Shipping in Cyprus is saving the day

Posted on 14 Jan 2014, by Esme Palas

Amid the ongoing economic crisis and the financial difficulties our small Island is facing, one could say that the most stabilising factor of the Cyprus economy is the maritime sector. The Cyprus flag ranks as the 11th largest flag internationally and the third in the EU, right after Greece and Malta. Undoubtedly, shipping remains one of the main economic pillars of Cyprus with an annual revenue of over one billion Euro and a contribution of approximately 7% to our gross domestic product. The fiscal and economic advantages in the shipping industry have all contributed to this growth.

The above was the main message the President of the Republic of Cyprus, Mr. Nicos Anastasiades gave, while addressing the opening ceremony of the biennial Maritime Cyprus Conference that took place in Limassol in October 2013. He referred to the importance the country attributes to the competitive shipping sector, which has become even more important as it is called to face challenges resulting from the unprecedented worldwide economic crisis. He mentioned that, even though a number of shipping companies on the island were affected by the Eurogroup 's decision for Cyprus, nevertheless the resident shipping industry did not leave, demonstrating its confidence in the shipping industry and economy.

As the President emphasised in his speech, around 150 very well-known ship owning and ship management companies and 2200 Cyprus registered vessels employ 55,000 staff on board and 4500 people on shore, thus creating new employment opportunities for young graduates in newly established maritime specialities. During this opening address Mr. Anastasiades pledged his government’s continuing support to the shipping community. He said that in recognition of the huge importance of the shipping industry for the Cyprus economy and the society at large his government considers providing political support to the shipping industry as one of its top priorities. As proof of his commitment he said that with the creation of a number of positions of under-secretaries to the president, shipping would be one of the most important under-secretary positions to be created.

The President emphasized that during negotiations with Troika, Cyprus kept its very competitive EU approved taxation system intact and during Troika's visit in July 2013 Cyprus shipping industry was not only positively assessed, but also actively encouraged to further expand abroad. He stated that this validates the fact that shipping remains “a very productive and healthy segment of the Cyprus economy, with solid potential for further expansion.” The discovery of hydrocarbons in the waters of the Republic, the President mentioned, will undoubtedly enhance the prospects of Cyprus shipping.

With regards to the restrictions issued by Turkey in 1997, extending prohibitions against ships under a foreign flag of any nationality, sailing to Turkish ports directly from any Cypriot port under the effective control of the Republic of Cyprus or against ships of any nationality, related to the Republic of Cyprus in terms of ownership or ship management, the President made an appeal to the Secretary General of the IMO Mr. Koji Sekimizu and the representative of the European Commission responsible for Maritime Transport Mr. Siim Kallas. The President also appealed to them “to exert their influence and leverage on Turkey so as to urgently lift the illegal restriction, which in turn affects regional and international shipping and the concept of free competition.”

The Maritime Cyprus Conference was organised for the thirteenth time since 1989, by the government in cooperation with the Cyprus Shipping Chamber, the Cyprus Union of Ship Owners, the Ministry of Communications and Works and the Department of Merchant Shipping. It has grown into one of the world’s most significant international shipping conferences. Its status now gives it a prominent position in the calendar of many shipping executives in the industry, including owners, managers, and delegates from other shipping organisations. Presenters, distinguished speakers and panellists from the highest levels of all sectors of the shipping industry participated in the conference reflecting the prestigious nature and importance given to this event.

The main theme of the conference was “Shipping Today.” It focused on crucial matters concerning the international shipping industry today. It was a great success as it was attended by more than 600 shipping personalities form around the world. Mr. Alecos Michaelides, Permanent Secretary of the Ministry of Communications and Works also addressed the conference. He expressed his confidence that conference will give further impetus to the Cyprus shipping industry and will promote Cyprus internationally. He also said that the shipping sector has overcome the initial shock of the bailout and that despite the 1987 Turkish ban on Greek-Cypriot air and sea traffic the Ministry is doing its best to promote the Cypriot flag.

Addresses by distinguished personalities such as the Secretary General of the International Maritime Organisation, Mr. Koji Sekimizu followed and that of the vice president of the European Commission, Mr Siim Kallas, via recorded message. Both Mr. Sekimizu and Mr. Kallas expressed interesting views on the conference themes referring to the leading role that Cyprus shipping plays on an international level as well as within the European Union. As they emphasized, the fact that the International Maritime Organisation has had a longstanding presence at the Maritime Cyprus conference constitutes recognition of the participation of Cyprus in forming international and EU shipping policy.

The conference tackled hot issues in the shipping industry in three distinct parts, namely remodelling shipping, environment and shipping: a turning point and looking ahead to the future. The first day focused on the theme of remodelling shipping where a discussion took place on the need for adaptation. Speakers expressed various views on whether there is a need to adapt the regulatory framework and policies at an international level in order to meet the challenges arising from the continuously evolving shipping industry.

Then, a discussion took place on financing ships under the current economic scene. Then, a discussion followed on the various difficulties the industry is facing today in obtaining ship finance due to the reluctance of lenders, which is caused by the unprecedentedly difficult situation worldwide. In their conclusion, the panellists expressed the view that in the near future shipping and the freight market will improve as it is anticipated that banks will have renewed appetite for shipping once more, thereby making funding available for owners with a solid track record.

On the second day, the focal matter was on the theme environment and shipping: a turning point. The speakers addressed the question whether we are at a turning point for shipping, in relation to both existing fleets and new eco ship design and shipbuilding. After an active debate that followed on this issue the majority of the panellists expressed the view that shipping is not at a turning point and that the changes currently taking place in the shipping industry constitute a natural evolution of the industry.

During the second session on the future of propulsion fuels, the expert panellists discussed the future of alternative fuels such as liquefied natural gas, biofuels, methanol and other distillates and explored ways on how these alternative fuels can be used efficiently, indicating that the shipping industry needs to invest in the infrastructure required for the facilitation of the use of alternative fuels. On the final day the theme was looking ahead to the future and was divided into two parts.

The first session examined the human element in shipping and the anticipation of new challenges. During this discussion panellists stressed how important it is to invest in the human factor since it is proven that good seafaring competence can guarantee safe and profitable operations. They stressed that this goal can be achieved through communicating the multiple opportunities for recruitment, the attractive salaries as well as caring for the appropriate and innovative employment and living conditions.

The second session inquired into the trends in shipping. This session concluded with a positive note that, in the future, shipping and the market will improve for almost all types of freight, with the exception of crude oil, the trade of which is expected to improve in a slower pace. As far as the financing of shipping is concerned, it is anticipated that there will be opportunities available for credible ship-owners through new financing systems.

The presence of leading personalities of the international shipping industry, which the informative and challenging sessions of the conference attracted, demonstrate that maritime in Cyprus has been firmly established as an internationally renowned conference. As the president of the Republic mentioned in his speech “it is an apt manifestation of the international reputation and position Cyprus enjoys as an international shipping centre.” The respect Cyprus has from the international and European community is extremely important if one takes into account the current economic situation of our own country and the government’s effort to attract foreign investments, tackle unemployment, modernise Cyprus economy and lead the country back to growth and prosperity.

Undoubtedly, the success of the 13th Maritime Cyprus Conference 2013 reinforces the leading role shipping plays on an international level and together with the government’s commitment to support the shipping industry in Cyprus leaves an optimistic message that despite the current economic climate shipping in Cyprus will save the day.