🔒Quietly, Stamford has been a top international maritime shipping management center; but it’s an industry in flux

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Stamford has only a modest waterfront in comparison to the busy commercial port of New Haven just down Long Island Sound.

It has no shipyard to rival Groton’s Electric Boat. But the city is nevertheless vital to Connecticut’s — and indeed the global — maritime industry in less visible ways.

For decades, Stamford and lower Fairfield County have been one of the world’s top international shipping management centers, with storied companies in global maritime transport headquartered or with regional offices in the county.

“Shipping is one of several industries where we do have what I would call a cluster,” said Stamford’s Economic Development Director Leah Kagan. “I think this reinforces that Stamford is an international hub for businesses that are essential in the global supply chain.”

The origin story for this cluster was the move of Stolt-Nielsen and Skaarup Shipping from New York to Connecticut in the early 1980s to take advantage of the state’s proximity to the port of New York, without the expense of a Manhattan address.

“When you have two major, innovative principals moving to Connecticut, all of a sudden all of the brokers, the cargo interests followed,” said Jim Lawrence, the chairman of Marine Money, a ship finance network headquartered in Stamford. “Connecticut is still the largest home of the mind and management for international shipping in the United States.”

For 40 years, the Connecticut Maritime Association (CMA) has run North America’s premier shipping industry event in Stamford each March.

“It’s not just Connecticut companies, it’s throughout the U.S. and actually throughout the world, people are members of the CMA,” said Lorraine Parsons, chair of the association’s education foundation. “So the trade show, the conference is a very international place. It transcends Connecticut in a big, big way.”

The region is not unchallenged in its dominance, though. Stolt-Nielsen, one of the first shipping giants to move to Connecticut 40 years ago, in 2014 relocated most of its workforce to Houston — the busiest port in the U.S. International shipping company Clipper Group closed its Stamford office in 2017, and consolidated its North American operations to Houston.

In May of this year, hybrid marine fuels firm Dan-Bunkering announced it was moving its headquarters from Stamford across the Sound to King’s Point, New York, citing it as a more affordable and diverse environment for the firm’s employees.

Meanwhile, Stamford-based Eagle Bulk Shipping, a dry bulk commodities specialist that owns more than 50 supermax and ultramax ships, closed a deal in April to merge with the much larger Star Bulk Carriers. The resulting company is headquartered in Athens, Greece.

“There are relatively few people in the shipping industry in the United States, and those people who are in the shipping industry in the U.S. tend to either be in Houston, Texas or Connecticut,” according to Hamish Norton, president of Star Bulk.

“There were certain aspects of combining information technology with commercial operations that the people in Stamford did better, and we’re trying to roll that out to our organization,” he said.

For that reason, the company will keep a Stamford footprint, even though the local headcount will shrink slightly.

At the end of 2023, Eagle Bulk Shipping, which also had offices in Singapore and Copenhagen, said it had 105 shore-based employees, not including 1,025 officers and crew members who worked on its owned fleet.

“The Stamford operation will change inevitably because it’s no longer the headquarters location for a public company,” Norton said. “But most of the functions that were being performed still need to 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 basically 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 investment, and that’s the other main reason for consolidation. Most shipping 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.