Skip to comments.A third of shipping lines face bankruptcy
Posted on 03/25/2009 6:12:29 PM PDT by Vince Ferrer
Experts in the Far East have suggested that more than one third of the current number of shipping companies may go bankrupt in 2009, because of the global economic downturn. Since the beginning of the crisis last September, at least four companies, hit by a combination of falling rates and a global capacity glut, have had to seek bankruptcy protection in order to keep trading. Exacerbating the situation is China's diminishing need for iron ore imports.
Analysts suggest that shipping lines will respond by scrapping almost one third of active vessels over the next 24 months. Shipping lines trying to offload vessels to reduce the size of their fleets are finding no buyers, causing prices to tumble. Although the stimulus packages announced by the US and China may help to revive demand, this may not come fast enough to save many marginal operators. Bulk operators are suffering worst of all. The Baltic Dry Index crashed 92% last year as the result of a cut back in production in China. However, it has subsequently doubled this year, but, at the time of writing, was still around 70% lower than a year ago. With banks reluctant to give credit to all but the most financially sound companies, shipping lines will struggle to survive in the immediate future.
>> Shipping lines trying to offload vessels to reduce the size of their fleets are finding no buyers, causing prices to tumble.
Wonder if those things make good yachts. Might work OK for a redneck like me.
Only for the Chinese. Few, if any, of those ships sail under American flag. Few are owned by American companies, very few, if any, are built here.
>> Few, if any, of those ships sail under American flag. Few are owned by American companies, very few, if any, are built here.
Are you SURE that’s enough to keep Barack ben Geithner from bailing ‘em out?
Step 1. Arm yourself (always step 1).
Step 2. Buy container ship.
Step 3. Anchor it just in international waters off LA/NYC/SF/Miami/Houston.
Step 4. Arrange connectivity and power.
Step 5. Rent out empty storage containers.
Step 6. Franchise fishing boats as sea taxis.
Step 7. Profit.
I think both Chinese and Korean governments have been approached by companies, but also I think its the shipbuilders that got in line first.
No kidding, it’s not like our previous bailout bucks have had any problem finding their way out of the country. I could see China making the demand.
The companies that will really disappear, because their business model has the least flexibility, is the ship leasing companies. They own ships, but only to lease them to other carriers who ship cargo. The carriers are letting the leases expire, and sending the ships back to their owners, in order to reduce their own capacity. It is easier to survive as a carrier with reduced capacity than a owner who can’t lease out the ships, and has no customers of their own.
How about pirate bait?
Well, the good news is that landfills won’t be buried under the crap they would have been carrying.
Boo frikkin’ hoo, less chinese crap coming into our country. Ok, I’m an idiot, not an economist.
Keep it anchored at some luxurious island location and use it as a floating hotel.
Come on, we can solve the crisis with a little Yankee know how!
The market is clearing. Innovate away at these low prices.
(Sorry for the Yankee reference. I suppose Rebel know how might work as well.) ;-]
Yes they may go bankrupt, but in the next few years container ships with a carrying capacity of 15,000 TEU’s will be completed.
Plans are being made to produce container ships by 2020 that will carry 20,000 TEU’s. (TEU-twenty foot equivalent containers).
Y'all come on down... we got yer Rebel Boat-Buildin' Know-how right here!