas (ECAs) must be complied with by 1 Jan 2015 for vessels trading in these areas.

This event will focus the shipping industry’s concern on enforcement and on a reasonable, consistent treatment of all vessels entering these zones in the EU and the US.  Will the Port States be able to identify and deal with time charterers and bunker suppliers who are largely responsible for providing the fuel with correct specifications? When will they realise their responsibilities?

Ship operators must do as much as is possible to ensure that the correct fuel is supplied and used.

What mechanisms exist to ensure a level playing field where all ships are treated equally and fairly?

Harmonised Common Structural Rules(H-CSR)

Much work has been done by both IACS and industry to arrive at the 2014 draft of H-CSR  for tankers and bulk carriers.

The shipping associations must not reduce the time and resources necessary to assist IACS in ensuring that the final text submitted to IMO is as unambiguous as possible and technically adequate to regulate the construction of robust vessels which are fit for purpose. Improvements in fatigue life assessment, welding, strength calculations, buckling analysis, oblique seas loading for bulk carriers, addition of further prescriptive requirements are all necessary to make the 2014 draft more effective.

The shipping industry must closely follow the implementation of H-CSR from day one and not allow the new rule set to be diluted with vague expressions and un-checked interpretations from the shipyards’ side.

Finally, Greek shipping in conjunction with ICS, Intertanko  and  Intercargo must strive to confirm that “Rules must be Rules” and that H-CSR will not simply be  a design tool but will contain sufficient prescriptive requirements in an attempt to safeguard against the “black box” finite element calculations and output of the current CSR and future H-CSR.          

IACS and IMO

IACS has provided numerous Unified Requirements(URs) and Uniform Interpretations(UIs) to IMO in recent years  as a “fait accompli”. A good example is the recent debate around water ballast tank testing. No transparency exists within the IACS process. The shipping industry is not privy to the working groups that develop these URs and UIs unilaterally. This practice must stop and IACS must accept a more open process with significant shipping industry involvement, prior to the documents being submitted to IMO.

IMO and Class “Equivalent” Requirements and Rules

A gathering trend for “Equivalence” is emerging. Without transparency, debate and strong prescriptive safety requirements these equivalent rules will lead to losses of ships and seafarers lives.

The problem with Cargo Liquefaction has not gone away and we strongly urge Charterers and Shippers not to compromise ship and crew safety by performing less than adequate T.M.L. tests, or even worse misdeclarations.

The one ray of hope still out there is the significant renewal of the Greek Fleet through a sizeable newbuilding programme and a pruning of older less efficient vessels.

Through the newbuilding and secondhand market Greek Companies are upgrading their fleets with not just Bulk Carriers and Tankers but also with a significant number of Container Ships, Gas Carriers, Chemical Carriers and Drilling Ships raising even higher the global ranking of the Greek controlled fleet, whilst concurrently reducing the average fleet age. 

The Greek owned fleet’s emphasis on high-spec, high quality ships means that it has become the bearer of the global standard and that shipyards and Classification Societies must actively support the Greek Companies’ efforts to build robust, environmentally friendly and efficient tonnage.

With the emphasis on specialised as well as standard type of Ships, demand could not be greater for a new generation of seafarers who are able to man these vessels.

We urgently stress the need for more and better maritime education and hope the government will take heed of this and work together with industry bodies to provide the manpower required now and into the future.

Shipping is still one of the two main drivers of the Greek Economy and the Government should not underestimate or undermine its importance to the future prosperity of Greece.

With this in mind, we find it counter-productive for the Government to have an unstable attitude towards the industry. On the contrary, it must adhere to its word so as not to create uncertainty and thus risk weakening the Greek Flag and Greek employment opportunities.

The maritime cluster is of paramount importance to Greece and any destabilization of its framework would be very detrimental to the country and the industry.

The Committee does all that it can to keep close contacts with all major International Organizations, such as the IMO, INTERTANKO, INTERCARGO, BIMCO etc, the EU, National Governments, MPs and MEP’s in order to express our views and positions.  Our depth of experience and knowledge is such that we can positively contribute to the debate on any maritime matters and we regularly attend meetings of all these bodies and are kept well informed of future plans and legislation. 

Our close ties with the Union of Greek Shipowners are such that we present a united face of all Greek Shipping on both the national and international level.

We are also appreciative of our close contacts and warm relationship with the International Group of P & I Clubs and as such we have Club Chairmen and Directors on our council who keep us closely informed of all developments, allowing us to make our views known to the Club Managers in a timely manner.

Being in London gives us the privilege to maintain our long held ties with the Baltic Exchange, U.K. Chamber of Shipping, Maritime London, I.C.S. Intercargo, and all other London based organisations.

Our relations with the major classification societies is also very close, not least due to the fact that many council members also serve on National and International Class, and Technical Committees and play an active role in the support of I.A.C.S. and its task.  However this does not stop us from trying to improve vessels standards.

Finally, I would like to thank our Member Offices, the Council and the Secretariat for their invaluable support, which allows us to continue our work in fostering co-operation, trying to avert misguided regulations and keeping our membership well informed.

I am particularly grateful to our vice-Chairmen, Constantinos Caroussis, John M. Lyras and Dimitri Dragazis our Treasurer Diamantis Lemos, our Honorary Chairman Epaminondas Embiricos, and Stathes Kulukundis, Spyros Polemis and Matthew Los for giving unstintingly of their time.  My special thanks to Stathes Kulukundis and his team John Hadjipateras, George Embiricos and Filippos Lemos without whom our many documents including annual reports, monthly bulletins etc would not be as professionally prepared as they are.

Our Secretariat of Konstantinos Amarantidis and Mrs Sylvana James must also be congratulated for their hard work in creating a smoothly run committee. 

With kindest regards,

Haralambos Fafalios

Chairman