Most of us live close to water and see the water as recreation. In reality on the seas is a great deal of economy particularly the boats that move around. The closest most of us will get on a ship is either taking a ferry or going on a cruise ship and that is fine. However, if are by the sea, you will likely see ocean tankers moving goods particularly commodities around the world. Shipping is an inexpensive method to move goods from one country to another. The stronger the economy between the two countries, the greater the economies the supply chain relies on to lower costs will happen. Within the shipping world, accidents do happen, or ships are lost and most of the time most of us never know. However, there are industries that have developed which handle those concerns. The shipping world and how it handled an accident is the subject of a book called Dead in the Water published by Mathew Campbelll and Kit Chellel, published by Portfolio/Penguin, 2022, London UK.

The relationship between London’s insurance markets and the Greek shipping community is complicated. Greece is undeniably the most successful shipping nation on earth, and a vital source for the specialists at Lloyd’s.

The Greek commercial fleet is the world’s largest and mostly operated by small, family-owned firms. The city of Piraeus is the center of Greek’s shipping industry and roughly 18% of the worldwide fleet is Greek owned, next largest is Japan at 11% with the US at 3%.

After WW II, the Greek shipping industry was devasted with more than 70% of the commercial fleet sunk. The Greeks acquired the Liberty ships from the Allied war effort and established a strong position in tramp shipping. Running vessels with no fixed schedules, willing to transport whatever cargo they could find.

After WW II, the world loved owning and driving cars and 60% of the growth in maritime trade was based on liquid cargo. Moving larger quantities of oil over longer distances required an increase in tanker capacity or the rise of supertanker. Two Greek families were at the forefront of the expansion – Stavros Niarchos and Aristotle Onassis.

As their wealth grew so did their political influence and they devised the idea when transporting oil, it is better to put their ships and their money beyond the reach of the countries where they lived and did business. Thus, the rise and of tax havens such as Bermuda, Liberia and others. By 1959, over half the Liberian merchant fleet was owned by Greeks. Advantage – all the profits, little of the accountability.

One of the great institutions of London is their court houses where judges settle some of the biggest big-money disputes. The London court houses are where information about the disputes becomes public because the judges have credibility and experience dealing with these types of cases.

In the book, the ship happens to be owned by Greeks, because a British citizen was killed, the British police were involved and through many years of court proceedings the case showed the fire was deliberate and the insurance companies did not pay out the claims, but lawyers fees were up.

Linking to dividend paying stocks, all industries have books written about them, most are in written in connection with another subject because the readers must sell books. Industries evolve and become a certain way because they were allowed to go that way. It is expected in the shipping industry to use tax havens and every country with ships do it. Perhaps the global supply system benefits more than it would cost for ship owners to pay higher income taxes. When you invest in a company, your are often investing in the system which exists and that can benefit you as an investor.

There are more questions than answers, till the next time – to raising questions.