"I WOULD NOT NECESSARILY LABEL THE RO-PAX NEWBUILDING MARKET AS A DEAD ONE"

Name: Ettore Morace

Position: Managing Director – Malta Shipbrokers International Ltd

Age: 58

Zodiac sign: Gemini

Civil status and family: Married with two children

Place of birth: Naples, Italy

Could you briefly introduce yourself and tell us about your career path?

I have been involved in the shipping industry since I was a child. My grandfather was a successful and renowned maritime lawyer and my father is currently a shipowner. I have always held managerial roles in the brokerage business (Unitramp and Malta Shipbrokers), shipyards (Rodriquez, Intermarine and Conam) and shipping (Alisur, SNAV, Alimar, Ustica Lines, Tirrenia, Liberty Lines and Baleària)

The Morace family has been associated with shipping for many decades – what are the family’s current activities in ferry shipping and what is your role in the family business?

My family still owns Liberty Lines, a fast ferry shipping company connecting all the islands in the south of Italy with approximately 30 hydrofoils and catamarans etc. I am no longer involved in the day-to-day running of the company however I remain a shareholder.

You left Baleària earlier this year. There have been ties between your family and Spain for many years. What are the origins of these ties?

My father was one of the first owners running a fast ferry route in Spain connecting Las Palmas to Tenerife in the Canary Islands with a gas turbine-powered Westamarin catamaran. The route was a disaster as many passengers suffered seasickness so he decided to move to Lanzarote where he inaugurated the first maritime connection between Playa Blanca in Lanzarote and Corralejo in Fuerteventura. It was then when we all moved to the Canary Islands. My wife is Spanish, my fist son was born in Spain and I have been the Spanish consul in Messina, Italy, for more than 20 years. My second country is indeed Spain where I’m living now.

As a broker you are undoubtedly monitoring the short-sea ro-ro and ferry market with an eagle eye. How is the COVID-19 crisis influencing the S&P market as well as the values of short-sea ro-ro and ro-pax ferries?

The market in general has indeed been very much affected by COVID-19, observing none or little activity in the number of transactions. Nevertheless, ro-ro and ro-pax remain more or less at the same levels. The decision of selling or purchasing vessels is not influenced by factors related to price. Currently owners are just focused on keeping their companies alive and navigating them through this storm.

Do you expect any opportunistic buyers making use of this situation? Will the situation improve in the short to medium term?

I do believe it is a buyer’s market right know. Crisis always brings opportunities. With all the uncertainty with regards to the spread of the pandemic I can’t see strong improvements in the short term. On the other hand, in the long term I expect supply and demand to rebalance themselves.

There was already overcapacity in the ro-ro market prior to COVID-19. Is scrapping of old and not-so-old tonnage the way forward to get the market in balance again?

The COVID-19 crisis has brought shocks to the demand side of the market. On the supply side, there clearly is an excess of tonnage and rightfully many shipowners have decided to scrap some vessels, especially the oldest and less efficient ones.

Do you expect a further consolidation of the ferry market in the wake of the crisis with the powerful and financially sound operators only getting bigger at the expense of the small and/or financially troubled players?

In the current scenario I believe it is inevitable that the smaller players will face enormous financial struggles and will be subject to acquisition or some other form of integration with bigger players.  Consolidation is a trend that has always been part of this industry and it will only be accelerated by this crisis. Only the owners that have been supporting investments while keeping an eye on cash flow management will prevail and will be in a position to operate in the post-pandemic market.

The COVID-19 crisis will undoubtedly also heavily influence the newbuilding market of large ro-paxes – perhaps this market will be dead for the next three to five years?

Undoubtedly the biggest players are waiting to see how building prices evolve and will then take decisions with respect to signing new orders. I would not necessarily label the newbuilding market as a dead one, as new technological advancements are reducing the operative life of vessels and are forcing owners to invest heavily in their fleets if they want to remain competitive and offer added value for their customers.

A shrinking orderbook doesn’t bode well for the Chinese shipbuilders… Perhaps the supremacy of Chinese shipbuilders in the ro-ro and ro-pax markets is at stake?

I don’t think so. On the contrary, I believe that Chinese shipyards – while they keep attracting more and more experts to address shipowner’s needs – will be in a very good position to gain market share when the market recovers momentum again.

What are your favourite pastime activities?

I love sailing with my 57-foot sailing boat.

What is your favourite football team?

Napoli, of course!

What music do you like?

All kinds of music. My favourites…?  U2!

What is your idea of a perfect holiday?

Sailing on my boat with all my family aboard with no planned itinerary.

What is your favourite dinner and drink combination?

I like very much the Mediterranean food, especially seafood. But if I have to choose, I prefer a nice steak with fries and an iced bottle of artisanal blonde beer.