Drawing on his skills as an investment banker, and long experience in the sale and purchase of vessels, Peter Georgiopoulos has founded and managed the General Maritime Corporation with remarkable success. In this exclusive interview with DNV Forum he reveals how his different approach to shipping has made him and the investors a fortune in the quality tanker market.
Georgiopoulos knew what attracted venture capital, and he knew how investors look at shipping as an industry like any other. Most importantly, he knew how to turn the investments into returns by running a quality-conscious company with an efficiency to be envied. GMC was quoted on the New York Stock Exchange in June 2001.
Built from scratch
We had a different beginning, says Georgiopoulos. This company is built from scratch. Its todays business for todays needs. We have hand-picked a small staff who are among the best in the world. They fill the positions they really want to fill. This means that we have a lean team where every manager runs his own group and has full responsibility for what he does. It frees up my time to come up with new and fresh ideas and solutions, propose strategies and use the experience and skills that I have, the way the others use theirs.
I dont fight agents and worry about the things my managers are good at. I know companies running the same number of tankers as I do with a staff of 400 people. Lets just say that half a dozen people to take decisions is better. Not many companies in the shipping industry are in the fortunate position of being able to run their business in this way.
Shipping is a business, not a lifestyle
Tradition is good in some cases, but in business you have to be very careful about taking decisions based on traditional feelings and obligations. Some companies are so afraid of change that they would rather die slowly than take the necessary steps to adapt to new situations and circumstances, says Georgiopoulos.
Many are in shipping for all the wrong reasons. The world has changed faster than many traditional shipping families have been able to cope with. The idea of running a shipping business just because you are the oldest son or because someone expects you to is very old-fashioned, but still very prevalent. Finding the right managers outside the family is often a much better solution.
Focus on the investment
Instead of drawing on heritage and family fortunes, Georgiopoulos prefers to think of shipping as any other industry: that way one can avoid being blinded by tradition. Having to ensure return on investment to external parties adds a sharper focus to the company, he believes.
Georgiopoulos was born in the US, and prefers to conduct his business there.The US is the land of opportunities. Good ideas and hard work pay off. On the practical side, I was born here, my father is a shipping lawyer here in New York and I have all my contacts here. Being American is beneficial since most of the oil majors are US-based. Also, the cluster of financial investors in New York provides a business-focused environment. I am in the fortunate position of also having close ties to the Greek communities, which adds another dimension.
Size is a major factor in dealing with the oil companies. It is difficult to maintain the quality levels that are necessary to satisfy the vetting requirements enforced by the international oil majors if you only have two or three vessels. This drive for quality is already leading to consolidation in order to have owners and operators with the strength to fulfill the requirements on the operational side, as well as being able to renew the tanker fleet.
I am glad there is such a drive for quality at all levels. Improvements are both necessary and beneficial for the reputation of this industry.
DNV is certainly the right partner in this drive for quality. Its responsiveness and professional partnership complement our need to do more on the quality side than just comply with the requirements. And the personal relationship also gives us a lot more in terms of market news, information on upcoming legislation and new requirements. The DNV people have a broader vision of what is happening in the market.
Georgiopoulos believes such market information is vital. One thing is certain the good times are behind us for the foreseeable future. Profit margins have to come from efficient operations. Just owning tankers is no longer synonymous with profits.