Learning from bulk lessons

With the topic of ‘A SWOT Analysis of the Port of New York’, several dozen lawyers, financiers, shipbrokers and assorted hangers-on attended a thoughtful presentation by Roland Lewis, president and chief executive of The Waterfront Alliance. The Alliance is a well-resourced and strategically connected community group with a mission of organising a better constituency around New York’s waterfront.

Not surprisingly, nobody from the City of New York, from the New Jersey side (where many of the terminals are) or the Port Authority of New York & New Jersey attended; public sector folks rarely show up at NYMAR meetings. Why is this? These empty chairs are symptomatic of problems in New York, identified in multiple presentation pages since SWOT stands for Strengths, Weaknesses, Opportunities and Threats.

It bears repeating: the maritime activities around my home town get lost. Mr Lewis described a port that’s invisible, characterised by “public and political indifference”, while other meeting attendees emphasised the speaker’s points about limited governmental jurisdiction with vast bulk shipping tonnages in private hands.

Liner shipping – within the purview of the PANYNJ by virtue of its role as a port landlord – also fails to get much high level respect, Mr Lewis noted, because it is lost in the roar of trucks (bridges), jet engines (airports) and construction activity (property ownership).

The relationship of NYMAR, with its heavy slant towards bulk shipping, to other New York area maritime movers and shakers with a liner shipping focus is particularly vexing. Here, Mr Lewis did hit on one important area where the bulk shipping community has enormous expertise: disappointed private equity investors.

One of the “threats” identified in the presentation was exactly this, disaffected infrastructure funds that had bought into terminals at hefty multiples, in a similar vein to the private equity funds that took positions in shipping outfits just before an illusory upturn.

Port finance professionals dealing with vexing situations, as investors frown in New York and elsewhere, might well connect some dots. Consider that the backer of one of the larger terminal operators, with a big presence in New York by the way, is actually a subset of a $100bn-plus behemoth that is also a large investor in several failed shipping deals. Those shipping deals have been restructured, some multiple times, with fund investors living to fight another day. Those finance professionals might just pick up a few pointers – and business cards – at the next NYMAR meeting.