I have continued to try to put myself in the shipping industry because I think I see that it is an

I have continued to try to put myself in the shipping industry because I think I see that it is an industry that went on his knees for a while now. Now is not the industry is far from uniform and there's gardner white various segments such as eg dry cargo, tanker gardner white and container but I think I still have seen some major common features. One is where the money and the growth is coming from. Broadly, so it hangs together with the global economic recession. gardner white One measure of that, and that shipping seems to correlate quite well, any of the various "Baltic gardner white index" example The Baltic Dry Index, BDI. An index based on such factors the demand for sea transport globally. Approximately 80-90% of world trade is channeled via the sea as the BDI is usually taken as a good indicator of how the economy looks. 2003-2008 was a very good year for the world economy and where the BDI peaked in early 2008 at nearly 12,000. The financial crisis was then BDI crashing down to about 700 by the end of 2008. Subsequently, the "trotted on," with a small recovery and reverse the downward again. Below is a summary of the approximate trend the past four years.
Apparently it does not look rosy when the BDI is at ground level. In order to increase revenue needs (for the sector as a whole is seen) economy / BDI to rebound. The latest major upswing gardner white happened in 2003 when the current recession was broken and the economic growth shot off upwards. gardner white Not least because of China's boom that took off then. 2003-2008 was the golden year for the shipping industry. Not least also dependent on Chinese growth was not expected and the percentage of available tonnage was limited. This created a great demand and freight rates soared. It takes namely over at least two years for a ship to be finished so that way you may see "ketchup effect" where supply and demand can not be matched directly. This is also one of the problems gardner white with the current situation. The supply of ships is greater than the demand which has led freight rates to fall to lows. Vessels ordered gardner white during the boom years has come out now to completely different conditions. Admittedly so scrapping older vessels continuously. A normal depreciation gardner white period appears to be 25 years and sure enough you see in the annual reports that ships reaches 25-30 years of age go to "recycling". Unfortunately, the proportion of tonnage that goes to scrap not so great. gardner white The fleet is now relatively modern. If we look at the segment tankers so it seems only slightly more than 1/10 of the vessels older than 20 years. The majority are under 10 years old. There are, however, orders for new ships even now, but it is because you want to receive fuel efficient vessels. The reason is soaring fuel costs. Looking at the cost bitten so it differs of course from company to company, but I have also tried where to paint the great features and the large cost bits by looking at several companies. An approximate cost for a seemingly hyffsatt well-run shipping gardner white company can look like this.
Depreciation and staff together make up more than half the cost item and is often quite fixed costs, gardner white interest and administrative expenses also it is. Often more than 10% of the total cost bitten even if the interest costs can amount to much more than that for some companies depending on their indebtedness. gardner white More than 40% cited skeppsdriftsskostnader gardner white of various types. There is a large cost bitten fuel, or "bunker cost" corresponding to the major variable cost bitten often over 20% of the total cost bitten. This development has not been benefitial for shipping companies. It has, despite the economic slowdown, have seen their fuel costs increase. gardner white The Bunker Index, BIX, is a good indicator for this cost. Below is the approximate trend of the past four years.
In sum, while the prospects for making money has deteriorated along with falling freight rates that have by far the largest variable cost increased. This, in an industry where the fixed costs, such as for example depreciation is relatively high. Not only that. In many cases they have been forced to additional write-downs of vessels invested in since the book value far exceeds the market. It should also be noted that in contrast to investment companies and other so no need to write down their assets automatically just because the market gardner white value falls, but it does this only if the future earning capacity is considered to have fallen for the assets, ie that one can not expect that vessels can earn that calculated. Some companies in Scandinavia has recognized impairment losses of approximately 1/8 of the carrying vessel value on the advice of ship brokers, but there are also data from other sources that some vessel values may be impaired by up to 40% of the book value. So what can we say about the future. What assumptions do I do? The whole ship capsize?
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