Why Shipping Stays Offshore

A small article in Wall Street Journal brings back memories.In the article, John Coustas, CEO of container operator Danaos Corporation, reflects on the things that went wrong.

Interviewed by the Journal’s Anne Jolis, Mr Coustas points out that Danaos’ recent newbuilding programme is worth about $3.50 billion, and that newbuildings for the Greek shipping sector over the last ten years have been worth nearly $100 billion over the last decade. “Imagine if a small fraction of that had been ordered in Greek Shipyards.”
The memories: during a number of visits to Greece, I have heard a number of Greek officials preach the virtues of “bringing Greek shipping back to Greece”.  Much was said, but little was done. Investment by the largely “offshore” Greek shipping sector was discouraged. But this doesn’t apply to Greece alone. Much the same can be said of the rest of Europe, and of the United States.
In Greece, the Skaramanga and Elefsis yards, which could have profited handsomely from the maritime sector, went broke. Mr Coustas comments that when he went to Japan to  sign a construction contract for Danaos, he was approached by a representative for the yard workers, who wanted to thank him for giving them work. The worker told him: “We will do everything possible to build a good ship for you.”. “Today, of course, everyone agrees that Greece needs private-sector growth, but nobody really asks the private sector what is required in order to invest. Nobody listens.”
Mr Coustas describes how growing jobs and investment in shipping have been ignored by Greek governments and unions over the years, in favour of a grotesque enlargement of public sector employment — all funded by public debt. Which, he points out, is why Qatar has not gone ahead with its projected $5 billion investment in Greece.
There are obvious parallels with other developed economies where private investment has been driven offshore, jobs have been lost, and opportunities for sectoral growth have been squandered. Nowhere has this been more clearly illustrated than in shipping. The price being paid in Greece may be more spectacular than elsewhere,  but similar effects are on display in many other countries. Some of us bewail the fact that the shipping industry lacks articulate advocates, willing to take its case to the mainstream media. Mr Coustas’ willingness to speak out is a happy illustration that this need not be so.
Source: Maritime-Executive