Professor Manered Zachcial
4. Shipping Companies
4.3 The Greeks
markets after 1974 and finally led to bankruptcy in the late 1970s. His chartering strategy made him the shipowner who “had more tonnage available for assignments in the red-hot spot market” than any other, but a few years later made him the one who “had more tonnage laid up than any other”. Thus, his
“spectacular rise was overshadowed by his even more spectacular downfall”.65 But Norway is a maritime nation, and apart from the above mentioned well- known shipowning families, the backbone of the fleet still rests in the hundreds of small shipping companies active in shipping for shorter or longer periods, which although not as innovative and dynamic as the larger companies, have contributed to making Norway among the top maritime nations worldwide. The shipping companies are at the core of the Norwegian Maritime Cluster which consists of various internationally competitive sectors (shipping, ship brokers, ship consultants, yards, equipment, other shipping services, shipbuilding, shipbrokering, classification etc) located along the Norwegian coast.66
almost exclusively of ocean-going vessels for the transport of bulk cargoes and tramp ships engaged in the international cross trades. By comparison, the fleets of Russia, Austria-Hungary, Italy, France and Spain consisted mostly of liners operating on regular routes and owned by large, often subsidised, shipping companies which essentially carried passengers and industrial or package products.68
During the interwar period world shipping faced severe problems stemming from a contraction of seaborne trade, decreased world migration and increasing protectionism. World War I weakened Britain and allowed competitors to challenge its maritime hegemony. The Greeks took advantage of the disposal of tonnage at extremely low prices and were able to expand during the worst period of the crisis. The fleet, which suffered severe losses during World War II not only reconstructed itself after the War, but also grew at an unprecedented rate.
Until the 1960s the main maritime nations remained the same, with Britain and the US clinging to their decreasing share of world shipping, followed by Greece, Japan and Norway. Although flags of convenience were widely used, in the immediate postwar years they were resorted to more extensively by Greek owners. The 1970s marked the start of a new era; this was characterised by the final loss of the predominance of European maritime nations, with the exception of the Greeks who have maintained their leadership to the present day.
Timely adjustments to changes of world trade and to technological shifts kept Greek shipowners in the forefront of world shipping. The spectacular growth of Black Sea grain exports in which the Greek sailing ship fleet was involved, provided the capital for the subsequent transition from sail to steam by Greek shipowners that was completed at the turn of the twentieth century. After World War I the lost steamships were replaced by the “standard” type of cargo ships that were built during the war while after World War II, the lost ships were replaced by the war-built “Liberty ships” which became the standard dry-bulk cargo vessels for the next 25 years.
Part of the Greeks’ success during the postwar period was due to their entry into the tanker market in the late 1940s and the 1950s. The first shipowners to do so were Aristotle Onassis and Stavros Niarchos, both of whom benefited from the Norwegian experience in tankers at this propitious international conjuncture.
Niarchos’ and Onassis’ expansion strategy was quickly followed by many of the
successful “traditional" shipowners, primarily those who had settled in New York during the World War II. The trailblazers’ success also created access to the American financial market for other Greek shipowners. By 1974 the Greek- owned tanker fleet had become the largest in the world, comprising 17% of the global fleet. Starting from scratch in 1945, this fleet reached 8.2 million grt in 1965; 14.7 million grt in 1970; and 21.8 million grt in 1974. Tankers represented between 40 and 48% of the overall capacity of the Greek-owned fleet in the years 1958–1975.
Family capitalism that prevailed in the structure of Greek-owned maritime business was also pivotal in the success of the fleet. At the beginning of the twentieth century there were about 200 families, all specialised now in shipping, running 250 shipping firms. By the end of the twentieth century about 700 families were running more than 1,000 shipping firms. After a short interval in New York, in the 1940s and 1950s, by the last third of the twentieth century the Greek-owned fleet had the same operational centres (Piraeus and London) as at its beginning, but its entrepreneurial network was not now confined to European waters but extended to all oceans of the world.
The management, and all the branch offices of Greek shipping companies throughout the twentieth century continued to be in the hands of members of the same family
or co-islanders. In this way kinship, island and ethnic ties ensured the cohesion of the international Greek maritime network. The unofficial but exclusive international “club” was extremely important for their economic survival. It provided access to all the expertise of shipping: market information, chartering, sales and purchase, shipbuilding, repairing, scrapping, financing, insurance and P & I clubs. It also provided consultancy from older and wiser members and information about the activities of the most successful members of the group.
Imitation proved an extremely useful “rule-of-thumb". The main strength of the Greeks then, has been the formation of an exclusive “Greek” transnational network of family enterprises that interacted with local, national and international shipping networks and organisations, local, national and international financial institutions and organisations.
The regional dimension has also proved extremely important in Greek-owned shipping. During the first two thirds of the twentieth century the so-called traditional shipping families, all involved for multiple generations in shipping
activities, predominate and came from the islands of the Ionian and the Aegean.
On the eve of World War I the biggest shipowning groups came almost exclusively from the islands of the Ionian sea, as a continuity of the entrepreneurial networks of the nineteenth century. Apart from the Embiricos family that originated from the Aegean island of Andros, and formed the most powerful shipowning group of the first third of the century, the rest, Dracoulis Bros, Svoronos, Lykiardopoulos, Yannoulatos and Vaglianos came from the Ionian islands of Cephalonia and Ithaca (see Table 3). The importance of shipowners from Chios did not begin but later; in 1914 only the shipowning groups of Scaramanga and Michalinos stemmed from Chios.
If the Ionian Sea dominates in the first third of the century, in the last two thirds the Aegean took over. It is in the interwar period that the family groups of the maritime islands of the Ionian were replaced by the family groups of the Aegean islands. In this way, the five brothers of Ioannis Goulandris from Andros, the five sons of Elias G. Kulukundis from Kasos, the sons of the Embiricos from Andros, the four sons of George Livanos, the two sons of the Ioannis Chandris and those of the large family of Laimos, all from Chios, served as officers on their fathers’ steamships and eventually became directors in the offices in Piraeus and London and shipowners themselves. For more than 60 years, as Table 3 indicates, the same names of the above mentioned families figure in the top ten positions of Greek shipping. The only “ foreigners” that broke into the tightly knit shipowning circle were Aristotle Onassis and Stavros Niarchos, both of whom, however, followed the rules. They married within the traditional shipowning circle – the daughters of Stavros Livanos. The importance of the old traditional families, most of them active for at least three generations, eventually started to fade and give way to new shipowners; the new blood in Greek-owned shipping came from masters, first engineers and employees of shipping companies. In the list of the top shipowners of 2008 as it appears in Table 3, none of them came from traditional families. They were new, postwar shipowners: Angelicoussis, Economou, Tsakos, Prokopiou, Diamantidis, Restis, Georgiopoulos, Haji-ioannou, Martinos and Panayiotides. The strength of Greek- owned shipping was that it managed to reproduce itself and provide new and dynamic entrepreneurs that enlarged the fleet to unprecedented size at the beginning of the twenty first century. And as in the Norwegian case, apart from
those found in the top, it is the hundreds of medium-and small-scale shipowning companies who form the backbone and the seedbed for the expansion of Greek- owned shipping.