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Appendix 1

The dimensions of a cluster

The horizontal dimension consists of firms with similar capabilities that undertake

similar activities while the vertical dimension is composed by firms with dissimilar but

complementary capabilities that carry out complementary activities (Richardson 1972).

Firms at the horizontal dimension are mainly competitors and rivals while at the

vertical dimension firms are often collaborators and partners.

Horizontal dimension: Firms have different strengths, insights and attitudes Marshall

(1890), and their different valuation and interpretation of information leads to different

and dissimilar beliefs about the approaches and solutions of the same issues ( Casson

1982, von Hayek 1937). Due to the different attributes of firms it would be difficult to

replicate the actions of another player. By being co-located any different action or

approach is observed and can be compared by everybody. By watching and comparing

the different approaches an interactive learning process takes place that improves their

skills, makes even complex information understandable and increases their possibility

of survival. These competing visions promote the evolution of the cluster and the

economy as a whole.

An important note for the horizontal dimension is that when agents in a cluster share a

common culture, language, norms or organizational practices the process of learning

from each other is easier but now trust is not a prerequisite for learning. The learning

activity can occur even without close interaction between firms. While at the vertical

dimension the need for interaction between parts (customers-suppliers) is required

there is no such need between rival firms (Allen 1983). So the only requirements for

learning to take place to such clusters are the co-location and the observability of other

agents’ actions and no interaction between agents is essential. A relevant issue is the

existence of close and cognitive proximity between agents that we will refer to later on

Vertical dimension: ‘The vertical dimension of the cluster consists of firms linked

through input-output relations’ (Rosenberg 1972). Once a cluster is established,

specialized suppliers (in our case APS providers) and customers (maritime companies)

are attracted by the opportunities available. Another way for the vertical dimension to

be developed is by the concentration of some agents to a particular process where they

believe they have some advantage or special capabilities different than the other

players. Our focus will be on the first approach. When firms with differentiated

knowledge co-locate the bridging of the knowledge differences is easier, the problems

of asymmetric information is overcame and coordination of activities is easier to be

achieved. This can also lead to further specialization of the cluster as knowledge from

different fields and sectors is ‘mixed’ that creates new forms of knowledge. This vertical

differentiation can lead to the creation of new economic activities, extension of the

internal market and new knowledge creation (Maskell 2001). However, the decrease in

the possible alternative perspectives and evaluation of information can decrease the

offsets of knowledge creation and even lead to lock-in effects of the cluster. Only a

steady increase in the number of firms can create knowledge simultaneously by

variation and that is why the increase and growth of the cluster is very essential for its

survival.

Appendix 2

Competition inside the cluster: Porter’s Diamond

The concept of clusters from its nature is a paradox since it overemphasizes the

advantages of co-location near other firms of the same sector or more directly near

competitors. Porter (1990) argued that local competition encourages innovation by

forcing firms to innovate or fail and that the competitive pressure enhances

productivity. At economic literature the perspective of Marshall (1925), Arrow (1962)

and Romer (1986) or MAR-perspective stands to the opposite side by claiming that a

local monopoly is better for growth because it allows the externalities to be fully

appropriated by the innovator. Finally there is a third approach by Jacobs (1969) that

emphasized to the importance of diversity and variety inside the cluster since the most

important knowledge transfers originate from outside the cluster, a theory that we

referred previously in our research. In our case, the two maritime clusters of Piraeus

and London have the characteristics of specialized industrial locations that is a concept

that was perceived at the end of 19th century by A. Marshall 1890, that examined ‘the

concentration of specialized industries in particular localities’ by creating a triangular of

external economies and more specifically the availability of skilled labor, the growth of

supporting trades and the specialization in different stages and branches of production.

A further evolution of this framework was presented by Porter 1990 with its famous

‘competitive diamond’ where he examined the national competitive advantage and

international competitiveness. He argued that the success of a nation’s firms is

dependent on four sets of conditions: the firm’s strategy, structure and rivalry, factor

input conditions, demand conditions and related and supporting industries. ‘The more

developed and intense the interactions between these four set of factors, the greater

will be the productivity of the firms concerned’. Moreover, he argued that the intensity

of interaction within the ‘competitive diamond’ is enhanced if the firms involved are

geographically located or clustered. In other words, the competitive diamond is a

group of interlinked industries and associated activities. It is the nature of the

Diamond’s concept that produces the co-location of competitive firms that can be even

rivals that consequently intensifies the interactions between the different factors.

However, Porter’s concept has a generic character and is deliberately vague so that it

can include and explain relations among different industries and specializations. In our

case nevertheless this vague character is a disadvantage since our focus of interest is

on very specialized industries that would require a more restricted and defined

framework. To step to that direction is to include also the regional influence on a

nation’s competitive advantage as an additional dimension to the Diamond as

mentioned by Rugman&D’Cruz (1992). However, the analysis cannot be restricted to

the national level (Rugman &Verbeke 2001), but for national competitive advantage to

occur external connections of industries should be taken into account. We created

based on these observations an enhanced framework of ‘Porter’s Diamond’ presented

below:

Fig.1 Modified determinants of competitive advantage inspired by (Porter 1990)

Demand conditions

Suppliers and related industries

External relations

Government

Factor conditions

Strategy, structure and rivalry

Appendix 3

The role of firm size

At this research identifying evidence on the importance of firm size of the maritime

company and its choice of APS providers could not be found. However, some clues

about the function of the maritime industry where identified. Small maritime firms in

most cases do not choose their own APS providers (for example law firms) but for

example when an incident occurs they contact their P&I Club and it is the Club that

chooses according to the specific circumstances (area of the incident, cost etc) the

most suitable APS provider for the case. On the other hand, larger maritime companies

have internally Legal& Insurance Departments that deal with most issues related to the

firm, again however with close co-operation with their P&I Club. Another relation

identified concerns the relation of local P&I Clubs with local or smaller maritime

companies. Since local Clubs have lower pools that are difficult to cover the liability

limits of large maritime companies they target more at smaller maritime companies.

However, no clues were found about what will be the choice of the maritime company,

as to whether it will choose the local Club or not.

‘As mentioned when small firms have an incident they just turn to their P&I Club which

contacts the insurance company and taking into account the special characteristics of

the case, the cost etc they decide which law firm to choose to represent them. Larger

shipping companies on the other hand have internally a Legal Dpt that when a case

occurs they contact directly whom they think it will serve their interests better.’

(Interview 04/05/09).

‘Shipping companies must have a minimum type of insurance up to 1 Billion$ due to

international regulations. This limit is applied to vessels operating to deep sea trade

where for coastal shipping the limit is much lower. We can say that local P&I clubs have

also added value to the system and that local insurance covers local firms’ (Interview

23/04/09).

Finally firm size plays important role for the decision of the company to open a branch

abroad. Smaller firms appeared reluctant to open a branch at London due to the risk

involved to that decision due to the high level of competition from larger, more well-

connected, British firms but also due to the high costs of starting a new establishment

at such an expensive location like London. However, most maritime experts recognized

that firm size is not the most significant factor of success when they are at their local

market but other issues like how well connected to the local network they are and also

from their level of professionalization. Using a phrase of a maritime specialist that sums

up the above: ‘if you cannot be big, learn how to be small’ (Interview 04/05/09). More

insights are provided below:

‘It is hard for a foreign firm of our size to find clients and survive at the London market.

Even though our firm in terms of size is average for Greek market standards at London

we would be insignificant. Moreover London is very expensive and we cannot suffer 3-4

years of losses just to be profitable after that. The only way to do it is through personal

contact and relation with their customers and by offering the same level of quality with

their competitors. We should take into account that firms like ours have relations with

their customers for more than 10 years, which means that they know and we know

them. They will not just change lawyer because a new, large, foreign firm appeared or if

another firm offers them a lower rate for a case. Trust is more important and trust is

earned’ (Interview 09/05/09).

‘For a ship-owner the most important is the completion of the job but also that the job

will be done correctly. So it’s a question if the locals are trustworthy and capable to

undertake difficult cases. So the level of service is one aspect of the answer and of

course the cost of such services. Everything leads to the level of professionalization and

that is where smaller law firms should focus their efforts’ (Interview 04/05/09)

Appendix Table 3

FIRM NAME TYPE OF SERVICES FOUNDATION DATEOFFICES IN LONDON NUMBER OF EMPLOYEES-SIZE

Aigaion Insurance Co SA INSURANCE 1996 NO 35% OF GR. MARKET SHAREApostolakis Law,Constantinos L LAW / / /Associated Marine Adjusters LAW-ADJUSTERS 1989 YES /Associated Piraeus Law Offices *Athanasios AP Valsamis LAW / / /Athanassiou & Partners, V LAW / NO /Athanassopoulos Law Offices LAW / / /Avrameas & Ptns Law Offices, P LAW 1965 NO /Baltazanis, N C & Assoc LAW / MANAGEMENT COMPANY OF LONDON CLUBBilbrough & Co - Greece P&I CLUB / YES /Budd - Greece P&I CLUB / YES /

Charles Taylor & Co Ltd P&I CLUB / YES /Clyde & Co - Greece LAW/CONSULTANCY / YES /D Goulielmos & Partners LAW / NO /Daniolos Issaias-Athens LAW 2006 no /Deucalion Rediadis & Sons LAW / BRITTANIA'S EXCLUSIVE CORRESPONDENTSDeverakis Law Office LAW 1986 NODimakis Law Office LAW 1964 NOE A Vourvachis Law Office LAW / / /Economou & Economou LAW 1975 NOEmm J Stephanakis & Associates LAW / / /Ethniki Hellenic Gnl Ins INSURANCE / / /Francis & Arnold (Hellas) ADJUSTERS / YES /Franlaw Panama Inc LAW / NO /G & N L Daniolos - Piraeus LAW MERGED/NOW Daniolos Issaias & Partners Law Firm (D&I). G E Bairactaris & Partners LAW / / /Georgopoulos & Georgopoul LAW / / /Geronymakis & Ptns Law Office LAW / / /Golden Destiny Inc -Marine Ins SHIPBROKERS 1994 NO /Goulielmos & Partners LAW / NO /Goyios, N - A Nassikas LAW / NO /Hill Taylor Dickinson- Piraeus LAW / YES /Holman Fenwick - Greece LAW / YES

John Howell & CoLAW/NOW The International Law Partnership LLP YES

Hull Mutual Association non profit Marine Insurance Association NOI Savramis & Partners LAW / /Ince & Co - Greece LAW 1993 YESInteramerican INSURANCE / NO /Joseph Tan Jude Benny - Greece LAW / NO /Karelas Law Office LAW / / /Karydakis & Partners LAW 1986 NOKelemenis & Co LAW/CONSULTANCY / NO /Lallis Voutsinos Anagnos LAW / / /Latsoudis Arvaniti Law Office LAW 1926 NOManolis Eglezos Law Offices LAW 1997 NO

Minimar Shipping Co LtdINSURANCE BROKERS 1980 NO

Muenchener Hellas - Greece

REINSURANCE SERVICES / NO /

Neris & Bonoris LAW 1969 / /North of England P&I P&I CLUB / YES /Norton Rose Greece - LAW 1990 YES /

AthensPagoropoulos, John LAW / / /Pavlakis & Partners - Piraeus LAW 1932 NOPegasus Services Ltd ADJUSTERS / / /Pologiorgis Babalis LAW / / /Quantum Marineworks Ltd MARINE SERVICES / / /Reed Smith - Greece LAW / YESRichards Hogg Lindley - Greece ADJUSTERS /

LIVERPOOL-GLASQOW /

Rokas & Partners - Piraeus LAW/CONSULTANCY / NO /Roussos & Hatzidimitriou LAW / NO /Sarantitis Law Firm - Piraeus LAW 1965 NOSavopoulos, George LAW / / /Schelde Marine Svcs Hellas SPARES / / /Scorinis Law Offices LAW 1969 NO /Shipowners Claims Bur (Hellas) P&I CLUB / YES /Sioufas, Theo V - Greece LAW 1971 NOSKULD - Piraeus P&I CLUB / NOSotiropoulos, P K / / / /Stephenson Harwood Consultants SHIP FINANCE/LAW / YES /Stylianou & Stylianou LAW / / /Swedish Club - Greece P&I CLUB 1980 NOTheologidis & Lascaratos LAW/CONSULTANCY / NO /Thomas Cooper - Athens LAW / YES /Thomas Miller (Hellas) Ltd P&I CLUB / YES /Timagenis, Gr J LAW 1977 NOTopmar Shipping Corp SA SHIPBROKERS /1967 NO /V & P Law Firm - Piraeus LAW/CONSULTANCY / NO /Vardikos & Vardikos LAW / NOVerveniotis, George LAW 1970 NOVlassis N Macris & Associates LAW / / /Waterson Hicks - Piraeus LAW YES /Watson Farley & Williams LLP LAW / YES 8+5B Athens BranchWest of England (Hellas) P&I CLUB / YES /Yiannis Papazacharia - Greece LAW 1988 NO 11, associates at UK

* No legal services are provided by the Society itself. Such services are offered by the individual law offices - members of the Society.

Appendix Table 4

Column1 type of services foundation date offices in Londonnumber of employees

Access Maritime Corp shipbrokers-chartering 1984 no /ACA Shipping maritime-chartering / no /Aegean Marine Petroleum SA bunkering / / /Afpeli Maritime Inc shipbrokers / / /Albatros Management Inc Broker - Chartering / / /Alexander C Mougios / shipbroker? / / /Alkmare Shipping Agencies Ltd maritime-chartering / no /Alliance Chartering Inc shipbroker-chartering / no /Allied Shipbroking Inc shipbroker-chartering 1988 no /Almay Shipping & Finance SA shipbrokers / no /Amyntas Chartering SA shipbroker / / /Anro Marine Enterprises SA / / / /Athenian Shipbrokers SA shipbrokers 1997 / 15-50Avin International SA maritime 1977 yes /Azure Maritime Inc shipbrokers / / /Balkanfracht Niko Kollaros shipbrokers / / /Belnav Inc-now aquavita int charterers 2006 no 11Billmar Chartering Co Ltd shipbrokers / / /Brave Maritime Corp Inc maritime company 1987 / /Bulk & Oil Chartering SA shipbroker-chartering / / /Bulkers Shipbroking Co Ltd shipbroker-chartering / / /Bulknav Shipping Ltd / / / /Callitsis Successors SA agents-chartering / no 21Carriers Chartering Corp SA shipbrokers / no /Chester Shipping Ltd UK maritime company / no /Chris Marine SA shipbrokers 1987 no** 8

Christoship Charter & Ship CoIntermediaries/chartering / / /

Christou Associates SA training services 1982 no /Continental Chartering Co Ltd shipbrokers / no /Cosmos Shipping Co SA shipbrokers/ chartering 1975 no 6Daifas Marine Enterprises SA shipping company / no /Dalex Shipping Co SA shipping company / no /Dalnave Navigation Inc Libera shipbrokers / no /

Danad Shipping Co Ltdshipping company/chartering / no /

Diamond Shipbroking Ltd shipbrokers/ chartering / no-Chile /Diamond Shipbroking Glyfada shipbrokers/ chartering / no /Dileship Marine Corp exporter / no /DLP Maritime SA shipbrokers/chartering / no /

Doil Steamship Co Ltd shipbrokers / no /DP Iliou Shipbroking & Trading shipbrokers / no /

E Erhardt y Cia SA

Freight Transportation Arrangement/shipbrokers/charters / no /

Eastmed Yachting Partners yacht charterers 1998 no /Econ Shipping Co brokers/representatives / no /

Efnav Co Ltdshipping company/chartering / no /

Elefsis Shipping Agency shipbrokers/chartering 2002 no /Eleftheroudis General Shipping shipbrokers / no /European Co-Operation SA shipbrokers / no /Flocas Shipping Ltd shipbrokers / no /Florcas Shipping Agency Ltd shipbrokers / no /Frangoulis Shipmanagement Ltd

shipping company/chartering / no /

G Georgopoulos Maritimeshipping company/chartering / no /

Galaxy Maritime Enterprises SA charterers / no /Georgantzos Shipbrokers shipbrokers / no /George Moundreas & Co SA shipbrokers 1975 no 28

Gigilinis Salvage & Towage

anchor handling/tuging/chartering 1960 no 100

Grecomar Shipping Agency Ltd shipping company / no /Grecomaritime Chartering Ltd chartering / no /Hellastir Shipping Enterprises shipbrokers / no /IMS SA / / / /Inglessis & Co, Nikos shipbrokers / no /Interchart Shipping Inc shipbrokers/chartering / no /Intermodal Shipbrokers Co shipbrokers 1988 no-China /International Shipbrokers Inc shipbrokers 1989 no /International Shipping&Trading / / / /

Iolcos Hellenic Maritime Entp shipping company/S&P 1982 no30 off-shore/160 seafarers

Ionian Shpg & Chartering Ltd / / / /John N Pissis shipbrokers / / /John Psarras S&P chartering/shipbrokers / / /Kallianis Compania Naviera SA

shipping company/chartering / / /

Link Maritime Enterprises SA shipbrokers / / /

Maersk Broker Hellasshipbrokers/charterers/s&p 2009-re-established yes-main company /

Marachart Shipping Co Ltd shipping company / no /Marbrokers SA shipbrokers 1974 no /

Marine Contractors Incsalvage contractors/shipbrokers / no /

Marine Spirit SAshipping company/chartering 1992 no 5

Marteam Shipping Co shipping brokers / Athens/Thes/niki /

Master Maritime Intl Co SAs&p brokers/ship registers / no /

Masters Shipping Co SA shipbrokers 1965 no 6Mediterranean Maritime shipping company / no /Medstone SA shipbrokers / no /Melka Chartering Svcs Ltd shipbrokers/chartering / no /Mercantile Merit Shpg Co shipping company / no /Millennium Oil Ltd bunkerers / no /Minamar Chartering Ltd shipbrokers / no /Mourla Mare SA ship charterer / no /Mutual Maritime Services SA / / / /N Cotzias (Shipping) Co shipbrokers 1893 no /N G Moundreas Shipping Co SA shipbrokers / no /Navatrade SA shipbrokers 1988 no /Navigational Satellites Chart satellite chart providers / no /Network Chartering SA s&p brokers / no /Ocean Energy (Hellas) Ltd bunkerers / no /Oceanbulk Shipping & Trading

shipping company/chartering / no /

Oceancrest Chartering SA shipbrokers 2003 no 6Optima Shipbrokers Ltd shipbrokers 1981 Shangai/Dubai 60

Oromaris Incmanagement/s&p/chartering 2005 no /

Overseas Agency Ltd shipbrokers/s&p 1969 no /OW Bunker (Malta) Ltd bunkering 1992 no 10P K Kakoulidis Shipping Co shipbrokers / no /Plessot Trading SA shipbrokers / no /Posidonia Shipping & Trading / / / /Primal Marine Shipbrokers shipbrokers / no /Prime Maritime Inc shipbrokers / / /Rangos N Shipping & Trading Co

shipping company/charter/broker / no-Thessaloniki /

Roussos Mngt & Chtg SA, S shipbroker / no /S&C Besi Ltd shipping company / no-Thessaloniki /

Samos Steamship Coshipping company/chartering 1875 no /

Scandinavian Shpg Ltd various services / no /Sea Master Ship & Trading Ltd shipbrokers/chartering / no /Sea Pride Maritime & Trading / / / /Seabound Maritime Inc shipbrokers 1993 no /Seaknight Navigation Inc shipbrokers / no /Sealink Marine Inc / / / /Seatrade Chartering Inc shipbrokers / no /

Seawind Shipping Svcs towages/s&p/chartering 1992 no /

Shipowners Trust Intl Corpshipbrokers/chartering/s&p/ex-imp 1997 no /

Solemare Shipping Co SA communication/it 1973 no /

Stealth Maritime Corp SAshipping company/chartering 1999 no /

Stewart & Hazell Marine Svc insurance surveying/s&p 1982 yes /Tradmar Group chartering 1978 no-around Greece /Tramp Maritime Inc shipbrokers / no /Transocean Shipping Co SA chartering / no /Velikar Enterprises Ltd exporter / no /

Venieris Maritime SAhandling/auxiliary services / no /

Venture Shipbroking SAshipping company/shipbrokers / no /

Vergos Marine Management SA shipbrokers / no /Vestalco Ltd/Agency bunkering/chartering 1988 no /Widesea Chartering Co Ltd shipbrokers / no /TurkEllas Shipping Agencies SA chartering/shipbrokers / no /Tween Shipping Inc shipbrokers / no /Unit Maritime Inc / / / /Vega Star Maritime SA shipbrokers / no /

Tsakos Groupshipping company/chartering/s&p 1974 yes /

Appendix Table 5

Maritime companies in

SOURCE: Charlaftis (1996)

Interview 1

Maritime companies in

Operate:

-their own ships

-ships of other interests

Represent:

Maritime firms

In Greece

-Ship Finance

(From their own capital)

-Crews

Provide:

-Ship Finance.

From their own capital or from British funds for an interest rate.

-S&P, for commission

-Chartering, for commission

-Insurance, for commission

POST&CO P&I CLUB Diederick Post, Managing Director23/04/2009

1 Can you briefly mention your current function and professional background?

I am the managing director of the club and l deal with everything inside the firm. I have studied law and business at the Erasmus Universiteit Rotterdam as well as shipping consultancy.

2 How many employees do you have at this moment and how long this firm is in the business?

The firm was created at 1941 and at our headquarters in Rotterdam we have approximately 30 employees.

3 Do you maintain offices at other locations also and what is the role of each office in this corporate-cooperative network and how does coordination and interaction between offices occur?

We also have offices at Antwerp-Belgium and Seoul-South Korea. Shipping business is generated in clusters and the most important markets are Japan, Greece, Scandinavian countries, Hong-Kong and London. By maintaining offices in these locations we can reach easier these markets. The coordination between these offices is done through the intranet of the firm, telephone , internet and of course personal contact as with everyone l have a personal relation.

4 What is the reason of maintaining offices at these particular locations?

Geographical market coverage? yes Fiscal reasons?- Proximity to clients/ ships? yes Proximity to seaports? yes Proximity to advanced services (banking, reinsurance, accounting, law)?yes

The most important reason is the facilitation of service provision. The relationship with customers is very important. Seoul for example is one of the larger open shipping markets in the world. Even though its service producers market is not significant however the port activities and shipbuilding is very advanced and that is the reason for our location there. However, it was my father’s decision for r our location there due to the personal contacts he had at Seoul that facilitated this decision.

5 Do you use global correspondents and how your business relationships being arranged?

We act as correspondents of five major P&I Clubs but we also have our own pool. The relationships are usually arranged by frequent meetings, travels conferences etc. It is really important for also a major conference that is held in Amsterdam at September (27th) where more than 700 correspondents participate.

6 Is there a particular strong position of your P&I Club with regards to a region, vessel type or commodity shipping (e.g. container, tanker, dry bulk, Ro-Ro)?

Not really, we deal with everything. We service singletons, Time Charterers, small, medium or major Chartering fleets and all of this involves a great variety of Charter Contracts, such as Slot Charters, Space Charters and Container Pooling Agreements. Likewise there is personal attention for the Commodity Trader employing vessels as Charterer and/or Cargo Owner to carry their cargoes, and many, many others.

7 What shipping companies in terms of size do you represent? Do you represent also large/smaller firms?

For shipping companies the average size is one ship-one owner. However, as mentioned we represent everything from large firms like P&O Lloyds to small coastal firms.

8 What criteria do you use in order for a company to be a member in your Club? Fleet age, histories of company are taken into account?

The most important criterion is its capability to pay the premiums. Then the quality of firm’s management is very important, its training capabilities-how skilled and in the business are its employees. Fleet age is not very important; we pay more attention to the condition of the vessels, how well are they maintained. For example at brown-water shipping we have vessels almost 100 years old.

9 There is a fear by smaller firms represented by large Clubs that their voice is not heard. To what extent do you agree with this statement and this reason can lead them to choose smaller, local P&I Clubs?

Mutual insurance is the key word here. International Group members need a premium reassurance that quaranties that they can cover possible claims. Shipping companies must have a minimum type of insurance up to 1 Billion$ due to international regulations. This limit is applied to vessels operating to deep sea trade where for coastal shipping the limit is much lower. We can say that local P&I clubs have also added value to the system and that local insurance covers local firms.

10 What are the business relationships between the P&I club and the brokers, surveyors, financial service providers and maritime law firms? Does the location of Rotterdam helps to the creation of these relations?

Rotterdam is easily located, just 1 hour from Hamburg and London, the biggest port in Europe and many shipping companies, advanced producers have their headquarters here. In general the networking is facilitating the creation of these creations.

11 From your point of view, what is the relation between Rotterdam-London network? Is it a competitive or complementary relationship?

Both, we cannot just say. It depends from the type of activities. There is strong competition and in order to overcome it, businesses can be done outside the network to avoid the gossips.

12 What explains London’s leading position regarding advanced services in the international shipping sector? Who are London’s main competitors?

Historically, institutionally, cluster effects, labor or foreign tax regulations?

History for sure is of great importance. Then its market structure, insurance regulation and also the availability of insurance. Then small shipping circle-cluster effects, the existence of large organizations-institutionally- ( Lloyds, BIMCO). I dont think tax regulations of great importance. Main competitors are first Singapore, Nordic countries-Sweden and then New York.

13 Do you represent any Greek firms? Are Greek businesses important to your firm/ can you identify any connections between R-P networks?

We do represent Greek offices of P&I clubs and also some Greek shipping companies. Moreover we use two Greek shipping companies as our representatives. ‘Greek businesses’ are just a part of our business we do not really have a focus on that kind of business. The reason for this is that these businesses are hard and time consuming. Greek ship-owners demand to ‘give them your business’, deals considered closed are renegotiated etc. they run their business at a very personal way and demand the same interest from us also. Bottom line is that ‘you can make money easier elsewhere’. As for the Rotterdam-Piraeus network l can hardly identify any connections-excluding the port traffic- since l can only think of only two Dutch advanced producers that have an office at Piraeus.

14 have you considered opening a branch at the Piraeus port? What benefits could you obtain from been located there and what obstacles can you identify?

No, not really. Only if a big opportunity shows up. The most important benefit from a potential location at Piraeus, can be the proximity with the local ship-owners. The local network is the most important asset. Piraeus is a difficult market, with fierce competition since many players are involved. In order to be successive you must invest heavily to people that know the market, something that cost a lot of money.

15 Commodities transferred through Piraeus port are increased over the years. Is this an important factor that may lead to an increase in the presence of APS producers? Does Piraeus hold a strong position for APS Services among other East Mediterrean ports?

I do not think that this is an important factor. Just comparing the commodities transferred at Rotterdam and Piraeus we realise the difference. The strong point of Piraeus is the financial market and especially the buying and selling of vessels. We cannot identify a leading port at this region for these services. It really depends on the business we are interested in. Depending on the business the importance varies, Dubai, Israeli ports are also important.

16 Recently the first Greek P&I Club was created. How can a small, local P&I Club compete branches of larger more internationalized Clubs?

The advantage of small, local P&I Clubs are their knowledge and connection to the network. No quality of service, neither reductions on premiums, nor focus on specific market or tonnage can provide them with a competitive advantage to compete larger, internationalized clubs.

17 From your experience what is the relationship (competitive-complementary) between Piraeus-London network and if you can identify any common characteristics with the Rotterdam-London network?

The links between London-Piraeus are very strong as there are many English firms that maintain branches and the other way around. The strongest feature of London is its strong financial basis and at Piraeus also ‘it’s the money again’. That connection can characterize that network. If we had to identify the strongest characteristics we would say that the network relations and financial knowledge characterize Piraeus while at Rotterdam even though it is not a financial center, the fact that it is a base for business as well as the high quality of business done here and especially the handling of claims, the insurance sector and finally the shipping knowledge accumulated at Rotterdam characterize its strong characteristics.

Interview 2

AKD Prinsen Van Wijmen

Mr Taco van der Valk04/05/2009


I am a lawyer and l obtained my master of laws degree at Leiden University in 1989. L also spent 1 year at the UK to learn more on English Law at maritime affairs. In 1990 l started my professional career at Nauta Dutilh, and in October 2001 l joined AKD Prinsen Van Wijmen, where my work can be characterised as a combination of knowledge management and regular practice. I still undertake cases but for me the intellectual challenge is better and so l contact information reports,training etc.


The firm has approximately 280 lawyers but at the shipping department there are 32 lawyers.


We also have offices at Amsterdam, Breda, Eindhoven and Brussels but the shipping business is only done here at Rotterdam. There is a Central Board where the presidency changes to every region regularly. We can say that the structure of the firm is a matrix, every branch is divided to sectors of practice(maritime law, labor law etc) and for every sector of practice there is a central command that again is controlled by the Central Board.


Geographical market coverage? yes Fiscal reasons? No Proximity to clients/ ships? yes Proximity to seaports? yes Proximity to advanced services (banking, reinsurance, accounting, law)?yes

The most important reason for us is to be at the center of business which is at Rotterdam.

5 Do you use global correspondents and how your business relationships being arranged? At your site you mention the phrase ‘Best Friends’. What are your criteria you use to choose other representative firms?

We use other firms according to where the case takes place but there is no real arrangement, no official deal and no visits required with our representatives. We do not share cases with other firms just cooperate with them at some cases. Having an exclusive ‘best friend’ it is not good due to the nature of our business since there is a

probability for our firm and the representative to be rivals at some other cases or claims. Regarding the criteria we use to choose representatives, the only criterion is the quality of their work. We either use some database (Law500) to find a suitable law firm to do the job or of course by using our personal relationships.

6 Is there a particular strong position of your P&I Club with regards to a region, vessel type or commodity shipping (e.g. container, tanker, dry bulk, Ro-Ro)?

Not really, we deal with everything.

7 What shipping companies in terms of size do you represent? Do you represent also large/smaller firms?

We have many heavy lift Dutch companies (Fairstar), some ice landing companies and generally we have companies from every part of the industry that use Dutch Law to settle their differences. In general we represent larger firms. Small firms when there is an incident they just talk to their P&I Club and that then the Club with the cooperation of the insurance company finds the appropriate law firm to represent the shipping firm. But in general yes, we also have some smaller shipping companies.

8 There is a fear by smaller firms represented by larger law firms that their voice is not heard. To what extent do you agree with this statement and this reason can lead them to choose smaller, local law fims?

It is difficult to answer. As mentioned when small firms have an incident they just turn to their P&I Club which contacts the insurance company and taking into account the special characteristics of the case, the cost etc they decide which law firm to choose to represent them. Larger shipping companies on the other hand have internally a Legal Dpt that when a case occurs they contact directly whom they think it will serve their interests better. It is hard to find causality between the statements that smaller shipping companies choose smaller law firms.

9 What are the business relationships between maritime law firms and the brokers, surveyors, financial service providers and P&I clubs? Does the location of Rotterdam helps to the creation of these relations?

Well the larger insurance (P&I Club) offices are based or have offices in London. Rotterdam is a center of maritime activity on its own but it is also close to London. Perhaps ‘dangerously close’.

10 From your point of view, what is the relation between Rotterdam-London network? Is it a competitive or complementary relationship?

We can say that it’s a love and hate relationship. It is good to work with them, most of the cases come from them but there is a rivalry because we try to keep our own market for ourselves. Firms at Rotterdam are equally good with UK firms and the total service level here is really good. I think that perhaps firms here should just try to be real professionals. Going to London evolves enormous fees and in general the costs at

London are enormous. Having this cost advantage and if Dutch firms be real professional then we should not have to fear a lot the competition of UK firms.



History for sure is of great importance. The money is there, insurance is there. Brits are real sovinists and they pass cases to their own firms. The role of Lloyd’s is also important and of course the cluster effects since you can have more contacts and more knowledge in some aspects is accumulated there. From a lawyers point I do not think tax regulations of great importance. Language is also important since maritime law is based on English law and most cases are applied to that. Moreover the role of solicitors is very important. Solicitors act as intermediates, they have a clear view of what the clients want and that has commercial importance and value. In general the better service provided at London can explain its leading position.

12 Do you represent any Greek firms? Are Greek businesses important to your firm/ can you identify any connections between R-P networks?

No, not really. We had some litigation cases in the past and that’s all.

13 have you considered opening a branch at the Piraeus port? What benefits could you obtain from been located there and what obstacles can you identify?

No, it is not important for us. Piraeus is a financial center and British lawyers are based there for that reason. They take advantage of the financial background, hire Greek lawyers for some cases and that’s all.

14 Commodities transferred through Piraeus port are increased over the years. Is this an important factor that may lead to an increase in the presence of APS producers? Does Piraeus hold a strong position for AP Services among other East Mediterrean ports?

Perhaps, If they have their headquarters at Piraeus. For law firms advantages occur when we have our people at one location not by opening branches globally. The reason to go international is to take advantage of financial services and that is applied to other producers (insurance). At Piraeus there is a core of such financial services (banks, insurance) and that is its strength.

15 At Piraeus there is a vast number of law firms. How can a small, local firm compete branches of larger, more internationalized law firms?

Many Greek lawyers were educated and have worked at London and so they have an idea how UK law firms work. They are very conservative and monitor how UK firms operate. I can also say that in general they are really good at what they do. However at the litigation part there is a terrible problem with Greek courts (great delays) that push many cases to be examined in London. Financially London is very important but costs and fees are very high and that gives a cost advantage to other locations like Piraeus. However the right question may be ‘why a regular ship-owner would not use the local

producers-lawyers? ‘For a ship-owner the most important is the completion of the job but also that the job will be done correctly. So it’s a question if the locals are trustworthy and capable to undertake difficult cases. So the level of service is one aspect of the answer and of course the cost of such services. Everything leads to the level of professionalization and that is where smaller law firms should focus their efforts.

16 From your experience what is the relationship (competitive-complementary) between Piraeus-London network and if you can identify any common characteristics with the Rotterdam-London network?

For me the relation between the two networks is very different. Brits influence on Piraeus is higher than on Rotterdam. As l said before Piraeus is a financial center and so does London and that’s the reason of the strong connection. No shipping finance involved -> no reason to go global. Greeks should work more to professionalize their business. Here at Rotterdam by using the ‘best friend’ relation we can provide the service they (ship-owners) need and so there is no reason for us to open a branch somewhere else. ‘As Chinese use to say ‘if you cannot be big learn how to be small’.

Interview 3

Mr. Fasolis IoannisAttorney of Law09/05/09


I graduated the law school of Athens (Honors Degree) and then l had my master at LLM university of London. l am practicing law privately since 1984 and I am a lawyer of the Shipping Legal Department of ‘National bank of Greece s.a.’ from 1986 to 2008. I was the Head of the Shipping legal Department from 1997 to 2008. With two other lawyers (partners) we also have a Law firm the last 13 years. We decided however not to form a company but rather keep our individual names for personal reasons even though the formation of a company would have many benefits, mostly tax related.


We are now at our firm 9 lawyers, 3 of us partners and as we said before, we started working together 13 years ago.


We do not have another office except this one at Piraeus where we deal mostly (90%)

with shipping.


Geographical market coverage? Yes Fiscal reasons? No Proximity to clients/ ships? Yes Proximity to seaports? No Proximity to advanced services (banking, reinsurance, accounting, law)? Yes

The most important reason for having our office at Piraeus is to be close to our clients and other services. Historically the maritime center was here and that is the reason why we could not be located anywhere else. For our business, been close to the port is not really important and that is the reason why many maritime law firms have offices at the suburbs of Athens and not only at Piraeus port. However, the most important reason is to be close to other services especially banks (with a focus at shipping) that are our main clients but also insurance and accountants.


Correspondents are really important to our work and we have many of them around the globe for example Panama, Malta etc. Our relationship is been arranged with frequent contact mostly by telephones even when we do not have a common case, just to maintain the bond. Moreover, l have to point out that we started working with these people either because they were recommended to us by other people (clients, other lawyers) that we worked before or through personal or other relation with one of our lawyers. We try not to have business with people we do not know or never heard before. We also have a good collaboration with a broker located also here at Piraeus that gives us many cases and maintaining that bond is very important to us since through him we have an opening to difficult, close markets like yachting and other profitable cases.

Regarding now the case of London, we have a long-lasting relationship with a big British maritime law firm (almost 10 years) where we can get all the important information and knowledge about the London market and vice versa for them, we provide them information about the Greek market. That is one reason we do not have an office at London but all the business is done through our collaboration. We give them cases that involve the British Law and in exchange they hand in to us their cases that are subject to Greek Law.

6 Is there a particular strong position of your firm with regards to a region, vessel type or commodity shipping (e.g. container, tanker, dry bulk, Ro-Ro)?

Our firm has mostly cases of purchasing and selling of vessels of any size and category. More specifically the greatest part of our work is about the legal part of the financial transaction of vessels trade and that is why it is important to us to be close to banks. We do not have any cargo claims and the reason is that the British Law is involved in such claims and the arbitration and litigation part is done in London. There are of course some cases where a Greek bank finances such cargo transactions but still it is not our focus or an important part of our business.

7 What shipping companies in terms of size do you represent? Is ‘Greek Businesses’ important to your firm or you also represent other clients also in order to diversify your business?

Most of our shipping companies that we represent have 1-10 vessels. We have to realize that firms of that size are mostly family businesses and far away from the common belief of rich and cosmopolitan ship-owners. The reason for our focus at these firms is simple: a larger shipping company with more than 10 vessels has the economic background to have internally a Legal Department that can deal with every possible case that may come up. For them is cheaper and easier to control to 3-4 lawyers rather paying and occupying a third party for their cases. Greek business has the largest share in our firm since 90% of our clients are Greeks but we also have some foreign customers as well.

8 Does your firm has an internet site and if not what other means do you use in order to advertise your services or find correspondents?

We do not have an internet site even though friends and customers ‘push’ us to that direction. With most our clients we have a personal relation or we are recommended by someone we both know. You have a different treatment when you know someone directly or not and when you are absolute strangers. This treatment however is not about the price you charge but how you treat and give personal interest to every case. We do not need a site to find customers because a customer that finds you through a site in order to pick you, you must be cheaper from all the others he has checked- we do not expect that he will not search for other firms as well- and we are not willing to evolve to a price competition. Moreover, we try to do business with people that we know of or we can learn about them from someone we know and trust.

9 There is a fear by smaller firms represented by large maritime law firms that their voice is not heard. To what extent do you agree with this statement and this reason can lead them to choose smaller, local law firms?

I cannot see the relation. Most of law firms charge by the rate and they do not make any discounts or special treatment easily. However when a large foreign law firm collaborates with more than one law firms at another location it is easy to assume that she will handle more cases to the foreign firm that gives her back more cases than the other. That is the only direct connection to firm size l can identify.

10 What are the business relationships between maritime law firms and the brokers, surveyors, financial service providers and Clubs? Does the location of Piraeus helps to the creation of these relations?

Of course, when Greek state gave motivation to shipping and foreign companies to have their offices here through tax and labor legislation all these services started gathering here. Being located near other producers like banks and customers-shipping companies- gives you a great advantage since personal relation is very important in our business. You are known here by everybody by your name. Being located elsewhere or being new without friends makes it really hard for you to be successful.



All these reasons can explain the leading position of London at the shipping industry. London market is established over the years as the leader and this cannot be easily changed. All charters, clauses, contracts are based on British Law. We can also say that London and British Law in general by being ‘neutral’ promote and facilitate international relationships. Everybody in the business around the world are familiar with British Law so when for example a Greek and a Chinese want to do business it is safer and easier to go by British Law rather than enforcing another law that one party may not know. Regarding now the tax and labor regulations, these are important for Greeks that maintain offices in London since as we have seen in the past but also quite recently when the British government tried to tax foreign citizens (like Greek ship-owners, lawyers etc) that led to the fled of Greek firms back to Piraeus. However for ‘London-Greeks’ that are 2d or 3d generation Greeks there taxation did not affect them because UK is there home now. Being located in Piraeus when you are a foreign firm is tax free so foreign firms do not have such issues here at Piraeus.

12 To your opinion what is the relationship between the London- Piraeus network( complementary- competitive) regarding APS producers? –education at UK…, invasion at Greek market, Greeks taking advantage of London’s importance…

The relation between the London- Piraeus network is directly competitive but in favor of the British. In our struggle so far we are losing and by accepting that fact we act complementary to the businesses they do not or cannot do. Foreign Law firms come here not with the law of 89/67 but based on the EU regulation that allowed EU firms to open branches to the soil of other state- members and treated as equals to the local firms. I think that started 8-10 years ago. When large British law firms come here they expanded also to other cases not only shipping related but always to the best and the most profitable parts of the business. At the beginning they had a large proportion of British lawyers at their working force but later they recruited Greeks either working

here at other law firms or others that worked at London and wanted to return to Greece. Nowadays most of these firms have Greek lawyers working at their Piraeus branch.

The fact that most of Greek lawyers had studies or worked at UK did not helped them resist the ‘invasion’ just gave them complementary qualifications for their work and nothing else.

13 Have you considered opening a branch at London? What benefits could you obtain from been located there and what obstacles can you identify?

No. except from the collaboration with the large British law firm we have that substitutes a possible location there, they are other reasons as well. It is hard for a foreign firm of our size to find clients and survive at the London market. Even though our firm in terms of size is average for Greek market standards at London we would be insignificant. Moreover London is very expensive and we cannot suffer 3-4 years of losses just to be profitable after that.

14 What are the strengths and weaknesses of Piraeus as a service center and what can be done to improve its position?

The strength of Piraeus is the large number of Greek and foreign banks that are located here which makes it an important financial center and the location of other services and ship-owners. The network is the most important asset of Piraeus. I cannot see what else can be done to improve its position. The state did the most it could by providing a favorable tax and labor regulation and by being next to the shipping community. Now it is all up to the private initiative. If the different parts (ship-owners, brokers) do not agree and do not act according to their common interest, nothing more can be done. For example the Greek state created the legislative framework for the creation of a Greek P&I Club recently but the only Club that was created failed to attract sufficient or important members and didn’t made any difference to the market. If 10 ship-owners cannot agree on anything but just look their personal, short-term benefit any other attempt will also be condemned to fail.

15 Commodities transferred through Piraeus port are increased over the years. Is this an important factor that may lead to an increase in the presence of APS producers?

We do not handle any cargo claims so it is indifferent to us. In general for Greek law firms cargo claims are not an important part of their business and neither Greek courts have many cases. Most of them go to British courts.

16 At Piraeus there is vast number of small local maritime law firms. How can a small, local law firm compete branches of larger more internationalized Firms?

The only way to do it is through personal contact and relation with their customers and by offering the same level of quality with their competitors. We should take into account that firms like ours have relations with their customers for more than 10 years, which means that they know and we know them. They will not just change lawyer because a new, large, foreign firm appeared or if another firm offers them a lower rate for a case. Trust is more important and trust is earned.

17 From your experience can you identify any common characteristics between the Piraeus-London network and the Rotterdam-London network?

No, I cannot. British firms didn’t go to Rotterdam but instead they came to Piraeus, this shows something. Perhaps because the port activities and commodities transferred are really significant in Rotterdam they have more cargo claims. That can attract British firms to be located there but the distance between the two locations is not that big and l don’t know if they would bother to do something like that.

Interview 4

Mr. Dimitrios VasilakosManaging Director of Maritime ActivitiesNational Bank of Greece S.A.13/05/09


I am Manager of Shipping Finance Division. Background focusing gradually from commercial banking towards corporate and finally shipping finance.


Total of 45 employees app. at the Maritime Affairs Dpt, dealing with business, credit and operations. The firm has been active in shipping for the last 50 years approximately.


Booking office in London also offering operations facilities.


Geographical market coverage?

Fiscal reasons? Proximity to clients/ ships? Proximity to seaports? Proximity to advanced services (banking, reinsurance, accounting, law)?

Mainly we are located there for historical reasons and the continuation of support to a handful of esteemed clients.


Being focused in Greek shipping I do not think this questions applies.


We are a leading Greek bank and a top-10 intl one in Greek shipping. Our portfolio to a large extend reflects Greek shipping exposure, with a majority of bulk (dry and wet), limited exposure to containers and a historic exposure to coastal shipping (ro-pax).


Greek shipping is our only market. We have both very large and small companies, their key characteristic being long term and successful commitment to shipping.


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Technology makes proximity a less important factor in business. Although physical proximity facilitates informal contact, it is no more a critical element in most combinations of contacts (at least the ones involving a bank). Location in Piraeus is largely due to historical reasons. Some years ago it was very important for shipping firms to be located at Piraeus port since it was easier to find crews for their ships. Nowadays job can be done from the suburbs also. That may explain why the service sector that follows the location of shipping companies is scattered around Athens and Piraeus.



Cluster effects are certainly behind it, although –as mentioned above- technology weakens such effects. Re Greek shipping, Athens and its suburbs is –for obvious reasons- the main competitor. One has to take into consideration that oftentimes personal reasons dictate or at least heavily influence business decisions. Of course networking is very important but it can be substituted from technology, journeys etc. For the shipping firms the cost of operation is more important. Taxation is very important to Greeks. Whenever the Greek state tried to impose taxes to Greek ship-owners they left from Piraeus and moved their business to London or New York, it happened at the mid 1950’s. The same thing happened when the British government tried to increase the taxation to foreign citizens. At this case it what the time of Piraeus to benefit. We cannot tell which location can be the successor of London’s. It doesn’t matter where location will be and we do not know what is going to happen.

12 To your opinion what is the relationship between the London- Piraeus network (complementary- competitive) regarding APS producers?

Given that many providers have established presence at both ends, I would opt for complimentarity. Piraeus is far cheaper in terms of taxes, labor and fixed costs. If we examine the competitive relation between the two ends, at the mid-term we don’t know which end will prevail. They will choose the place that they can live better, cheaper and find cheaper and better labor force. At London some important principals have their location there and cannot leave. The same stands for brokers, since their market is there, for insurers’ also-there is a long established structure there, history and the money-that makes London irreplaceable for their business. However, the maritime insurance is only a small part-around 2%- of the insurance market in London so it is not really a crucial matter. Law firms may leave because they can do business from everywhere.


Presence in London exists for more than a century. Shipping-wise, extent of presence largely depends on significant percentage of clients considering it as a key element of service provision (which is not, currently, the fact as most of our clients are happy to be covered by our Piraeus office).


Truly big issue… Assuming that by “Piraeus” you mean indeed Piraeus and not other locations around Athens, the answer to what can it be done is –in my view- is “not much”. Increasingly large shipping firms cannot find –to begin with- offices large enough to house their operations. Also, there is truly not particular reason why a firm would find being in Piraeus a key element of its day-to-day business. Weaknesses are mainly related to infrastructure (or, better, lack of it). The state should aim its efforts at these issues and not to involve at the core of the shipping industry. Whenever it did the result was catastrophic, stability of the existing regime is far more important for shipping industry.


Assuming it is service related, I would argue that this increase in commodities (if observable) is only influencing a very small percentage of the Greek shipping community since Greek maritime community is mainly internationally focused.

16 At Piraeus there is a vast number of small local maritime financial firms. How can a small, local financial institution compete branches of larger more internationalized Firms?

Shipping finance is a long term business. The key element therefore, as dramatically demonstrated by the latest financial crisis, is long-term presence and a strategic view of shipping. Size is undoubtedly important in order to cater for such a capital intensive industry. International background though, seems to be a drawback, as many institutions draw on their respective sovereign’s emergency funds and are –as a consequence- reluctant to direct such funds to an overseas activity not directly providing a reward for such investments.


Not qualified to answer.

Interview 5

Ioannis PsihogiosAttorney of Law, Legal Department

Eletson Corporation Ltd

14/05/09


I am attorney of Law and after my graduation l worked at two law firms before l start working at Eletson Corporation at the Law Department from 1999 since now. At the Law Department we are two lawyers and we handle every possible case that concerns the company.


The firm was founded at 1966 at is now employs over 110 people ashore and over 600 seafarers in its offices around the world and on its vessels.


No we do not have offices elsewhere but we do have many affiliates around the world.


Geographical market coverage? Fiscal reasons? Proximity to clients/ ships? Proximity to seaports? Proximity to advanced services (banking, reinsurance, accounting, law)?

All these reasons are equally important for choosing our affiliates but the most important is to collect crucial information about the market. The choice for having our headquarters here at Piraeus was of course a personal choice of the founder of the firm but we are a Greek maritime company, we have the Greek flag in all our vessels so Piraeus was the first-best choice.


Regarding the legal cases we have many lawyers around the globe who we cooperate and we directly contact them when an incident occurs. Our relationships is been arranged by phone, it is enough in our business. If we just call them and describe them the case they are able to understand and give a solution.


Eletson owns and operates a fleet of medium and long range product tankers. Our fleet has 25 double hull tankers and 2 LPG/NH3 carriers. All vessels sail under the Greek flag and are occupied around the world.


The legal department represents only the interests of the corporation and we try to keep and handle all the cases internally. We handle every possible case so we do not have a specialization but there are incidents that we gave to other law firms or ask for their opinion but we try to avoid it as possible.


Yes we do have an internet site but my personal opinion is that we do not use it to find customers. We don’t expect that customers (charterers) will search for us but instead we have to search for the best deals and that is the role and importance of the Chartering Department.


I don’t think that the size of the law firm is important. At least here at Piraeus everybody knows everybody so reputation is more important. If a firm does his work right then it will be preferred by more customers. Rates charged can be also important but l do not think that we can find significant fluctuations between law firms.


From the beginning of the 1970’s many service providers came to Piraeus and that facilitates the communication and interaction between the different parties. You can call or you can just meet the other easily even though as l said earlier in our business the task can be done by just calling the other, it is equally effective.



Historical reasons are very important. 200 years ago till now, London is the center of maritime world and that cannot be easily or suddenly change. The fact that all important organizations have their headquarters or offices is also important. London is the most important financial center-all the capital is there-and that is its stronger characteristic. Being the maritime center for so long inspires confidence to all players in the industry. Moreover, its justice system and arbitration has earned global respect and everybody, no matter from where he may be, accepts London to be the place where his case will be examined. So, common acceptance is another strong characteristic of London. It also posses’ valuable knowledge at many maritime aspects (for example insurance) that is hard to find concentrated to another part of the world. London’s tax regulations are important to Greeks but not in general. The leading position of London cannot be justified by special tax regulations, contrary to Piraeus for which the main reason for its development as a maritime center was a favorable tax regime. Every time there is a rumor that the British government is about to increase the taxation on foreign citizens, Greeks closed their offices there and came back to Piraeus, it happened at 1970’s, 10 years ago and it also happened recently.

As a main competitor l can identify Singapore, Piraeus is insignificant compared to London.

12 To your opinion what is the relationship between the London- Piraeus network( complementary- competitive) regarding APS producers?

It is both. Regarding the shipping companies it is certainly competitive but for the service sector it depends. It is competitive since all the important UK Law has now an office in Piraeus and managed to get a large share of the market but it is also complementary at the litigation part. For Greeks the most important reason for their location at London was to be close to other important players –ship-owners, bankers, insurers. They continue to be located there to maintain these bonds and relationships. Nowadays, these bonds can still be maintained by traveling there frequently or by phone since the cost of telecommunications is minimized, so the importance of being located at London is less important nowadays.


Having a branch in London is too costly and risky and especially if the operation part is done through that office due to the high taxation. A small office just to get all the necessary information and learn about the market is a better idea.


Piraeus is under no circumstances a financial or service center, it would like to be but it is not. Perhaps it didn’t become what it was expected to be. I think the main reason is that it failed to attract all Greeks ship-owners or at least the most important players. Many maritime companies came to benefit from the tax free regime and later many service providers followed to take advantage of the concentration of all these ship-owners. Focusing now at legal services, the problems with Greek justice are a serious obstacle in any attempt to increase the importance of Piraeus as a service center. First of all, in my opinion Greek justice it is not trustworthy, much too many delays occur during the examination of maritime cases and arbitration is undeveloped. Another reason is the urban area of Piraeus is undeveloped and downgrading, many crucial facilities are absent, there is lack of space for the accommodation of shipping companies or service providers and it is much too air-polluted. All these may look unimportant but they are not. If we observe what other countries did in their attempts to become shipping centers like Dubai, Singapore where they built new cities out of nothing or invested heavily in infrastructure and compare it with the situation here at Piraeus we can see the difference. That is the reason why many shipping companies and service providers have their offices at the north or south suburbs of Athens. They are still close to Piraeus and can benefit from the cluster effects, the job is still done efficiently and they can avoid all these problems. The best thing that the Greek state should do is not to involve at all. We saw the mess that the state interference created in coastal shipping, we do not need that also to international shipping.


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16 At Piraeus there is a vast number of small local maritime law firms. How can a small, local law firm compete branches of larger more internationalized Firms?

They can compete foreign firms when cases are examined with Greek Law since their knowledge is superior at this sector. However a large number of these firms can be described as primitive at today’s world map since they are very person-oriented. Usually the founder of the firm puts all family members at the firm -sons, daughters- but he is the one who still takes all decisions. It is hard to take seriously such firms; you cannot count them as partners. Networking effects are important only to some extent after that the quality of work is the most important element. Bottom line is that you got to perform, you are always been compared with someone else. Foreign law firms recruit the best lawyers and any comparison with these family firms is pointless.


I have no knowledge on the Rotterdam- London network.

Interview 6

Trantalidis GeorgiosAttorney of Law14/05/091 Can you briefly mention your current function and professional background?

I am Attorney of Law. After my graduation from the Law School of Athens l had my Master from UCL in London. I am practicing Law ever since.


it is an individual firm and l only have an assistant.


No.


Geographical market coverage? Fiscal reasons? Proximity to clients/ ships? Proximity to seaports? Proximity to advanced services (banking, reinsurance, accounting, law)?

/


I have a close cooperation with two other firms here in Piraeus and also a strong business relationship with a Law firm at UK. Except from the real difficulties of opening a branch at London (personal company), having this relation with a UK firm eliminates any possible benefits from such location since l can get all the information or cases from them directly.


I mostly undertake cases of Maritime Law relative to Labor issues like compensations to seamen from injuries etc.


I do not represent shipping companies, only seamen which are at their majority Greeks, so yes ‘Greek Business’ is the most important part of my work. There is no reason to diversify my business since l practice Greek Law and it is very difficult to find a foreigner that its case is examined at a Greek court.


Yes l do have an internet site but still most of the cases come from recommendations of other parts that l had dealt in the past or from my personal relations.


There is not an answer to that. It depends from the relation between the two parts. Respecting the demands of the clients is not related to size, a small law firm can be equal professional to a larger one.


Of course. Here at Piraeus all these parts are at close proximity which is a facilitating factor on building business relations. Technology can help a lot if there is not a close geographical proximity but still it cannot substitute the advantage of having the opportunity of meeting the other part at his office and having face to face conversation.



Historical reasons are the main reason for London’s leading position at APS services. In order to get to that level of experience and global acceptance they worked hard and responsively. All the other factors can only partly be an explanation for their leading position.


The relationship is also competitive and complementary. The competition between the two locations is obvious as they compete for the same market share. More specifically, firms from London came to Piraeus and gained a large share of the local market. But there is still a part of the market for local firms and that is the complementary relation, we can get something from them also.


Generally speaking since l have never thought of opening a branch at London, the greatest obstacles is the large cost of being located to London, the different language and of course the fierce competition there that makes it very hard for a new foreign firm to be successful at the market of London.


Greek firms are professionals and know and do their work very well and that can be proved from the loyalty that their customers show to them. Loyalty is strongly connected to personal relationships but business is business and if the task is not done properly then no personal relations can maintain a business collaboration. Many things can be done however regarding the quality of the provided services which are not yet equal to other multinational firms. There is also a matter of the regulatory framework that still needs many improvements, the bureaucracy and the many problems with Greek courts or more specifically the lack of many specialized to maritime Law courts and judges.


For an increase in the commodities transferred there must be as a prerequisite the existence of adequate infrastructure. In the case of Piraeus, first we had the creation of a favorable framework that attracted shipping companies and APS services that made Piraeus important in the maritime world. The increased port activities came later, so l do not think that this factor can attract more APS producers.

16 At Piraeus there is a vast number of small local maritime law firms. How can a small, local law firm compete branches of larger more internationalized Firms?

If there is not an important difference in the rates charged l cannot see how they can compete them.


No. I have no knowledge about Rotterdam and its relations.

Interview (by phone) 7

Mr VergottisManaging Director of London BranchValiant Shipping Ltd29/06/09


THE LONDON OFFICE HANDLES NEARLY ALL:

CHARTERING, SALE + PURCHASE, OPERATIONAL PURCHASING (SPARES/STORES/PROVISIONS ETC), INSURANCE, CLAIMS + P. & I. WORK, FOREX, ACCOUNTING + INTERNAL AUDIT FOR A SMALL DRY CARGO BULKCARRIER FLEET

ALL EXECUTIVE EMPLOYEES HAVE A STRONG SHIPPING BACKGROUND – EITHER COMMERCIAL OR TECHNICAL OR BOTH.

2 How many employees do you have at this moment and how long is your firm in the business?

TOTAL 6 IN LONDON – CURRENT STYLE INCORPORATED IN LONDON IN 19 AS SUCCESSOR TO PREVIOUS WHICH BEEN IN BUSINESS IN THE U.K. SINCE BEFORE WORLD WAR 2


IN PIRAEUS OFFICE (7) (SHIPMANAGERS: INCLUDING CREWING + TECHNICAL SUPERINTENDENTS)

CAPTAINS + CHIEF ENGINEERS AND SENIOR GREEK OFFICERS ON BOARD VESSELS (10) ARE EMPLOYED BY THE GREEK OFFICE.

CREW ON BOARD ARE EMPLOYED THROUGH A GREEK/PHILIPPINO AGENCY

INTERACTION BY REGULAR AND FREQUENT TELEPHONE + EMAIL AND FAX COMMUNICATION EVERY WORKING DAY. OCCASIONAL VISITS –FOR ISM /QUALITY CONTROL INTERNAL AUDITS ETC.


Geographical market coverage? YES, IN LONDON FOR CHARTERING PLUS SALE AND PURCHASE WORK

Fiscal reasons? HISTORICALLY YES

Proximity to clients/ ships? NO

Proximity to seaports? NO

Proximity to advanced services (banking, reinsurance, accounting, law)? YES, IN LONDON


YES, FOR ALL ASPECTS OF OPERATING THE SHIPS; ALTHOUGH CHARTERING SECTION STRONGLY SUPPORTS THE BROKERS ON THE LONDON MARKET/BALTIC SHIPPING EXCHANGE


SOLELY DRY BULK – FOR LAST 12 YEARS OR SO

GENERALLY NO PARTICULAR REGION – VESSELS TRADE WORLWIDE – BUT LAST 2-3 YEARS CONCENTRATED ON OPTIMAL TRADING PATTERNS WITHIN ATLANTIC BASIN – MAINLY GRAIN DERIVATIVES / ANIMAL FEEDSTUFFIN BULK BETWEEN LOAD ARGENTINA (RIVER PLATE) + LESS FREQUENTLY BRAZIL; AND DISCHARGE EUROPE : UK/ CONTINENT/MEDITERRANEAN – OCCASIONALLY SAME CARGO DIRECTION SOUTH AFRICA

7 When did the London branch started its activities and if you can identify what was its initial purpose?

1946 (UNDER A DIFFERENT NAME)

INITIAL PURPOSE/S CONTINUE/S SAME TO THIS DAY

8 What activities does the London branch undertake? Does it have a special purpose (for example financial or Operational) or it is a full operational branch? Do you employ also foreigners or only Greeks?

LONDON OFFICE: FINANCIAL AND OPERATIONAL ---

CHARTERING, SALE + PURCHASE, OPERATIONAL PURCHASING (SPARES/STORES/PROVISIONS ETC), INSURANCE, CLAIMS + P. & I. WORK, FOREX, ACCOUNTING + INTERNAL AUDIT FOR A SMALL DRY CARGO BULKCARRIER FLEET

50% GREEK 50% FOREIGNERS

9 Does the proximity with the headquarters of Advanced Producer Services that you cooperate provides you with additional benefits or you consider that these benefits cannot justify the existence of a branch at London?

THE PROXIMITY BRINGS ITS OWN ADVANTAGES, BUT THEY, ALONE, ARE NOT BE THE SOLE REASON TO JUSTIFY A LONDON OFFICE. A FEW APS PROVIDERS ARE CONTRACTED FROM ABROAD. EMAIL AND TELEPHONE CONTACT SUFFICE.

10 What explains London’s leading position regarding advanced services- historical/institutional reasons, cluster effects, labor or foreign tax regulations- in the international shipping sector? Can you identify who are London’s main competitors?

ALL THE ABOVE ARE IMPORTANT FOR CONTINUED PRESENCE IN LONDON.

ALSO PROXIMITY OF ANCILLIARY SERVICES : ALL INSURANCE, SHIPFINANCE, STRONG LEGAL SUPPORT, P. & I. CLUBS, SHIPPING DERIVATIVES TRADING AND PROVISION OF MARINE FINANCIAL INTRUMENTS, EXPERTISE IN MANAGEMENT OF RISK + ANALYSIS, ARBITRATION, (WHEN NECESSARY, BUT INFREQUENTLY!)

LONDON BY TIME ZONE IS EFFECTIVELY IN THE MIDDLE OF THE GLOBAL BUSINESS DAY.

LONDON REMAINS PRE-EMINENT FOR CHARTERING AND : S. & P. ; MOST COMPETITION FOR COMMERCIAL WORK (ESPECIALLY CHARTERING) COMES FROM OSLO, HAMBURG, PARIS (?NOT MUCH) , GENEVA, GENOA, PIRAEUS, DUBAI, BOMBAY, SINGAPORE, HONG KONG, BEIJING, TOKYO, NEW YORK


/

13 What benefits can a Greek shipping firm obtain from been located at London and what obstacles can encounter?

BENEFITS: PROFESSIONAL STAFF.HIGH PRODUCTIVITY. HIGH LEVEL OF COMMERCIAL INTEGRITY AND EXPERIENCE. HUGE GLOBAL AND DIVERSE MARINE INTELLIGENCE FOCUSED IN LONDON. THIS INFRASTRUCTURE IS ESTABLISHED IN THE SAME CITY.

OBSTACLES: COST / EXPENSE LONDON CONSIDERABLY HIGHER. TRAVEL FOR STAFF LONGER MORE TEDIOUS, MORE EXPENSIVE. HIGHER LEVELS OF TAXATION – PERSONAL (NON DOM, RESIDENTS!) AND CORPORATE. COST OF LIVING – DOMESTIC/RESIDENTIAL AND COMMERCIAL V.HIGH


STRONG IN LONDON, OFTEN BASED ON PERSONAL BASIS. OFTEN ESTABLISHED OVER MANY YEARS.

PIRAEUS HAS DESERVEDLY SEEN A GROWTH IN THE NETWORK OF SUCH PROFESIONAL DISCIPLINES IN RECENT YEARS, BECAUSE OF BETTER COMMUNICATIONS, PLUS E.U. STANDARDISATION, REGULATION AND SUPPORT; PLUS A DRIFT AWAY FROM LONDON BY THE GREEK OWNING COMMUNITY (OUT OF LONDON + N.Y. – TO CHEAPER SHORE BASED ACTIVITIES – OFTEN ‘BACK’ IN GREECE.)

15What are the strengths and weaknesses of Piraeus as a service center and what can be done to improve its position?

ALREADY PARTLY DISCUSSED.

– STRENGTHS:

CHEAPER – STAFF + RENT. SMALLER CITY - SHORTER JOURNEY TIMES BETWEEN OFFICE/HOME

16 do you think that commodities transferred through a port is an important factor that may lead to an increase in the presence of APS producers?

NO

17 At Piraeus there is a vast number of small local Producer Services providers(law firms, brokers). How can a small, local firm compete branches of larger more internationalized Firms?

PROVIDE MORE PERSONAL/FAMILIAL, CLOSE SERVICE TO CLIENT. MORE FREQUENT CONTACT/TRUST CAN LEAD TO PATRONAGE. THIS CAN PASS FROM GENERATION TO GENERATION


NOT STRONG ONES. THERE ARE A FEW OWNERS/CHARTERERS AND BROKING OFFICES IN ROTTERDAM, BUT IT IS NOT CONSIDERED A MAJOR CENTER/COMPETITOR TO LONDON.ROTTERDAM IS BEST KNOWN AS A PORT.

Appendix 1 - Erasmus University Thesis Repository G... · Web viewWell the larger insurance (P&I...

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