I had to laugh when I read the article below from Lloyd’s List, a couple of days ago. Well, actually first I laugh, then I though to myself, “what an a@@&ole!”
Give me a break! There is allot of stupid things going on in the world, lending money to people who cannot afford to pay you back, so they can buy over valued houses, is probably one example, in a long list of stupid “things”, that has cause this worldwide failure of financial stability. Yes, probably overpaying for ships and splurging on ill timed capital investment is not a good idea either. Especially when logic dictates that economic growth of 10-15%, year over year, is not sustainable for any length of time.
He is just pissed that his firm invested in the “high flying, fast cars, and loose women” world of shipping a couple of years ago, when all was rosy looking, and now woke up with a worst hangover than they anticipated. I probably would feel the same, but as a seafarer, I don’t make enough to invest in much else but my family – which by the way, seems to pay far better dividends. His firm seems to advertise on their website, annual returns of 22.6% in 2005; yes, I guess compare to the other banksters, those are pretty paltry returns.
I can pretty much guarantee that if he was a “simple investor” looking for “respect and decent returns” in the shipbuilding industry over the same period that he is complaining about, he would be singing a different tune. Perhaps a tune like, check out my new Lamborghini, have you seen my 45 meter yacht, or wow, I didn’t know the printer could print that many zeroes on my bonus check.
I have no patience for this whining, if ship owners were really paying all that much for ship’s crew, I am sure there would not be so many indicators pointing to a world shortage of competent and qualified crew.
I am not all that smart when it comes to the financial wheeling and dealings, but one has to admit that perhaps an excessive amount of greed has blinded quite a few into believing they can do anything. Wunderkind investors blindly stomping around in all sorts of industries, without knowledge, common sense or consequences; well as long as the credit line was extended and the money flowed, they carried on.
I read with interest the recent article “Focus on a proper job” in Lloyd’s List, by columnist Michael Grey (3 November, 2008). In the closing paragraph, he writes “Some people say that ships, or at least the ownership of them, are best kept out of the capital markets, and history informs us that the relationship has not been a happy one.”
I understand the need for investors and high finance in this capital intensive industry, but from my perspective, I fully agree with Mr Grey’s assessment. Perhaps these “high priest of finance” and “captains” of industry, just looking for a little respect, and meager returns should work aboard “their own” vessels. I am certain he would probably have a different take on what is fair for decent people.
I will always remember going into a crew meeting on a ship I was on a few years back. The crew was generally always happy on any given day, enduring spirit of seafaring I guess, but this particular day I though was a good day. The company, a publicly traded company, had release the quarterly results a few days earlier, which happened to be the best the company had ever done in its history. Well, the meeting started out with a blurb on cost cutting and a couple of hours later ended on wage freeze, long after I had lost interest. The crew came out of the meeting feeling like they had just eaten a great big sandwich of “screw yous” because, although we had made record profits, we had not met expectations for the quarter.
This meeting, one in several, has undoubtedly shape my vision of these wheeler and dealers. I wholeheartedly agree with one of Mr. Doker’s statements in the article, “because of all the idiots in the market”, we are where we are; but I am pretty sure we will not agree on the identity of the idiots.
Pictured above are one of the ships they invest in, the MV Spaarnediep, picture from shiptracker.com. Pictured right is Mr. Geert Dokter.
Overpaying owners are ‘fuelling crisis’
Helen Hill Amsterdam, 4 November 2008 Lloyds List
OWNERS paying too much for ships and crews were partly responsible for the current shipping crisis, Hanzevast Shipping managing director Geert Dokter told the Mare ship finance forum, writes Helen Hill.
The industry stepped into this crisis in 2003 when it started buying ships at prices that were too high, he said.
“They were not building prices, but market prices,” the private equity firm added. It was “simply idiocy” to have paid $92m for a panamax bulk carrier that had been built five years earlier for $21m.
Owners had also started to pay seafarers too much, he said. A tug master who earned $6,000 per month a few years ago now earned $20,000 per month.
He said it was not fair that decent people, with long-term charters at decent prices, were going bust because operational costs had gone up so much “because of all the idiots in the market”.
There were more opportunities now than two years ago because prices had fallen again. Owners should never have been paid $70m-$80m for a panamax.
Private equity was a perfect way of financing ships, he said, as long as there was respect for investors and they could get a decent return. Most equity providers were interested in stability, he added. Hanzevast had recently raised equity for an offshore supply vessel, he said, for which €8m ($10m) was required but it was oversubscribed to the tune of €9.9m.
Labels: around the world, business, cheapness, seafarers