With much of the world’s attention focused on China and the Olympics it is not surprising that this has brought the freight market front and centre for many people.

For a long time there had been talk of a post-Olympic malaise as China completes it’s showcase to the world and then returns to business as usual. What we are seeing perhaps though is a marked slowdown in activity – combined with the traditional summer lull- as China at the very least tries to minimize pollution from the factories. There are many who expect a post Olympic uptick in the markets. Time will tell.

Meantime the capital markets continue unabated. As we go to press a new public company is being listed as Marathon Acquisition Corp complete the purchase of Global Ship Lease – a 17ship container ship fleet. This transaction embodies the resilience of the New York markets as this deal failed to price at the end of last year. The SPAC market (special purpose acquisition corp) is alive and well and shows just how creative the markets can be.

And to add to the creativity mix. General Maritime (and in full disclosure I do sit on the board of Genmar!) is acquiring Arlington Tankers in an all share transaction.  I think this is the first all share transaction between two U.S. publicly listed shipping companies and evidences yet again the power of the capital markets.

As we head into the fall season, we are working on our fourth quarter annual conference, which will likely we be a one-day seminar that will highlight the realities of Sarbanes Oxley and the capital markets.

Yes, it is all about the money but it does make the world go round.

Dahlman Rose & Co has agreed to provide NYMAR readers with its Dry Bulk Shipping and Tanker Shipping Indices. The index data, which is being calculated by Standard and Poors and disseminated on a real-time basis by the Chicago Mercantile Exchange, represent the only publicly-available indices that track the movements of U.S.-listed Marine Transport companies. The indices will display how the Dry Bulk and Tanker Shipping markets are performing on a real-time basis.

http://www.dahlmanrose.com/indices

Marathon Acquisition Corp. just announced the closing of the merger with a containership charter owner, Global Ship Lease, Inc.(GSL), the ship-leasing unit of French shipping group CMA CGM. Under the deal valued at about $1bn, CMA CGM will retain about 23 percent of GSL, less than the 34 percent stake it was initially expected to keep. GSL’s common stock, warrants, and units will begin trading on the New York Stock Exchange under the symbol ‘GSL,’ ‘GSL.WS,’ and ‘GSL.U,’ respectively, on August 15, 2008. Marathon is ‘blank check’or SPAC (special purpose acquisition company) that was formed in 2006 by Michael Gross, a former executive at Apollo Management, the company that initiated by CEVA Logistics.

Michael Gross, Chairman and Chief Executive Officer of Marathon, commented, “We are pleased with Global Ship Lease’s listing on the New York Stock Exchange and are extremely optimistic about the Company’s future prospects.” Marathon believes with an experienced management team and strong balance sheet, Global Ship Lease is in a strong position to take advantage of favorable long-term industry fundamentals, meet its growth objectives while providing shareholders with growing quarterly dividends.

Michael Gross, Chairman and Chief Executive Officer of Marathon, commented, “We are pleased with Global Ship Lease’s listing on the New York Stock Exchange and are extremely optimistic about the Company’s future prospects.” Marathon believes with an experienced management team and strong balance sheet, Global Ship Lease is in a strong position to take advantage of favorable long-term industry fundamentals, meet its growth objectives while providing shareholders with growing quarterly dividends.

General Maritime Corp. (Genmar) just announced that it will buy Arlington Tankers Ltd. in a stock-for-stock deal. Genmar shareholders will receive 1.34 shares of the merged entity for each share of their Genmar shares, while Arlington Tankers shareholders will get one share of the combined company for each Arlington Tankers share. General Maritime Corp. will be the name of the combined entity will continue to be listed on the New York Stock Exchange and trade under the ticker symbol ‘GMR.’

The merger worth $2bn will establish a company with a diverse fleet of 31 vessels and a presence in both crude and product segments. The two companies are expected to secure cash cost savings of about $7.5 million and generate a combined $353 million in revenue for 2008.

General Maritime shareholders will own about 73 percent of the company with Arlington Tankers shareholders holding about 27 percent. The company’s board will include the six existing General Maritime directors and one director from Arlington Tankers. The deal, dependent upon shareholder and regulatory approval, is anticipated to close in the fourth quarter.

The Baltic Dry Index (BDI) plays an important role in signaling current global growth trends. Managed by the Baltic Exchange in London, the index, which has been down the past month, saw an increase of 105 points, or 1.5%, on August 13 bringing it to 7,097. U.S listed dry bulk shares tend to trade in close correlation with the BDI and have seen shaky performance of its stocks despite fairly strong dry bulk markets. Nonetheless, the BDI index jump was immediately followed by the New York listed bulk shipping companies seeing gains with Peter Georgiopoulos run Genco Shipping & Trading increase by 10.2% to $59.72, Excel Maritime Carriers’ shares jumping 11.1% to reach $39.12, Navios Maritime Holdings’ shares jumped by 8.2% to $9.27, and DryShips saw a 10.2% increase, with its stock price reaching $74. TBS International, Diana Shipping and Euroseas were other dry bulk stocks that increases of more than 5%. The Capesize Index rose 561 points, or 5.2%, closing at 11,256.

New York based Lazard Capital Markets analyst Urs Dur said in his recent report, “The BDI upturn is expected to start by end September, and dry bulk shares are likely to follow suit.” Increasing demand for the movement of steam coal, increased iron ore import demand, the seasonal grain trade, and a persistently tight supply of ships through the end of 2008 should put the BDI on an upward trend in the next 40-60 days, and Lazard sees the trend lasting into December. “We recommend that investors take advantage of the projected near-term upside by buying shares of quality companies with built-in growth, long-term contract cover, solid balance sheets, and top management; we reiterate our BUY ratings on Genco (GNK), Eagle (EGLE), and Navios (NM),” Mr Dur advised.

While the analysis of certain supply and demand factors can provide near-term guidance and insight, it is important to note that the shipping industry is cyclical and volatile and market conditions are difficult to predict.

The NASDAQ, which has been a major player in bringing shipping companies to the public realm remain optimistic on the shipping sector amidst volatility. Don Johnson, managing director of the NASDAQ Market Intelligence Desk told NYMAR, “The outlook for the shipping industry in the second half of 2008 is positive particularly for the dry bulk sector - as spot charter rates are expected to increase significantly due to iron ore and coal demand and favorable seasonal factors.”

Mr Johnson believes, although tanker rates are expected to soften for the remainder of the year as a result of weakened demand for crude oil and an oversupply of crude oil tankers, the long-term outlook for crude and product tankers is positive given the companies’ current valuations. Mr Johnson said there are talks of potential IPOs but none has filed an S1 registration statement. There have been only two IPOs so far in 2008.

As of the quarter ended June 30, 2008, 21 shipping companies were listed on The NASDAQ Stock Market and had a combined market cap of $13.

New York based private equity firm, The Jordan Company has agreed to acquire marine transportation company Harvey Gulf International Marine for $500m. Under the terms of the agreement, The Jordan Company would take a 76 percent stake in the company, with management holding the remaining 24 percent. Richard Caputo, managing partner, The Jordan Company, said, “The forward-thinking company strategy which Harvey Gulf has carried out for over half a century has proven to be a success year after year. We are excited to work with the Guidry Family and carry on the tradition of quality service within Harvey Gulf International Marine.”

Shane and Shawn Guidry are the third generation of the Guidry family to own and operate Harvey Gulf. Shane Guidry will remain chief executive officer (CEO) of Harvey Gulf and its affiliates, and also become chairman of the board and CEO of HGIM Corp., the entity acquiring Harvey Gulf.

Founded in 1955, the company has one of the largest fleets in the Gulf of Mexico, with seven ocean towing vessels, four anchor handling vessels, five offshore supply vessels, and one multi-purpose diving support vessel. The company plans to expand its fleet following the sale, adding more vessels to support deepwater operations.

Earlier this year, The Jordan Company closed its second private equity fund, The Resolute Fund II, on $3.6bn. Founded in 1982, the firm has over $5 billion of equity capital under management. Besides, New York, The Jordan Company has offices in Chicago and Shanghai.

New York based maritime investment bank AMA Capital Partners has signed up new expertise looking to venture into leasing, energy and offshore sectors. “We have appointed Charles Freeman formerly from GATX to spearhead our leasing efforts on the West Coast. We have also hired Bobby Bowers from Bovaro Partners to expand our energy and offshore platform,” Paul Leand, Managing Director at AMA Capital Partners told NYMAR.

Prior to joining the AMA, Mr Freeman worked at GATX Corporation for 23 years growing the Residual Value Guarantee business to over $300 million in the UK, Canada and Australia. This portfolio included a diverse list of equipment from construction and mining to oil and gas to blue and brown water vessels. Bringing with him 35 years experience in equipment finance and sales to AMA, Mr Freeman also led GATX into ship finance investing over $400million in 34 vessels with a market value over $1.25billion.

With over 25 years of energy industry experience, Bobby Bowers was a founding Partner of BOVARO Partners, a merchant banking firm focused on the energy industry. He previously worked in energy investment banking groups as a Senior Vice President at Jefferies & Co and prior to that as a Vice President at Schroders plc.

As an investment banker, Mr Bowers has worked on over $4 billion of public financings and over a $1 billion of merger and acquisition transactions, focusing on oilfield services, midstream energy and oil and gas exploration and production industries.

Mr Bowers has also worked for Banque Paribas and Manufacturers Hanover Trust, underwriting debt facilities for clients in multiple sectors within the energy industry. Besides, Mr Bowers brings in hands-on experience to AMA having spent time as a “rough neck” on onshore and offshore drilling rigs, learning about drilling equipment and processes.

With the new hires, AMA appears to be strongly positioning themselves to make its mark on the growing offshore and energy sectors. With an excellent record in the transportation sector for two decades, AMA Capital Partners has concluded major transactions that include names like OSG, General Maritime, Ship Finance International, Eitzen Group, Frontline, Golden Ocean, Clipper, Aegean Marine Petroleum among others.

Major global law firm Squire, Sanders & Dempsey LLP continues to expand its New York presence with the hire of three maritime lawyers from Holland & Knight. The new Squire Sanders lawyers are Brian D. Starer, Douglas R. Burnett and Juan A. Anduiza. “The maritime practice fits well with our integrated platform, as the practice complements several core Squire Sanders practices including aviation, communications, energy, environmental, international dispute resolution, litigation and structured finance,” said firm chairman R. Thomas Stanton. The reason for leaving former firm Douglas Burnett told NYMAR was thought out carefully. “For Brian Starer, Juan Anduiza, and myself it was a careful decision to leave an important national law firm where we have had so many fine professional colleagues. In one word, the attraction for the three of us to Squire Sanders & Dempsey is ‘Global.’ With 32 offices in 15 countries, and about a third of its lawyers non US based, this firm is global by any definition,” Douglas Burnett told NYMAR.

Mr Burnett said more than the number of countries where it is based, the strategic locations such as London, New York, Houston, Russia, Brazil, and China that make it interesting. The last three locations are widely believed to be strong players in a challenging global economy. “These three lawyers have extensive international experience working with clients with business interests in Europe and Latin America,” said Howard J. C. Nicols, advocacy practice area coordinator at Squire Sanders. With clients active in multiple nations, companies expect their law firm to be just as diverse and interconnected. “Maritime business in particular is global. We hope to add an important dimension to the impressive Squire Sanders & Dempsey global footprint and help its clients meet international logistic needs in a flat world,” Mr Burnett said.

Mr Burnett said the three of them are energized by the refreshing forward looking vision of the new firm and the gusto in which it approach a changing world. “To be part of building a global maritime practice is a challenge we could not pass up. We look forward to adding legends and rising stars from the admiralty bar worldwide to in this endeavor,” he added.

Founded in 1890, Squire, Sanders & Dempsey LLP, claims it has one of the strongest integrated global platforms with a longstanding one-firm philosophy.

Following an agreement just signed by MarAd Administrator Sean T. Connaughton and John M. Murray, president and chief executive officer of Hapag-Lloyd USA, cadets at the New York area merchant marine academies, Kings Point and Fort Schuyler, can now look forward to taking training voyages on Hapag-Lloyd’s international liner vessels. “Cadets will receive excellent training from skilled maritime professionals on a variety of seagoing vessels,” said Administrator Connaughton. “Hapag-Lloyd should be commended for their commitment to these American students,” he added.

This Memorandum of Agreement is the fifth such training agreement signed between the federal government and private industry. Previous agreements were with APL Liner, Ltd.; Overseas Shipholding Group; Great American Lines, Inc.; and SeaRiver. “Sean Connaughton has been working hard to achieve these agreements and now he’s done it with a carrier who does not even operate US-flag ships,” Keith Heard from New York law firm Burke & Parsons told NYMAR.

Maritime cadets must have sailing time on working vessels in order to qualify as licensed mariners. Currently, there is a worldwide shortage of licensed mariners, and U.S. maritime academies have geared up to train more students. Students will begin to serve on the foreign-flag vessels in October.

The Hapag-Lloyd group is one of the world’s leading liner shipping company’s, operating on all the major global sea lanes.

Republicans have mounted an assault in Washington DC on harbour maintenance taxes. All cargoes transported to a US seaport are now subject to the duty, which is equal to 0.125% of a cargo’s declared value or the value of passenger tickets. This harms the attempts to promote the US shortsea sector, the minority Republicans said. 


Republicans are symbolically continuing to work in Washington after Democrat leaders called a recess and left town rather than debate proposed energy legislation what would allow expansion of offshore oil drilling. 


The House Transportation & Infrastructure Committee’s ranking Republican, John L Mica of Florida, urged all political leaders to support exempting “the transport of domestic cargo via the nation’s coastal and inland waterways from the tax”. A statement from Mr Mica said, “With congestion clogging the nation’s highways and rails, our underutilized waterways can provide real relief by transporting significantly more freight, and can do it in a more environmentally friendly manner.”

Maritime Administrator (MarAd) Sean T. Connaughton accepted an application by Suez Energy to utilize a U.S-flag vessel in the company’s proposed ‘Calypso’ liquefied natural gas (LNG) import facility off the coast of Florida. The commitment made by Suez Energy to MarAd calls for Suez to register a newly constructed LNG regasification vessel, that will be used in the operation of its proposed deepwater port, under the U.S.-flag, and to employ American officers and crews in the operation of that vessel. However, Calypso’s application to build the deepwater port terminal must be approved by the Governor of Florida and the Maritime Administration after vigorous technical and environmental reviews are completed by the Coast Guard and the public comment period has closed.

The establishment of an LNG import facility off the coast of Florida will facilitate the diversification of the supply of natural gas to the region and satisfy the increased demand for an environmentally friendly source of energy in the Florida market.

This U.S-flagged and -crewed regasification vessel, known as a storage and re-gasification ship (SRS), will be a specialized LNG carrier that will remain moored at the deepwater port for continuous vaporization of LNG provided by standard LNG carriers. In the event of the severe weather, such as a hurricane, the SRS will move under its own power to safety; and then return to the deepwater port buoy to reconnect and continue operations once the storm has passed.

Previously, Suez signed manning agreements for the LNG tankers that will serve its deepwater port now under construction off the coast of Massachusetts. Further, the Suez flagging and manning agreement mirrors one signed by Woodside Natural Gas for its proposed facility off the coast of Southern California. These commitments are a clear indication of a real public-private effort on the part of both companies to provide the United States with a safe, secure, and efficient marine transportation system.