Hartford Business Journal

HARTFORDBUSINESS.COM | JULY 8, 2024 17 be performed. So, there's technical management, there is operations management, there is chartering, there is accounting. Frankly, we had good people doing valuable things." Looming threats Norton says the main impetus behind the merger — and much of the current flux in the maritime industry generally — is the need to get ahead of a couple of looming challenges. One is the imminent pivot to greener fuel sources. "We want to be in a position of strength when the international maritime organization of the United Nations and other regulators basi- cally require us to decarbonize," he said, adding that is probably going to happen sooner "than anybody is ready for." He cites decarbonization as one of the reasons the largely unconsolidated shipping industry is seeing an uptick in merger and acquisition deals. "It's probably the hardest thing that people in shipping have had to do in 50 years," Norton said. "The ships are going to have to burn a completely different fuel. You don't want to get ahead of the regulations because you could easily make the wrong decision, but you have to be ready, and you have to act at precisely the right moment." The fuel switch will require invest- ment, and that's the other main reason for consolidation. Most ship- ping companies have smaller market caps that can't attract the biggest institutional investors. "We are the largest listed public dry bulk company in the world, and we have a market cap of $3 billion or so. And that's just not big enough for the largest investors," Norton said. "We need to make sure we're investable." To that end, Star Bulk is actively seeking more acquisitions in the immediate future. The company reported $949.3 million in voyage revenue and a $173.5 million profit in its fiscal year 2023. Eagle Bulk Shipping reported $393.8 million in revenue last year and a $22.7 million profit. Bridge fuel Another related industry that's looking to raise capital is liquefied petroleum gas shipping. Dorian LPG, which established its headquarters in Stamford some 10 years ago, just completed a public offering that netted the company $85 million, according to Chief Financial Officer Ted Young. "Our sector is growing nicely," he said. "I think what we hope and expect to be able to do is renew and ideally expand our fleet of vessels." The company, which employs 16 people at its Stamford headquarters, has 25 ships in its fleet currently, and says it sees plenty of opportunity for growth in the liquefied petroleum gas market. "It's a cheap and relatively clean source of energy. And the U.S. continues to produce far more than it consumes," Young said. "It's really a bridge fuel that's part of the world's desire to decarbonize and address climate change." For the moment, despite looming challenges, times are good in the shipping industry. The bounceback from COVID-related shutdowns in global trade have been historic, and current geopolitical disruptions including the wars in Ukraine and Gaza, and attacks on ships by Houthi rebels in the Red Sea, have spiked sea freight costs. "Right now we have a nice supply-demand balance," said Marine Money's Lawrence. "And, these logistics disruptions caused by the geopolitics have extended the routes, the ton-miles that ships have to take. And that just means more revenue days." That means, for the moment, record profits for shipowners and operators, but also inflationary pressures and potential economic disruption ahead. Feel good about your bank Connect with us today! 860-448-4295 NMLS #402928 ChelseaGroton.com/GrowThatBusiness We'll create a personalized solution to help you save for what your business really needs. S T A R T Y O U R P E R S O N A L I Z E D EASTERN JOURNEY NOW! www.easternct.edu/journey Source: National Ocean Economics Program 2013 2014 2015 2016 2017 2018 2019 2020 2021 TOTAL CARGO VALUE Value of cargo moved through CT ocean ports $600M $500M $400M $300M $200M Ted Young

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