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Greek tanker owners shun pooling

Greek tanker owners shun pooling
It has long been recognised that Greeks shipowners are a bunch, who by and large like to do things their way. Though “by and large” is a nautical term – “by” meaning sailing into the wind by tacking, and ‘large’ meaning sailing with the wind fully behind, therefore "in most circumstances"—Greeks also like to flirt.

The equity market is a present flirt. Not so long ago commercial pools were catching the fancy of tanker owners especially, not any more it seems.

Indeed, in a sign of what could be a sign of things to come, it's becoming increasingly apparent ship owners are opting out of commercial pools.

As the operators of the world’s largest tanker fleet, Greek owners were never big players in commercial pools, though a number of prominent owners did have some ships in pools, especially if trading in the Americas.

Long term relationships between ship owners and charterers could be one of the reasons supporting their decision,” explains Christopher T. Whitty, of Athens-based shipbroker Intermodal Shipping. However, he says it will be interesting to see if “these individual ship owners have the capacity to operate in a commercial way to allow them to reach out to the shippers to undertake larger COAs”.

Whitty, notes: "Obviously, the concept is commercial pools can concentrate similar tonnage under a unique management in an attempt to predominantly market the vessels as a single entity, undertake COAs and distribute the earnings to the individual owners under a pre-arranged weighing system.”

In other words he says in “a legal sense however, the pool manager is acting as a charterer”. “The pool manager’s main task and contractual obligation is to maximise long-term income by finding suitable employment for the pool ships, contractually placed under its control,” says Whitty

According to Whitty, "there are already certain shipowning groups in Greece controlling a fleet of dry vessels with similar tonnage and at the same time they have created affiliated entities that are acting as the commercial operators along with the technical operation”.

 

He says this structure is usually not official, however it seems shipowners are taking this step in order to approach the shippers directly under a separate entity which is under their control.

“In this scheme, optimum fleet deployment can be effectively managed both for vessels under the affiliated shipmanagement company and for the long term ‘chartered in’ vessels. This is not easily compared to an administrative controlled pool, however the operations are similar, since in case needed, the commercial operator can also ‘charter in’ other vessels from the spot market,” points out Whitty.

He says one of the main advantages, when affiliated companies of a shipowner also handles the commercial operations of certain vessels, is that there is no need to implement the complex weighing and revenue distribution systems seen in pools.

He explains: “Vessels can be time-chartered to the commercial operator for a trip or a period in order to cover the requirements of their trading activities. The vertical integration under these ventures is providing a certain degree of flexibility to the shipowners, allowing them to achieve a higher laden versus ballast ratio for the vessels that participate, minimising the ballast legs and the off-hire time. In reality, since the commercial operator and the shipmanagement company are under the same umbrella, fundamentally this venture cannot be considered as a commercial pool as we know it.”

With Greek tanker operators cutting their participation in tanker pools, and this includes George Economou, co-owner of the Heidmar pools, Whitty says it will be interesting to see if this type of vertical integration will be implemented by tanker industry.

The Intermodal broker concludes: “Amongst Greek tanker operators a certain decline in tanker pool participation is evident and it makes one wonder if we are now entering a trend, but here is no sign, as yet, of similar affiliations of like minded tanker operators / owners providing a safety net which was traditionally was offered by the pools".