News

New York, New York, a Helluva Town To Do Shipping Business

Source: Lloyd’s List

February 18th 2016

Is New York a great place to be a ship-owner? What are some of the benefits and drawbacks of living in the Big Apple and running a shipping company, whether privately held or publicly traded? These were the main topics of a spirited panel discussion at the annual shipping conference hosted jointly by the Norwegian-American and Hellenic-American chambers of commerce.

The panel included ship-owners Robert Burke of Ridgebury Tankers, Philip Shapiro of Liberty Maritime, and Robert Shaw of Sea Trade Holdings; shipbroker Robert Pierot of Jacq. Pierot and Sons; and yours truly. It was moderated by Jim Lawrence of Marine Money.

Among the subjects discussed, or rather “debated” in honor of the US presidential races under way, were access to capital markets, legal and regulatory environment, access to or lack of a pool of qualified shipping professionals, maritime education, and yes even taxes and quality of living.

There was a broad consensus among panelists that the main impetus behind a shipping renaissance in the tristate area has been proximity to US capital markets. This has led to a number of shipping companies, public and private, setting up shop over the last 10 years. It has also led to a growing number of shipping professionals serving the industry, including commercial operators, bunkering firms, public relations firms, investment bankers, research analysts, media, and the seemingly ubiquitous lawyers.

There was however a loud criticism of New York’s high legal and regulatory costs, particularly for listed companies that must comply with the Sarbanes-Oxley Act, SEC regulations, and exchange-specific rules. The same is true for companies seeking a corporate restructuring through a trip to bankruptcy court.

There was even consternation at how ineffective SEC regulations are when it comes to issues of transparency and proper corporate governance. A few rumblings were heard that many times investors perceive shipping as synonymous to related-party transactions and not in a sympathetic way.

A surprise topic of discussion was maritime education, with some very strong calls for MBA-style programmers tailored to the shipping and logistics industries, and a better interaction between the two local maritime academies and the international shipping community.

Another unexpected topic was taxes and quality of living. New York after all is not famous for its low cost of living. It was stressed however that international shipping companies based in the US are not subject to federal or state income taxes on their shipping income. The only tax burden is a personal income tax on dividend distributions, although the applicable federal tax rate is only 20%, compared with the top marginal rate of 39.6%.

As to whether New York is a better place to live than say London, Hong Kong or Singapore, the old adage that all politics is local seemed to apply, with a predominantly NY-based panel unabashedly blowing its own horn.

The panel brought to a conclusion the 22nd annual joint shipping conference held each February since 1995. Having been through some pretty spectacular shipping cycles in its short history the conference has been a special venue for the two maritime nations of Norway and Greece to come together, celebrate their proud shipping heritage, reflect on the past, and plan for the future.