For the first time, after years of efforts to start this dialogue, the commercial shipping eco-system - with a huge concentration of people and capital in New York - was brought together with top officials from the Port Authority of New York and New Jersey (PANYNJ), the City of New York, and New York State.
Luncheon keynote speaker, New York’s Lieutenant Governor, Kathleen Hochul, identified shipping as an important cluster- with New York’s key role now on the radar of policy makers dealing with better known, mainstream industries.
The presenters from the PANYNJ, a political body now in the spotlight due to its ongoing “Bridge-gate” scandal, talked about the port’s move to compete in the East Coast arms race- attracting “discretionary cargo”. Bethann Rooney, assistant director of the PANYNJ’s Port Commerce Department, said that after the raising of the Bayonne Bridge (not the site of Bridge-gate), with late 2017 expected completion, 12,000 teu vessels would be expected to be the new “workhorse” in the port, with some 14,000 teu vessels, and possibly some 18,000 teu ships) making calls at the port.
Asked about the longer-term focus, Rooney first noted that there is no land for future expansion, so the going forward emphasis will be “densifying and automating” of facilities.
On the bulk carrier panel, StarBulk’s Hamish Norton pointed out that new regulations regarding steel and nitrogen oxides on newbuild ships will decrease owners’ margins, and looking in the direction of fellow panelist Hugh Baker, from Scorpio Bulk, stressed that eco bulk carriers, of which it owns a few, were very desirable. All of the panel members agreed that required investments in ballast water treatment systems (BWTS), with the Convention ratified only last week, could tip the scales towards greater incremental scrapping.
But the real question about scrapping, movements of coal, iron ore and other commodities, is “So what?” Panelist Ioannis Zafirakis from Diana Shipping pointed to emotions, rather than the inputs and outputs of economic models, as the drivers of the shipping market.
The tanker panel brought multiple mentions of “summer slump and inventory drawdowns”, with all of the panelists looking for rebounds later in the year. Harrys Kosmatos, from Tsakos Energy Navigation, expressed a concern that a high oil price - were it to occur - could slow down the development of the products market, which he saw as being stronger in the nearby timeframe, and the crude oil tankers, which he saw picking up again after the refined products sector.
The finance panels offered little in the way of fresh insight- the industry’s present money-raising struggles are well known. Banks are sidelined, and private equity might fill the funding gaps, maybe. The Hanjin debacle was discussed on a financial restructuring panel, with AMA Capital’s Paul Leand suggesting that its vessels would dribble into the sale and purchase market. Noting that its container ships tend towards the smaller sizes, Leand was not optimistic prospects for prices to be achieved.
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