This past week I have had the great fortune to attend both the 15th Annual Capital Link New York Maritime Forum and Monaco Maritime CEO Forum 2023. In one aspect my attendance in Monaco was complete luck, with chance favoring the observant mind. These meetings continue to demonstrate the value of conferences in my investment process. My wife is studying in October at a French immersion course in Villeneuve-sur-Mer, and months ago I decided to visit her for a week after Capital Link. I only learned of the Monaco forum by accident in the last week of September, and thanks to the organizer’s graciousness, I was able to attend.
The conferences in many ways are opposites. The Capital Link conference is large with a significant number of panels and the opportunities to meet individually with management teams and other smart investors. Monaco is small and intimate, with four sessions and an orientation towards private shipowners. Except for Mikael Skov, CEO Hafnia and me, there was no overlap in attendance. In many aspects they are very different. On the other hand, at both the attendees and the speakers were accessible and friendly. Together they provide a holistic view of the opportunities in shipping.
I would like to summarize my key insights from both:
- China is still the world’s second largest economy with a population of 1.3 billion. It is the world’s largest consumer of commodities. Discussions of its economic demise are wildly premature.
- There is an acceptance today that the world will be using conventional energy for years to come, and that energy security is critical for all countries.
- There is no single magic bullet for ship decarbonization. Actually, there is, small nuclear reactors, but that is the subject of another blog post. Instead, it will come from several small initiatives such as antifouling paint and slow steaming that, taken as a whole, will add up to a significant reduction in emissions.
- The industry is just at the beginning of harnessing economies of scale. We expect over time there will be more and more of them, starting with regulation and moving to access to capital.
- There will be more and more US listings of Norwegian and European only shipping equities. The valuation gap is too large between markets, and the liquidity is much better in New York.
- There is a shortage of shipyard capacity globally, with no quick or easy solution. It will be especially acute when the dry bulk and tankers industries are able to settle on propulsion.
- It would be terrific to see the ship management industry come public, as well as to have US listings of pure play car carrier owners.
I’m very grateful to have been able to attend. Conferences are invaluable, especially as more and more of us work remotely. I hear other generalist investors complain about the volatility of shipping. I like to praise its virtues and the Capital Link and Monaco conferences are certainly among them.
