Anxiety Is High at NYC Shipping Conference

On the sidewalks outside the Pierre Hotel, the cigarette smoke rose and so did the anxiety.

The people, mostly men in dark suits, were taking smoke breaks from the conference, called Marine Money Week, the annual shipping-business confab in New York sponsored by a maritime trade journal of the same name. The accents were Greek, Norwegian, Danish, Texan, Oxbridge -- and more Greek. The anxiety had to do with a massive multi-billion-dollar, industry-wide shortfall between the number of ships on order from builders, and the money needed to pay for those orders.

During the boom times, that money would have come from banks. In these times -- reports of thawing credit markets notwithstanding -- the banks were being intractable. At the conference on Wednesday, five banking executives found themselves in the awkward position of sitting at a table on a dais in front of a ballroomful of ship owners, and telling them, essentially, that their hands were tied.

"The commercial banks were up there saying, 'Don't come to us,'" said Omar Nokta, the shipping equities analyst at Dahlman Rose, a boutique investment bank that's co-sponsoring the conference. "The banks right now are just not willing to step up."

The numbers floating around the conference told the story. The industry as a whole -- from tankers to dry bulk -- had ordered $5 billion worth of new ships (anticipating, it should be noted, an economic turnaround -- a speculative play, in the opinion of some industry people). So far, only $2 billion of that had found financing.