Owners are better ‘managing their own ships’ in these tough times


Generating third party management business in the current economic climate may not be as easy as many managers believe following an assertion by two of Greece’s leading ship owners that the pressure of the current situation is exactly why owners should manage their own ships.

In an exclusive interview in the January/February  issue of SMI, Harry Vafias, CEO of StealthGas and Ion Varouxakis of FreeSeas disagreed with the view that third party managers will win more business as owners look to cut costs.

“That is not true. We inherit their costs. They want to charge us their running costs, then they charge us a management fee and then they want to charge something on top because they want to make a profit. When you manage your own ships in-house and you are dedicated to it, running costs are definitely lower than if you have your ships managed outside,” said Harry Vafias.

Ion Varouxakis agreed: “The current environment is the best example of why ship owners should manage their own ships, because they can react very quickly to a changing business environment. We have all undertaken a rigorous cost cutting exercise and it is much easier to do that when you manage your own ships. As far as we are concerned, we have also taken a very proactive approach; we have implemented a series of strategies to reduce crew wages which we will start in January and we are taking this very seriously. It is a complex strategy but each case is different.”

Mr Varouxakis added: “It is not just about lowering costs: owners can adapt to a changing business environment. When you manage your ships you can immediately implement a new strategy and that is a big advantage. So when the markets improve you can invest in your ships and when the market drops you can stop.”