Justin Archard sits down with Kyriacos Panayides, a ubiquitous presence in the multipurpose and heavy lift shipping business and architect of one of the sector’s success stories, AAL Shipping.
It is really no wonder why noise cancelling headphones have become so ubiquitous on London’s Underground. Up and down the carriage, young or old it does not seem to matter, people are walled into their own world of sound. Gone is the idle chatter and the broadsheet newspaper reader. Now it is a world of headphones and screens. And for good reason. As an infrequent visitor to London, and not having gotten the headphones memo, I had forgotten how loud the underground is. Ear-splitting at times. Steel wheels shriek against steel rails and the familiar clackety clack of rail sections crack like a firestorm of gunshot.
As familiar station names fly by, crowds of people hustle on and off with the same pulsing rhythm as waves crashing and receding against the shore A timeless voice repeatedly reminds you to ‘mind the gap’. It is sensory overload.
Oasis of calm
The contrast only minutes later is therefore jarring. The West London hotel lobby in which I am to meet Kyriacos Panayides for lunch is an oasis of calm and hushed voices. Vanilla essence hangs in the air and long-coated, white-gloved staff wish you a good morning as they pass by busy in the service of patrons. It is the sort of place where everything seems to happen intuitively, with the minimum of fuss, but which belies the hard work and organisation it takes to achieve it.
I am thinking about this later as I wander back out onto the London streets following the conversation I have had with Kyriacos about his life and his role at the head of the multipurpose carrier AAL Shipping. Despite the enormous responsibility and the thousands of activities that are taking place every day across the organisation, Kyriacos, the company’s ceo, is unhurried and relaxed about the business he is responsible for – which carries on, relentlessly and without fuss.
He greets me in the lobby with a gentle smile and we are led to a quiet corner of the restaurant. It is early for lunch and we are the only diners which suits us just fine. It is the morning after the Heavy Lift Awards, held at The Royal Lancaster Hotel and AAL has won the Ship Operator of the Year Award for a second successive year and the third time overall. Winning awards has become a habit for AAL. No other ship operator has won so many or so quickly. “Why do you think you are so successful at the HLPFI awards?” I ask. “We approach it like everything else,” he replies. “If you going to participate in something you sure you do a very good job at it and that the drive throughout the company.”
If you are going to participate in something you make sure you do a very good job at it and that is the drive throughout the company. – Kyriacos Panayides
Modest and quietly spoken
Kyriacos Panayides – ‘KP’ to most who know him – is a modest and quietly spoken man. Ever-present at exhibitions, conferences and public events, he is approachable and welcoming.
He has spent his entire 32-year shipping career in the service of the Schoeller group, originally at Columbia Ship Management then with Schoeller Holdings, where in 1995 AAL – or Austral Asia Line as it was originally known – was established as a small liner service between Queensland, Australia, and Papua New Guinea. In the ensuing 28 years, AAL has grown to be a market leader in worldwide breakbulk and heavy lift shipping operating 24 premium project heavy lift vessels with lift capacity up to 700 tonnes, and six newbuildings on order that will start to be delivered in 2024.
Born and raised in Limassol, Cyprus, and now in his mid-50s, KP enjoyed a modest and carefree childhood during a time of relative tumult for the island. In a complicated recent history stemming from 20th century British colonial rule, sovereignty wars have been fought, even very recently, between Cyprus and Türkiye. A Turkish enforced partition still exists between the north and the south of the island and continuing efforts to end the stalemate have so far proven beyond reach.
Lifelong home
The Mediterranean Island remained his lifelong home after graduation of studies abroad, together with his wife, though there has been extensive frequent business travels abroad and for a brief period, he relocated to AAL’s headquarters in Singapore. Being a proud father of two daughters, the eldest one has returned to the island working for an international law firm after studying law at University College London (UCL), while the younger has recently graduated from Imperial College London with a BSc in economics and an MSc in finance.
“Not interested in following their father into shipping,” I ask? “No,” he chuckles. “I don’t think they want to be in a shipping career having to carry the tug of being the daughter of KP. They want to do something on their own.”
KP’s father was an engineer and worked in various industries, including some years in the Arabian Gulf during the 1970s, as well as at a ship repair facility for a brief period. For a time, his mother ran a small family business.
“We lived down by the beach on my mother’s family land with acres of lemon trees. During my childhood, I remember spending most of the wintertime harvesting lemons for export after school. In the age of secondary school, the lemon trees had all gone and the area turned to the famous tourist area of Limassol, and so did our small family business – from farming to property landlords, a video club renting video tapes, and a small tourist restaurant”.
So, what was it that appealed to a young KP about shipping? After all it was not the family line. “The challenge of dealing with the whole world and no borders,” he offers quickly. “That was an amazing thought.”
Cyprus in the 1980s was becoming a shipping hub, particularly for ship management, owing in part to its position at the crossroads of three continents as well as because of its early adoption of a competitive tonnage tax regime. One after another, major ship management companies registered there, and it continues to be globally significant, handling more than 20 percent of the world’s third-party management fleet.
As a graduate of business administration studies and a postgraduate in shipping studies, and later becoming a member of the Institute of Chartered Shipbrokers to boost his credentials, jobs for highly qualified locals in this quickly expanding shipping economy were easy to find.
Joining Columbia Ship Management initially to handle management accounts, it was when crossing over to the Schoeller Holdings company that KP was to ultimately find his place. The holding company was involved in many shipping segments, including shipowning, with other group companies active in commercial operations, aside from the ship management segment.
The story of AAL began in 1995, when a visitor approached Mr Schoeller telling him that a company offering a multipurpose liner service from Southeast Asia to Queensland ceased operations, offering a good potential for a new owner to take over. At the time when the group was expanding in many other territories, the decision to embark on this was rather an easy task. Soon enough, a small team was engaged to set up the new business with an office in Brisbane and in Singapore, and with KP taking over, in charge of the financial aspect of the business.
The challenge of dealing with the whole world and no borders, that was an amazing thought. – Kyriacos Panayides
Within three years the line had expanded to include calls in China, South Korea and Japan supported by a small fleet of second-hand vessels. “When the Asian financial crisis hit [at the turn of the millennium] trade slowed and it became difficult, so we had to scale back.”
Irresistible offers
Fast forward to 2008 and the multipurpose sector is enjoying its heyday. Fantastic freight rates and profits propel the MPP sector to the head of those most investable at shipping banks – German banks in particular – with never to be repeated loan offers to build new ships proving irresistible to owners. AAL was among them, ordering 14 newbuilds. Little did they know at the time that they were playing their part in seeding a long and deep recession fuelled by industry oversupply that bankrupted many and ruined the reputation of the sector in the eyes of the financing establishment. It is an attitude that still exists and partly explains why after the recent pandemic-fuelled boom of 2021/2022 there is still only a small multipurpose orderbook despite a quickly ageing fleet.
When the dam burst in 2010, ships being delivered to owners were worth far less than the cost to build them and the loan book went into immediate default.
Full control
“We realised early on that unlike with bulkers or tankers, in MPP you need to have full control of every aspect of the service,” KP explains. “You must own the ships, train the officers and crew, and have a full set of onshore resources like engineering, operations and chartering staff and have the right systems and management structure to provide the total service that clients expect. You cannot do this with third-party ships as you cannot exercise the necessary control over the entire service.”
It was this fully integrated format and service-based objective that kept the banks sufficiently at arm’s length long enough for the market to recalibrate and find its floor. After all, banks can repossess ships but then they need someone to operate them.
What about his own leadership style and the culture he has developed within the company? “Everyone knows me,” he says. “We are a team at AAL. We don’t have one person more important than another. Every member of the AAL team has an area and a role to play, and they all need to feel part of the whole endeavour. It’s not a one man show. We have never had this at AAL. We have had people at times that have had this ego behaviour and some of them are out because of this… my allergy is people with ego – I tend to jump in to take the blame if something goes wrong whereas when success arrives, step back and dedicate the success to the team. My constant aim in the day-to-day job is to interfere as little as possible, so as to allow the teams ownership of their own areas, thus getting the feeling of self-motivation and satisfaction of their actions and achievements. For this, we are blessed at AAL… we have a great team.”
With no plans to slow down or step back, what are the next big steps for AAL, I ask? What are the big objectives that are key to AAL’s development?’
“The sustainability of our business is our priority objective and we have released our sustainability report to the public so they can read for themselves how we approach issues of environmental impact and mitigation, societal inclusion and corporate governance. It is our three pillars. We are transparent about this and it is available on our website. We also have a duty to justify the fact that the industry awarded us as the best operator of the year. We have to continually strive to offer a quality service to our clients and always stay focused and devoted to our true values of accountability, approachability and leadership. There is no time to rest for this, we just carry on with same passion and enthusiasm.”
We are a team at AAL. We don’t have one person more important than another. It’s not a one man show. We have never had this at AAL. – Kyriacos Panayides
Of these, I wonder, which is the biggest challenge? “Gender balance,” he is quick to reply. “This is very challenging. There simply aren’t enough women in the business or who want to come into the business to even up the numbers. It’s an area we are really working hard on – a key challenge.” There is also an issue of the younger generation whom he says, “don’t seem to have the same sense of loyalty as in the past. There is a perception nowadays that job hopping advances careers. But I don’t think that is true.” It is a remark mostly aimed at Gen Z and millennials who have been brought up in an online world, who live with the need for quick and constant content and happily skim across the surface of life.
Love of football
I wondered whether he had any regrets. “Well, I sometimes complain that I didn’t have a son,” he says mischievously, “only because I would have had someone with whom to share my passion of football, and have more than only female conversations at home. I enjoyed being involved in football affairs in Cyprus, though this always has an expiry date in Cyprus football. I served my football club, Apollon Limassol, for 10 years, up to the capacity of vice president, with strong, pleasant memories – especially those years when we won the championship and cup finals. I guess those were the times that I wanted to have a son next to me.”
The waiter approaches and clears the table of our lunch plates and empty coffee cups. “What do you have planned for the rest of the week,” I ask? “Well,” he says under a wide smile “my daughter is in London and so am I.”
