With a long and successful track record in marine transportation services, Andriaki Shipping knows the importance of serving clients and keeping their staff - from cadet to captain - happy.
To emphasise its dominance in the market, it has just confirmed a near-$200 million order for four 74,000 DWT product tankers. Andy Probert reports
As Greek financial tragedies go, the decimation of the shipping economy is one that will live long in the memory. However, there is a mere glint on the horizon in the name of Andriaki Shipping Co, a family-owned business that is still talking multi-million dollar orders and doing business with oil majors, shipbuilders and service providers. How?
Thanks to its excellent relations with its clients, running a tight ship on budget, staff and service, Andriaki is a silver lining in the dark clouds swirling the Greek economy. Technical Director Panos Kourkountis reflected the current malaise was a cause for serious concern and uncertainty, but Andriaki is a big enough player to shoulder the considerable responsibilities.To amply demonstrate this, it recently locked one of its VLCCs into a two-year time charter with Shell that according to market’s sources will yield $30.6 million in revenue in the next 24 months. It has also laid an order for four 74,000 DWT product tankers costing around $46 million each. Delivery is expected in middle-to-late 2017
The company, which is listed with two VLCCs and four suezmaxes, confirmed the tanker order with Korea's STX Offshore & Shipbuilding. Andriaki used to manage panamax tankers but the ordered units are understood to be the first coated ones of that size. Speaking of the VLCC lock-in, he said: "It is not the first time we have been in a long time charter with an oil major. Indeed, all our ships - whether on time charter or in the spot market - are mainly chartered by oil majors.”
Oil Majors
"Working almost exclusively with oil majors all these years we have adopted their requirements and best practices and our crews are familiar with their procedures."
Equally, the STX project is one of consolidation for the company. "We recently signed a new contract with STX in Korea for four LR1. Currently we have no LR1 in our fleet but we are not new in this sector.
"We had always managed a number of Panamax tankers and last year we sold the two Panamax tankers of our fleet. The new ships will be in a long time charter with a state oil company.
“We are always up to date with new specifications of the yards. However, rather than focusing on expansion, we remain focused on sustainability, adopting high standard and low risk. The mentality and the character of the company will not change. We will continue to operate ships of high standards at low risk."
Andriaki was established in 1953 by Nicholas J Goulandris as part of the NJ Goulandris Group. The Goulandris family, originally from the island of Andros, has a long tradition in ship owning going back to the second half of the 19th century. The offices and main activities of the NJ Goulandris Group were initially located in London while the crewing was in Piraeus, but the technical department moved to Greece in 1992 and the operation followed suit in 2008. Today, the company is located in Athens’ northern suburb of Maroussi and employs around 65 people. It first managed both bulkers and tankers, but now Andriaki Shipping manages only big tankers, Suezmaxes and VLCCs.
Mr Kourkountis said the company flourished due to its "excellent relation" with oil majors, ship builders and service providers, while being actively involved in shipping associations and committees.
"We closely follow the developments in the industry and the regulatory bodies and we implement the new regulations ahead of the due dates. By doing so we have time for proper familiarisation with new procedures and systems and, if necessary, to revise and improve them well before the regulatory implementation."
Adopting such innovative steps enabled the company to maintain its high standards within the industry.
First-Rate Ship Conditions
"Our ships are in excellent condition and this is reflected in our KPIs that are among the highest in the industry."
This is all underscored, said Mr Kourkountis, by the company's commitment to the individual. "We have a high retention rate of office personnel and crew. The company’s family-like atmosphere can also be found on board our ships and usually our officers stay for their entire careers from cadets to the top ranks and retirement.
"We have the full management of ships, technical management, crewing and operation. We do not use subcontractors; ship management is done in house and under our control.
"We have carefully selected our suppliers and service providers. Most have been evaluated for years for the quality of their work, their efficiency and cost. After many years' cooperation, there is loyalty in our relationship."
Companies with many ships enjoy better agreements with service providers and lower costs for purchasing spares/stores and provisions. "In this sense the size of the company matters,” added Mr Kourkountis. “To keep up with the competition companies of our size should cooperate and form pools.
"This way smaller companies can enjoy the benefits of the lower prices that come with a large volume while maintaining the flexibility and better monitoring of a small fleet. I believe this type of cooperation is a key for future success."
Navigating through the Crisis
And yet for all the positivity around the company, the crisis in Greece continues to grip from the workers' dining tables to the business boardrooms. He believes the crisis is here to stay.
"Greek shipping is a major contributor to the Greek economy even during these times of crises. To maintain our financial performance we have been called upon to be even more cost conscious and efficient," he added.
Mr Kourkountis pointed to a number of outside concerns that were causing "a certain degree of uncertainty" from a recent increase in tonnage tax to rumours of changes in the regulatory status of shipping companies and their taxation regime.
"Every company will review the new taxation rules and evaluate the available options to minimize the impact on the cost of ships’ operation. However we are not prepared to lower our standards and increase the risk.
"Greece is not a tax paradise for shipping companies. What Greece offers to shipping is a hub of people with shipping expertise."
He warned: "If the shipping companies are forced by an unreasonable tax environment to leave Greece, they will gradually lose the competitive advantage of the available shipping expertise. An exit of shipping companies from Greece will be a detriment to the country and should not be an option in the agenda of the politicians.
"However the example of Greece’s ship repair industry which was a prosperous sector that was destroyed within few years, due to miscalculations, poor judgment and bad handling of various involved parties does make me worry.”
Shipping’s Contradictory Future?
Looking to the future of shipping in general, Mr Kourkountis pondered: "There are so many discussions lately about the reduction of cargo volumes transported, the overcapacity of tonnage, the presence of funds and the reduced ability of the banking system to finance shipowners.
"Many studies and statistics aim to predict the future of shipping and yet the final conclusions often contradict one the other.
"Shipping has always been a very competitive environment and despite the differences the challenges of today are very similar with those of yesterday.
“In the history of shipping there are always new companies appearing and others going bust. The volatility of the market should not be underestimated.
"We must be prepared for both the ups and the downs. Having said that, it is expected that the valleys of the global economy will be followed by peaks. The only unknown is the timing of the ups and downs and I can’t risk a prediction."
A Careful Approach to New Systems
While welcoming the relative revolution in technology that is driving major changes in shipping and ship management, Mr Kourkountis offered a cautionary note.
"Shipping is a highly regulated industry and the rules should be continuously updated to keep up with the technological developments.
"New technology is not a talisman. Innovations should not be adopted just because other companies did so. The size of the company and its financial status, the type of ships and the specific operating profile should be taken into consideration for the evaluation of new technologies.
"In the market there is a tendency to overstate the benefits of the new system but actually not all the innovations do what they are made for. A careful approach is required in the selection of new systems.
"In our company the evaluation of new technologies is an ongoing task; it is part of our daily job. Our list of best practice contains some new technologies. We update the list adopting new systems when we are convinced that they are reliable and will give proven advantage."
"We look at new technology not only for the improvement of the technical performance and the operational advantages of a new system, but also for areas where the impact of the new technology is not easily quantifiable such as enhanced safety, reduction of the environmental impact of our operations or improvements in the living standards of the crew on board the ships."
He added: "I'm expecting the evolution will continue for years to come and I will not be surprised to see revolutions such as the construction of ships with corrosion free alloys, wireless communication between the systems on board, remote surveys and audits and so on.
source: Inside Marine magazine (January 2016)