Banker, broker, owner, investor, manager – George Gourdomichalis’s far ranging 33-year career in shipping has earned him the right to call out the markets as he sees them.
On the same panel as Goldenport’s John Dragnis at March’s Ship2Ocean Shipping Finance conference held in Athens, Gourdomichalis picked up on some of the points made by his compatriot shipowner on how to play the markets during periods of high inflation.
Gourdomichalis, the CEO of Blue Wall Shipping and managing director of Phoenix Shipping & Trading, told delegates: “We are living in an inflationary world and that’s good for shipping.”
According to Gourdomichalis, as of the mid-March timing of the conference, bulk carriers are still cheap for their earnings, containerships look expensive and tankers are more expensive than what they should be given their earnings, but he admitted they have upside.
Shipping is one of those beautiful businesses where you can divest and invest at the same time
Born in London and educated in Greece and the US, Gourdomichalis started out working for a bank in New York, before becoming a shipbroker and then a shipowner on his return to Greece in the 1990s, where he went on to get FreeSeas listed on the NASDAQ before pursuing new shipowning and investment opportunities.
“Shipping is one of those beautiful businesses where you can divest and invest at the same time,” he told the conference.
“I’m fairly positive across the board for this year and next year,” Gourdomichalis said, admitting the unfortunate events of the past couple of years – whether it be the pandemic or the war in Ukraine – are providing a “backbone” to the business of shipping.
In terms of investing in shipping, Gourdomichalis said by all means take money off the table where possible, but he advised caution about how to reinvest this money.
“Reinvesting today in newbuildings has a big question mark that has to do with the upcoming regulations and on the idea that you when you invest in your newbuilding you should have a 20- or 25-year cycle ahead of you,” Gourdomichalis said, going on to predict: “That’s why I think that the 20- to 25-year cycle is is is not a reality these days, but there’s definitely a 15-year cycle for ships.”
The issue of the declining lifetime of ships has been much discussed of late. Oil companies do not officially charter tankers older than 15-years-old. Likewise, most banks and financiers want to ensure that any financing does not extend beyond the 15th anniversary of the vessel, past the third special survey and dry dock. Financing is generally limited to seven to 10 years with the leasing houses who are now responsible for the lion’s share of financing in the maritime world.
Vessels delivering today are unlikely to have the full benefit of a full design life of 25 years when the industry still does not know many variables for future designs, such as a future fuel let alone the possible competitive benefits brought about by technology and automation.
“Let’s see what the future holds there,” Gourdomichalis mused.
This profile first appeared in the latsest issue of Maritime CEO magazine. Splash readers can access the full magazine for free by clicking here.