Executive Briefings

Is Dry Bulk Shipping Headed for a Breakdown?

For those in dry bulk shipping, the market since the beginning of 2014 has been the worst downturn since the mid-eighties. Access to finance and liquidity will likely continue to be a pressing corporate issue for ship owners until the markets recover, and the longer this takes the worse the situation will get.

In the current low-rate and relatively low-volatility environment, margin creation and arbitrage is challenging for commercial operators like charterers. In addition, we are starting to recognize a more tangible and direct consequence of the prolonged dire market on our business: a lag in vessel maintenance and upkeep of the vessels we charter in. Every time a vessel or a piece of machinery is not working to its potential – or not working at all – our ability to manage risk and protect margins is impacted. 

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In the current low-rate and relatively low-volatility environment, margin creation and arbitrage is challenging for commercial operators like charterers. In addition, we are starting to recognize a more tangible and direct consequence of the prolonged dire market on our business: a lag in vessel maintenance and upkeep of the vessels we charter in. Every time a vessel or a piece of machinery is not working to its potential – or not working at all – our ability to manage risk and protect margins is impacted. 

Read Full Article