Industry hosts first Cayman Islands shipping conference

The Cayman Islands Shipping Summit 2013 drew scores of participants from Cayman and around the world to the Grand Cayman Marriott Beach Resort to discuss the maritime and shipping industries. 

While the shipping sector has shared the pain of the global economic downturn, speakers identified several areas of opportunity for future growth, including the Panama Canal expansion, the shale gas rush in the United States and continuing urbanisation of China and southeast Asia. 

“The economics of the world, the economics of shipping are not so good right now. I’m not desperate because I’ve seen it before. In Greece, we say, ‘the sea never dies.’ That is a very important thing,” said Philip Embiricos, past president of BIMCO, an international shipping association. “There’s always that idea of shipping is the main form of transportation – 90 per cent of the goods in the world that are traded go into shipping. Eventually there will be a bounce. And eventually, a boom. You gentlemen that register ships, don’t worry. There are more ships and more ships coming.” 


Ships, oil, Panama 

Indeed, one of the problems the shipping industry is facing is that there are too many ships, said Basil Mavroleon, manager of the Projects Group of Charles R. Weber Company and managing director of WeberSeas (Hellas). The supply of ships continues to outpace demand, and there is a real possibility of glut resulting if too many people take advantage of the prevailing low prices on building new ships. 

“Right now discipline in ordering is one of the only things that will save this market. And discipline in ordering and ship owners do not go together,” Mr. Mavroleon said. 

While he was not optimistic that the shipping market would improve rapidly in the near future, Mr. Mavroleon mentioned some bright spots, including a US$226 billion stimulus programme launched by Japan, and continuing, albeit more moderate, growth in China. He noted that unpredictable events, such as war and famine, could influence the market temporarily even if the fundamental market remained static. 

Market analyst Gary Morgan gave an overview of anticipated supply of and demand for oil in the world, with the US producing more and more domestic crude via the ongoing shale oil and gas boom, China consuming more oil and demand dropping in Europe. The numbers of refineries are growing in China and India, as China attempts to keep up with domestic demand and India trying to increase its exports of refined product, said Mr. Morgan, who is director, analyst team, for Clarksons. 

Agreeing with Mr. Embiricos that the Panama Canal expansion is a “game changer”, Mr. Morgan said the project was designed with container ships in mind, but the expansion would positively impact all shipping, including gas, bulk and tankers. 



Nicholas Mitsos, chairman of the Eurafrasia Group, said his company has partnered with the China Development Bank to explore investments in infrastructure, energy and agricultural projects, including in the Caribbean. With China’s central government saying it will no longer guarantee China Development Bank debt, the bank will probably have to be more disciplined in how it invests money, he said. 

Mr. Mitsos said that roughly half of the Chinese population now lives in cities, and half lives in rural areas – the same proportions as the global population. With potentially one billion or more people set to move into cities during the next 20 to 30 years, requiring an estimated investment of some US$70 trillion, Mr. Mitsos said economic opportunities are in the so-called Asean+6 countries, an emerging free-trade coalition of 10 southeast Asian countries, plus China, Japan, South Korea, India, Australia and New Zealand. Together, that group of comprises half of the world’s population and two-thirds of global commodity trade, he said. 

Mr. Mitsos said China has made it a goal to target the Caribbean for investment, with some US$6 billion planned during the next few years. He said plausible reasons for why China cares to focus on a region that is relatively small may include geopolitical motives – i.e., an attempt to secure United Nations votes in favour of unifying China and Taiwan. 

China also may see Caribbean investments as solid commercial opportunities, he said. Additionally, Chinese officials may be partially motivated by “aesthetics”, Mr. Mitsos said, saying that given the choice, individuals might rather wish to spend time in, say, Cayman, rather than, say, Namibia. 

One potential area of opportunity for Chinese investment in the Caribbean is energy, Mr. Mitsos said. In Cayman, like most of the Caribbean, electricity is generated by burning diesel, and water is desalinated using electricity made by burning diesel. Meanwhile, China is a leader in alternative energy technology, including solar, smart grids and small liquefied natural gas. 

The Cayman Islands Shipping Summit 2013 was presented Monday by Mare Forum and OreCoal. 


Heavy equipment is seen loading a cargo ship in the harbour in George Town in Grand Cayman. – Photo: Jeff Brammer

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