Robert J Pierot Jr. is the CEO of Jacq. Pierot Jr. & Sons a privately held, New York based SnP specialist that in 2019 celebrated its 125th year in business.
Robert was on the Board of Directors of Navios Maritime Partners LP from 2007 until 2018 (NYSE: NMM) and Chairman of the Board of Directors of the Hellenic-American Chamber of Commerce from 2011 until 2013. He is also a board member of the Association of Ship Brokers and Agents (USA) Inc. His family were part of the founding shareholders group of Seacor Holdings, Inc (NYSE: CKOR).
Based in Florida since 2018, Robert now spends most of his time working with banks raising money for both shipowners and other cargo interest, but still works around 15% of the time in SnP.
Shipping was what we grew up with and a vocation ingrained in us. In early 1979, at the age of 20, I had to pass an interview with my Great Uncle before I was given a job. My cousin, partner and the company’s President Chris Pierot had somehow also passed a similar trial by fire a few years earlier. As part of our training each of us was shipped off to Europe to gain experience working for other ship brokerage firms. Chris spent time in Spain with a smaller ship brokerage arm of a ship owner and agency, followed by over half a year in London training with E.A. Gibson. I had a similar experience, spending six months at Clarksons, followed by another half year stint with an alternative lender to the shipping industry. Over the last 40 years I’ve worked in the family firm as an S&P broker as well as in Chartering and Offshore, although today I focus on structuring financial transactions and asset programs both in the U.S. and internationally.
Back then (and still to some extent) shipbrokers would look to arrange for such an international trainee experience for a promising prospect (usually but not always involving a Son or Daughter of a family-owned firm). Over the years we ourselves have taken in quite a few trainees not only from overseas broking firms but from ship owners as well and, almost without exception, this has proven to be a very worthwhile exercise for all concerned. Over our long history some have remained well past their original “expiration date” and have joined our company, even to become a director in our firm. The most recent is Kleon Diamantopoulos, who not only developed into a top-notch broker and a trusted member of our firm, but became an extended member of our families.
Back in 1894 Jacques Pierot, who had been working as a shipbroker, started his own office in Rotterdam. He developed close contacts with his clients and many became his friends and confidents. Over the next 40 plus years the firm did well until Jacques retired in the 1930s, leaving the firm in the capable hands of his three sons: Felix, Morris and Jacobus. Following WWII the firm (and the family) relocated to New York City. The maritime industry grew at a rapid pace and the firm prospered right along with it, by virtue especially of foreign owners wanting a presence in the U.S. The third generation, my father Robert and Chris’s father Jacques III eventually took over and strengthened relationships with financial institutions, oil companies, and passenger ship lines as well as with the new generation of shipping entrepreneurs starting up. Tradewinds have published a couple of articles on the history of our company, the first going back to 1993, and then the more recent “The House that Jacq Built” from 2019, both of which we have links to on our site.
As the fourth generation Chris and I have been pleased to welcome my own son George into the family business. In his late teens and twenties George has had multiple experiences related to maritime working short term traineeships with shipbrokers (Clarksons again) and boutique shipping investment banks followed by a full time position that he held for four and a half years at CIT in their shipping group on completion of his Masters in Shipping, Trade and Finance at Cass in London. One of Chris’s sons, Eric, is also in the industry and holds a position in chartering for a Major Grain house. We are extremely proud of both of them! They are hard-working, tenacious and well on the road to great success.
Initially, in the late 1970’s, we were one of the first ship brokerage companies to develop a customized computer based data and communications software using IBM software and mini-mainframe technology. We implemented and used the customized solution for approximately a decade before moving to the then recently developed Strategic Software Platform for shipbrokers due to the high cost of maintenance and upgrades of the IBM platform. In 2009, the company switched to a new, cost effective and robust system integrated especially for shipbrokers developed by Compass using a Microsoft Windows platform. Compass convinced us of its ongoing development plans and of their being able to meet all our requirements in a timely manner.
We determined we had to take advantage of the better integration of the Windows based platform, the latest technology at the time and of what we felt would be better value for the money.
We liked the thought of switching to a younger team that had a better understanding of shipbroking needs with a willingness to listen to new ideas and a software development philosophy that sought to reduce the cost of running a ship brokerage firm.
We moved in September 2009 and I must say the switch went very well. The Compass team members flew to New York to install the new system, remained here for the initial training period and helped individualizing screen layout for each particular broker’s responsibilities and work style.
If there were any challenges at all, they were all positive. In working with the Compass team we were able to develop an understanding of how to interface their system with our standard operating procedures within just a week or two. Over the next few months, as we learned more about the additional features of the software, the Compass team made themselves available remotely to continue the training process and to point out many other features we were initially unaware of that proved very valuable to our way of operating as a company and individually.
As new software and applications have been developed in the general software market over time, Compass has been there to integrate these applications as “add-ons” to its platform and product offerings.
Firstly, the fact that we can immediately find every single email going back many years, gives us an edge. Secondly, everything in Compass is comprehensively integrated making it very simple for us to deep search for something and then see all elements linked to it such as ships, contacts, deals, keywords or projects. This gives us the insight we need to make decisions. Thirdly, your mobile app is unlike anything we’ve seen. The fact that every email in our database, contact, circular list, ship or folder is readily available means we’re able to do virtually all of our work wherever we happen to be.
Essentially, we believe the most challenging aspect for all ship brokerages (as well as any company, for that matter) in the current environment is trying to see to it that our families and staff stay healthy to the extent we have any control. So far two of our staff members have suffered through and recovered from the Virus.
Unfortunately, among close friends and extended family, many of us have lost someone we dearly cared about. In terms of the prevailing business environment, we are dealing with a whole new set of logistics where we and all our clients are working remotely. In addition, there are the difficulties of arranging inspections and deliveries in terms of travel restrictions for surveyors and crews, including the threat of quarantines, not to mention the volatility in most market segments.
That being said, we still have been very fortunate to have arranged a number of international transactions for bulk carriers, tankers, offshore support vessels as well as a handful of transactions in our own U.S. market.
As far as our finance arranging business goes, we are coming off a historically exceptional calendar year in 2019 where we were involved in funding or arranging future committed funding for approximately 50 marine assets in the U.S. domestic and international markets. We did not expect 2020 to be as prolific but expect during the first half the results will be around 15 funded vessels.
Since the onset of COVID-19 here in the United States our funding sources have taken a step back from looking at shipping assets to better try to determine the long-term effects of COVID-19 on the world economy. Today, we are getting a sense that our funding sources are starting to ease some of their original fears and will shortly be willing to consider some projects which we hope will translate into workable proposal letters for our marine clients to consider.
However, the landscape around cost of funds has changed and we will have to go through a process with our funding sources and clients on price discovery. We expect for our investment grade clients that the increase of funding cost will not have widened significantly but for our non-investment grade rated credits we do expect a significant widening of spreads which may prove difficult to swallow. We hope and expect that this widening in the cost of funds will ease somewhat over the coming months, but have no idea where this will settle.
To answer your question as to how the COVID-19 virus will affect the shipbroking industry, I would like to refer you to one of my favorite quotes which I consider the foundation of the principles under which Pierot has operated since its inception, which is: “The more things change, the more they stay the same”. I think that beyond our basic tenet as ship brokers (“Our Word is our Bond”), this quote best reflects our philosophy toward our business practice through all the ups and downs of the shipping markets over the past 125 years.
As a firm, we have always been at the ready to assist and support our clients with opportunities as they present themselves and with what we like to think is sound advice (when asked for it…), always to the best of our abilities, no matter the circumstances, be it World Wars, stock market collapses, political unrest, great economic expansions -and contractions-, the inevitable Boom & Bust cycles and Yes, even during pandemics (1918 and expectedly 2020). We manage to find certain vantage points that afford us a view of the situation as a whole and then come up with solutions to facilitate the continuance of our practice and the offering of our services.
Jacq. Pierot Jr.& Sons is one of the oldest shipbroking firms, still managed by family of the founder, with offices on East 45th Street New York, it specialises in SnP and Newbuilding. The firm also has a significant presence in vessel financing, with extensive contacts throughout the conventional marine lending sector as well as amongst those capital providers considered to be non-traditional. They are also one of the industry’s leading appraisers of vessels, being retained by owners, foreign and domestic government agencies, banks, leasing and insurance companies.