Cyprus Minister confident shipping will recover from crisis

Minister of Communications and Works Minister Nicos Nicolaides expressed confidence on Monday that “shipping will recover from the current crisis,” noting that “the intensity of the shipping crisis is beyond any traditional periodicity and appears to have surprised even the most experienced.”
“Shipping is by far the most efficient form of transportation and inevitably, when the demand for goods and raw materials recovers, shipping will flourish again. The questions left to be answered are when and to what extent,” Nicolaides said in a speech at the Maritime Cyprus 2009 conferenc on Monday.
The minister noted that due to the financial crisis which led to a global economic downturn, “the demand for transport of goods and raw materials has dropped, as an immediate reflection of the slump of the consumer spending in Europe and North America, and consequently the freight rates fell below or close to breakeven levels for most classes of ships.”
An important issue that puzzles all of us is whether the shipping crisis will have any negative impact on quality and safety,” he pointed out, adding that “when the markets are down, it is a good time to focus on quality, safety and efficiency.”
Nicolaides said “phases of substantial boom followed by sharp declines are typical for the shipping industry, which is expected to see both bankruptcies and more consolidation, driven as much by massive over-supply as weak demand,” and expressed confidence that “the shipping industry will find its way out of the crisis and be able to stand on its own feet again.”
Referring to Cyprus, he said “the crisis does not seem to have had, so far, any significant repercussions on the level of shipping activity,” noting however that “without the downturn, the Cyprus registry would have expanded more, especially in view of the improvement of the quality standards of the fleet and the establishment of a new image of the Cyprus flag.”
The minister referred to the benefits Cyprus has to offer, which make it “one of the most competitive shipping centres in the world,” adding that “the shipping crisis, besides its immense impact on the shipping markets, also creates opportunities for specialised services in the shipping industry, since ship owners and operators focus their efforts on finding ways to improve efficiency and to reduce costs.”
“Third-party ship management often proves for ship owners to be more cost effective than in-house management. It is well known that Cyprus is one of the leading ship management centres in the world. It is estimated that about 20% of the world third party management fleet is managed from Cyprus. It is our belief that Cyprus has every potential to attract a significant proportion of the expected increase in the world-wide rendering of ship management services. In this respect, the current shipping crisis creates a new area of opportunities for the Cyprus ship management industry to expand its business,” he added.
He noted that “the experience and know-how on ship management, which Cyprus has gained over the years, enabled Cyprus to play a decisive role in the adoption by the European Commission of a new Communication providing guidance on state aid to Ship management companies (2009/C 132/06).”
“Our aim is to use our European orientation not as a stumbling block but as an additional advantage, by exploiting whatever incentives the EU has made available for shipping,” he added.
Concluding his speech, Nicolaides referred to the 20th anniversary of the Cyprus Shipping Chamber, and presented a commemorative plaque to the Cyprus Shipping Chamber Chairman Eugene Adami “as a token of appreciation for their excellent cooperation and their contribution to the development of Cyprus shipping.”