2018 was Indeed a Forgettable Year for Shipping. Is There More to It?

So far in 2018, the shipping freight markets have been proven uninspiring; current freight indices produced by the Baltic Exchange, the Shanghai Shipping Exchange and other data providers are comparable to year-old levels, give or take some “normal”volatility; and, it’s well known that shipping is capable of much more than “normal”volatility.

Product tankers specifically, and tankers in general, seem to be the disappointment of the year in terms of freight – but still, as of late, crude tankers have managed a fair recovery on the back of OPEC strong production performance and changing trade patterns for crude oil. The dry bulk market have mostly been having a respectable year with profitable cashflows, with the exception of a recent dive in the capesize freight market. The containership market had been fair in the early part of the year, especially for feeder and feedermax tonnage, although, recently. only trans-Pacific freight rates seem robust as shippers are trying to front-load their cargoes to the USA in expectation of heightened tariffs in the new year.And, the offshore market, after several years of tranquility reflecting an almost dead market, in 2018 has shown signs of hope as offshore drilling projects(very) selectively having been coming back to line.

The following chart from the Baltic Exchange, to which we are a member, depicts the BalticExchange freight indices for the drybulk market (BDI), and separately for the capesize market (BCI), its most important and also most volatile component;  also, the Baltic Exchange freight indices for crude(BDTI) and clean tankers (BCTI) are shown in the same graph. In order to provide more perspective, the graph incorporates both 2017 and 2018 y-t-d, showing that 2018 has been marginally better than the year before, at least for drybulk and tankers, seasonal volatility notwithstanding.

Likewise for the containership market with the Shanghai Containerized Freight Index (SCFI):

All in all, on average, freight rates for most shipping assets were hovering around cash breakeven levels for most of 2018. Operating profits have been uninspiring, mostly, for the profitable sectors, while operating losses were too small to trigger fresh bankruptcies in unprofitable sectors.  Most of the shipping bankruptcies in 2018 were of “legacy assets” emanating – hard to believe – from the go-go days of the last decade. A couple more of shipping bankruptcies in 2018 were triggered from other factors such as accounting fraud– including one in the fishing industry to which we have acted as LiquidationTrustee by order of the High Court of the Republic of the Marshall Islands.

In a post from almost a year ago, we had argued that an uninspiring shipping market in 2018was the best thing the industry could have hoped for. Not that we objected to outsized profits in the shipping industry, or wished ill for those that had a “long position” in shipping. We just thought that there were too many ships on the water for the cargoes available to be shipped, and, also, we did not see a great deal of growth for those cargoes. Our position for a forgettable year, truth be told, also incorporated some wishful thinking, that an uninspiring market would prevent the players in the market from fresh excesses, such as fresh waves of newbuilding vessels, more and cheaper capital in the industry, and so forth. We are pleased that our “prediction” for a forgettable market has been proven true, and we apologize for the betrayed dreams and hopes for a much stronger recovery for the shipping industry in 2018.

A forgettable year in 2018, as a “downer” as it has been for the shipping industry, it also has, at the very least, led to a) the slowest pace of newbuilding orders in almost every asset class, b) a low outstanding orderbook for many types of vessels, and the lowest for some in recent memory, c) few new capital coming to the market to ignite d) speculation and speculative transactions. There seems to be some “normalcy”in the market and a return to the basics, of supply and demand and the following of the trade and cargoes.

As shipping freight markets are concerned, probably 2019 will not be much different than 2018. But again, there are many “drivers” and “catalysts” that can make for an exciting year in shipping in the new year in other areas than shipping.

And, holding our second shipping conference in Athens on January 24th, 2019, we will aim to deliver, once again, profound insight from the Captains of the industry, literally and metaphorically, for the things to come in the near future!

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Karatzas Marine and Slide2Open to Host 2nd Shipping Finance Conference in Athens on January 24th, 2019

Building upon the successful inaugural conference held in February 2018 at the Intercontinental Hotel in Athens, Greece, Karatzas Marine Advisors & Co and Slide2Open are thrilled to announce that next year’s conference will be held on January 24, 2019. Save the date!

An expanded agenda on shipping finance, new environmental regulations, innovation and disruption, but also analysis of international trade and geo-politics, and an alignment of  speakers and thought leaders of the highest caliber in their fields, are guaranteed to render this conference a “must attend” event.

For more information, please feel free to contact us by email at:   info[at] bmkaratzas[dot]com or at info[at]Slide2open[dot]net or make sure to follow our blog for regular updates, or follow the conference website at Slide2Open Shipping Finance 2019!

© 2013 – present Basil M Karatzas & Karatzas Marine Advisors & Co.  All Rights Reserved.

IMPORTANT DISCLAIMER:  Access to this blog signifies the reader’s irrevocable acceptance of this disclaimer. No part of this blog can be reproduced by any means and under any circumstances, whatsoever, in whole or in part, without proper attribution or the consent of the copyright and trademark holders of this website. Whilst every effort has been made to ensure that information here within has been received from sources believed to be reliable and such information is believed to be accurate at the time of publishing, no warranties or assurances whatsoever are made in reference to accuracy or completeness of said information, and no liability whatsoever will be accepted for taking or failing to take any action upon any information contained in any part of this website.  Thank you for the consideration.

Karatzas Marine Advisors & Co. to Host Shipping Finance Conference in Athens, Greece

Karatzas Marine Advisors & Co Proudly Hosts the Shipping Finance Conference 2018 in Athens, Greece, on February 22nd,  in co-operation with Slide2Open and Boussias Communications.

Please join a group of high caliber speakers and thought leaders in the maritime industry discussing the current state of the shipping industry, the challenges and opportunities looking forward, in presentations, panel discussions and Q&A sessions in modules ranging from shipping finance and investment opportunities to disruptive technologies and e-commerce in shipping and related industries. This will the first conference in this agenda-setting must-attend series of events on shipping and shipping finance to  be hosted by Karatzas Marine Advisors & Co and their business associates.

We are looking forward seeing you in Athens on February 22nd, 2018!


© 2013 – present Basil M Karatzas & Karatzas Marine Advisors & Co.  All Rights Reserved.

IMPORTANT DISCLAIMER:  Access to this blog signifies the reader’s irrevocable acceptance of this disclaimer. No part of this blog can be reproduced by any means and under any circumstances, whatsoever, in whole or in part, without proper attribution or the consent of the copyright and trademark holders of this website. Whilst every effort has been made to ensure that information here within has been received from sources believed to be reliable and such information is believed to be accurate at the time of publishing, no warranties or assurances whatsoever are made in reference to accuracy or completeness of said information, and no liability whatsoever will be accepted for taking or failing to take any action upon any information contained in any part of this website.  Thank you for the consideration.

Topical Insight and Current Developments in the Maritime Industry

Basil M Karatzas and Karatzas Marine Advisors Quoted in the News

We are delighted that Karatzas Marine Advisors & Co. and its founder Basil M. Karatzas have been the trusted and insightful source of market knowledge and intelligence for all things maritime; with prompt and accurate access to market information, a vast network of resources and paramount access to senior executives worldwide, in the shipping and complimentary industries, the company and its founding partner have had a front row seat to today’s developments in the maritime industry.

We always thought that we have had a strong advantage over the competition and nothing gives us higher pleasure than seeing our expertise appreciated beyond a constant deal-flow and boardroom discussions with our clients, and in the pages and the trust of the international business press.

Recent media quotations for Basil M Karatzas & Karatzas Marine Advisors:

Need help to buy a ship or jet? Credit Suisse looks to lure super-rich            (Reuters, November 6th, 2017)
This Reuters article explores Credit Suisse’s unique approach to shipping whereby only the top and wealthiest names in shipping that are worth of the bank’s prestigious private wealth management service can still obtain loans for commercial ships or a yacht or a jet… Smaller shipping clients of the bank, whether performing or not with their loans, are “encouraged” to take their business elsewhere.

Investment opportunities in shipping could perhaps be the best in over 30 years’ (Splash 24/7, October 17th, 2017)
“The prospects for dry-bulk have not looked so promising in some time now,” Basil Karatzas, a Splash columnist, said. However, Basil Karatzas qualified the statement by adding that “Hopefully the improved prospects for the market will not be another excuse to kill the market in the bud.”

How protectionism sank America’s entire merchant fleet                                            (The Economist, October 5th, 2017)
This year’s hurricane season and Puerto Rico’s predicament brought to the surface the politics and economics of the Jones Act market. Without necessarily taking a position on the matter, Basil Karatzas is quoted in the ever insightful and prestigious The Economist.

Shipping may gain from Mexico grain pain                                                                    (Lloyd’s List, September 22nd, 2017)
Anti-globalization talk is not always bad for shipping; counter-intuitive, but true. Just look at Mexico’s grain imports.

Shipowners Rejoice Over Rising Demand for Commodities                                      (The Wall Street Journal, September 22nd, 2017)
2017 has been good for the dry-bulk shipping industry. Not an exceptional year and actually the threshold was too low given the abysmal market in 2016. However, on the strength of commodities trading and importation, dry-bulk vessels, especially capesize vessels, have seen the market to quintuple.

Global Shipping Trends: China Cosco Buys Orient Overseas                                      (The Diplomat, August 16th, 2017).
An interview with Dr Mercy A Kuo and the esteemed publication The Diplomat, an international affairs magazine for the Asia Pacific.

China underlines shipping ambitions with $6.3bn takeover of HK group                (Financial Times, July 9th, 2017)
Commenting in the Financial Times on state-owned Cosco acquisition of Orient Overseas International (OOIL) in Hong Kong

China’s Cosco to Buy Shipping Rival Orient Overseas for $6.3 Billion                        (The Wall Street Journal, July 9th, 2017)
Commenting in The Wall Street Journal on state-owned Cosco acquisition of Orient Overseas International (OOIL) in Hong Kong

Trying to see through the fog…even from the shore, the sea can look overwhelming… but always a charmer and a generous giver to those who dare… Cape Cod, MA, USA Image credit: Karatzas Images

© 2013 – present Basil M Karatzas & Karatzas Marine Advisors & Co.  All Rights Reserved.

IMPORTANT DISCLAIMER:  Access to this blog signifies the reader’s irrevocable acceptance of this disclaimer. No part of this blog can be reproduced by any means and under any circumstances, whatsoever, in whole or in part, without proper attribution or the consent of the copyright and trademark holders of this website. Whilst every effort has been made to ensure that information here within has been received from sources believed to be reliable and such information is believed to be accurate at the time of publishing, no warranties or assurances whatsoever are made in reference to accuracy or completeness of said information, and no liability whatsoever will be accepted for taking or failing to take any action upon any information contained in any part of this website.  Thank you for the consideration.

Basil Karatzas to Speak at Caymans Shipping Conference

We are delighted to confirm just ten days before the event, due to outstanding business obligations, that Basil Karatzas will be presenting that the 5th Cayman Islands Shipping and Yachting Summit hosted by Mare Forum on May 1st, 2017. The conference is held during The Cayman Maritime Week in George Town, Grand Cayman, Cayman Islands. The presentation by Basil Karatzas is expected to cover the expected implications on the shipping and maritime industries by the Trump Administration.

Part of working in the shipping industry! No complaints! Image credit: Karatzas Images

© 2013 – present Basil M Karatzas & Karatzas Marine Advisors & Co.  All Rights Reserved.

IMPORTANT DISCLAIMER:  Access to this blog signifies the reader’s irrevocable acceptance of this disclaimer. No part of this blog can be reproduced by any means and under any circumstances, whatsoever, in whole or in part, without proper attribution or the consent of the copyright and trademark holders of this website. Whilst every effort has been made to ensure that information here within has been received from sources believed to be reliable and such information is believed to be accurate at the time of publishing, no warranties or assurances whatsoever are made in reference to accuracy or completeness of said information, and no liability whatsoever will be accepted for taking or failing to take any action upon any information contained in any part of this website.  Thank you for the consideration.

Basil M Karatzas and Karatzas Marine Advisors Quoted in the News

We are delighted that Karatzas Marine Advisors & Co., and its founder Basil M Karatzas have become the contact to have for shipping market expertise; with prompt access to market information and a vast network and access to senior executives worldwide, in the shipping industry and several complimentary industries, the company has had a front row seat to today’s developments in the maritime industry and has been enjoying an active deal-flow and the trust of many in the shipping industry.

Five shipping and logistics influencers you should follow (Veconinter, March 13th, 2017)                                                                                                                            Basil Karatzas was named one of the shipping industry’s influencers by Veconinter, a Venezuela-based logistics company; tweets on shipping, and everything about it, by Basil Karatzas can be followed at @KaratzasMarine and @BasilKaratzas

Πήρε «φωτιά» η αγορά πλοίων μεσαίου τύπου για ξηρό φορτίο (Ναυτεμπορικἠ, March 14th, 2017)

ZIM Shipping Names New CEO in Face of Possible Sale (The Wall Street Journal, March 10th, 2017)

Gibraltar Shipping Interview: Basil Karatzas Talks Alternative Bunkers, S&P Markets, Vessel Financing, and Trump by Gibraltar Shipping (March 10th, 2016)

Ναυπηγήσεις – διαλύσεις, διπλή πρόκληση για τα bulk carriers (Ναυτεμπορικἠ, March 6th, 2017)

Still at sea Shipping’s blues: The many barriers to scrapping cargo ships (The Economist, March 2nd, 2017)

Σε «bad bank» το 5% του παγκόσμιου στόλου των containerships (Ναυτεμπορικἠ, February 15th, 2017)

Sinking Feeling: Shipping Is Latest European Banking Worry (The Wall Street Journal, February 10th, 2017)

From the crossroads to the world… Image credit: Karatzas Images

© 2013 – present Basil M Karatzas & Karatzas Marine Advisors & Co.  All Rights Reserved.

IMPORTANT DISCLAIMER:  Access to this blog signifies the reader’s irrevocable acceptance of this disclaimer. No part of this blog can be reproduced by any means and under any circumstances, whatsoever, in whole or in part, without proper attribution or the consent of the copyright and trademark holders of this website. Whilst every effort has been made to ensure that information here within has been received from sources believed to be reliable and such information is believed to be accurate at the time of publishing, no warranties or assurances whatsoever are made in reference to accuracy or completeness of said information, and no liability whatsoever will be accepted for taking or failing to take any action upon any information contained in any part of this website.  Thank you for the consideration.

2017 03MAR07 N Ναυπηγησεις-διαλυσεις, διπλη προκληση για τα bulker carriers

Basil M Karatzas and Karatzas Marine Advisors Quoted in the News

The shipping industry has been maintaining a very active profile in the mainstream international business press. Major bankruptcies, reorganizations, merges, vessel arrests and auctions are daily routine these days. Shipping banks, shipping loans actively and non performing loans (NPL) along with provisions are of concern or interest to many.  And, the  freight market that keeps surprising in terms of volatility.

We are delighted that Karatzas Marine Advisors & Co., and its founder Basil M Karatzas have become the contact to have for shipping market expertise; with prompt access to market information and a vast network and access to senior executives worldwide, in the shipping industry and several complimentary industries, the company has had a front row seat to today’s developments in the maritime industry and has been enjoying an active deal-flow and the trust of many in the shipping industry.

Dry-Bulk Shipping Owners Get Reprieve as Rates Rebound
(Wall Street Journal, November 24, 2016)

What Will Save the Shipping Industry? Eight Industry Thoughts Leaders Weigh In   (LLoyd’s List, November 17, 2016)

Taiwan Approves $1.9 Billion Aid Package to Troubled Shipping Companies
(Wall Street Journal, November 16, 2016)

Varsler shippinghavari (translated as ‘Warning Signs for Shipping’)
Dagens Næringsliv, (November 11, 2016 – In Norwegian)

Τα απόνερα από την εκλογή Τραμπ
(Η Ναυτεμπορικἠ, November 10, 2016 – In Greek)

Israel’s Zim Looking to Sell Most Global Shipping Operations
(Wall Street Journal, November 4, 2016)

Japan’s Largest Shipping Firms to Merge Container Operations
(Wall Street Journal, October 31, 2016)

Offen Group Selling Two MR Tankers
(Lloyd’s List, October 25, 2016)

Pressure on German shipping lenders unlikely to ease
(The Financial Times, September 21, 2016)

Guest Voices: Shipping Banks Face Sinking Prospects as They Postpone Reckoning
(Wall Street Journal, September 19, 2016)

It’s not over – Shipping industry adapting to difficult times
(Wärtsilä, September 12, 2016)

Shipping industry not buoyed by low fuel costs
(The Cayman Islands Journal, June 1, 2016)

mv-king-basil-10-bmk_2987

Aptly named containership vessel MV ‘King Basil’ departing the port of Piraeus. Image credit: Karatzas Images

© 2013 – present Basil M Karatzas & Karatzas Marine Advisors & Co.  All Rights Reserved.

IMPORTANT DISCLAIMER:  Access to this blog signifies the reader’s irrevocable acceptance of this disclaimer. No part of this blog can be reproduced by any means and under any circumstances, whatsoever, in whole or in part, without proper attribution or the consent of the copyright and trademark holders of this website. Whilst every effort has been made to ensure that information here within has been received from sources believed to be reliable and such information is believed to be accurate at the time of publishing, no warranties or assurances whatsoever are made in reference to accuracy or completeness of said information, and no liability whatsoever will be accepted for taking or failing to take any action upon any information contained in any part of this website.  Thank you for the consideration.

2016-11nov10-naftemporiki-%cf%84%ce%b1-%ce%b1%cf%80%ce%bf%ce%bd%ce%b5%cf%81%ce%b1-%ce%b1%cf%80%ce%bf-%cf%84%ce%b7%ce%bd-%ce%b5%ce%ba%ce%bb%ce%bf%ce%b3%ce%b7-%cf%84%cf%81%ce%b1%ce%bc