Paddy Rodgers, ceo of tanker giant Euronav, took the podium at this year’s London International Shipping Week (LISW) to stress that smaller shipowners face being squeezed out of the industry.
“Size matters more than ever … because one of the most important things we face is access to capital,” Rodgers said. He said size also helped in gaining access to information and enjoying economies of scale.
“The old model of shipping has not changed since the days of Noah,” Rodgers said. “Small, family run – this model is essentially over.”
Rodgers said following the global financial crisis the traditional owner’s typical access to bank capital has been squeezed. Banks accounted for 83% of all ship finance in 2008, a figure that had dropped to 62% last year.
“We need to have size and we need to have liquidity,” Rodgers said, explain that via his company’s listings at two exchanges he was able to draw on $20m in liquidity a day.
Rodgers said that Euronav would need to continue to get bigger. Size helped get better access to information. Going forward, he reckoned: “Data is going to change everything.”
In concluding, Rodgers said: “It is a commodity net back business – if we overtonnage, we shoot ourselves in the foot.”