100% accurate. I work for a broker/freight forwarder. The rates and space on the market are HORRIBLE. You combine that with the unprecedented surge of imports causing port slowdowns across the country and this industry is a money pit right now. My customers are paying premium rates for 60-90 day transit times that should be 30 days.
Don’t even get me started on air freight. It used to be maybe $2-$3 per kg. We’re lucky if we find under $7 per kg now. Normally it’s even higher – $8/$9.
Edit: wow guys. I’m flattered to get so many up votes. Thank you!
You have to distinguish between shipowner companies (ATCO, DAC, NMCI, CTMR, MPCC) and liners (ZIM, Maersk, Haqag-Lloyd etc). The latter charter ships from the former. Mostly long contracts for 12 months to years. When rates boom like now, these re-charters lock in huge profits for a long time ahead for the shipowners. So DAC, NMCI, ATCO are relatively low risk. Especially when the new build order book is tiny and there will be less capacity in a demand growth cycle.
First of all, I know almost nothing about shipping, so apologize my ignorance on this.
I am looking at DAC, DSX and CTRM, just a quick glance, at all the while DAC has YoY increase of 600% and (pun intended) it seems that ship has certainly sailed on this one, even more so the short interest adds another layer of uncertainty into the valuation formula for me.
On the other hand, DSX and CTRM have both pulled back significantly through last few months, DSX is still up YoY by ~40%, CTRM is actually slightly down YoY.
All of this is quite conflicting a bit for me, 1 out of 3 is certainly in bubble territory seemingly, on the other hand, in the short term, other 2 might see reasonable bounce back up in short term at least, specially until container boom continues and will perhaps reflect in their Q1 results at the very least. Tricky situation at first glance. If i had to guess, i would say those entering now are already too late. Perhaps somewhat similar situation to last spring with oil storage situation.
Several large shipping countries scrapped their older ships early in 2020. High demand for steel from China combined with no demand for international shipping while factories were closed and consumer spending slowed down meant it was unprofitable to keep ships running.
I imagine with things opening back up, demand for shipping has increased while the supply of ships has decreased.
I think jumping into international shipping companies might be a mistake unless you are very knowledgeable about the industry. A better option would be to invest in ship builders. As the old scrapped ships will be replaced by new modern ships.
so I am not an investor in this space… just a general comment on what i was seeing. Was out in Huntington Beach CA recently… grew up in that area so know it well. The ocean horizon is filled with GIANT container ships waiting to be unloaded in long beach. I have never seen anything like that in all my visits… A lot of crap presumably from those ships washing up on shore… so guessing they are sitting there for a while. I know nothing about shipping to invest in those stocks; however fuel/oil, china index funds… def on my radar.