There is a lot of money in shipping, but how do you get into the industry? Do you need a lot of technical knowledge? Good question. I have no idea to be honest. But if it is like anything it used to be about 50 to 100 years ago, all you really need is good connections.
WHAT KINDS OF CONNECTIONS?
Back then I don't think it mattered how much expertise you had. Aristotle Onassis I think is a good example. He was a tobacco guy, who just saw that he could make more money shipping the stuff than just making it. So he bought some cheap ships via a deal with the US govt. He sold them equipment for old ships and then he used those old military ships to transport tobacco. And then because he made so much money he just kept buying and buying ships.
WHY DO YOU NEED CONNECTIONS AND NOT JUST MONEY OR EXPERIENCE OR EXPERTISE?
But I think networks are still crucial because of insurance. Insurers usually can't insure these vessels because the financial loss in the event of a ship sinking is just too big. They can get insurance for hull/machinery damage or for cargo loss, but not for major events like the ship sinking. Such events mean financial losses of hundreds of millions, and even billions, of dollars. Especially for LNG or PNG ships. Liquified Natural Gas or Petroleum Gas ship prices can literally reach up to a billion dollars each.
PROTECTION AND INDEMNITY CLUBS TO THE RESCUE
It would be relatively easy for someone to take out a ship to get the insurance money directly or indirectly.So what the shipping industry does is they have what they call P&I clubs. Yes you heard right, CLUB! P&I stands for Protection and Indemnity Club. So these are groups of shipowners who join together like in a medical scheme / health insurance. They have a kitty that they all contribute to that would cover some adverse event. If nothing happens, the next year the contribute a little less.
If something big happens like an oil spill or a ship sinks, they all contribute more next year. Sounds pretty primitive, but that is how it works. It works by the principle of General Averages, which was developed by the Ancient Greeks. No wonder the Greeks are so good at shipping. Onassis was Greek.
