The shipping industry is hitting a large rough patch recently. Many experts of the shipping industry expect more companies to default. Some companies are also filing for bankruptcy. China's shipbuilding companies have fallen 50% in the past year. We should not expect things to get better within the next few years either.
I would not recommend in investing in the shipbuilding companies just because many of the smaller ship building companies are shutting down because they are filing for bankruptcy and the larger ones wont buy their shipyards because the smaller companies dont have the much more to offer anymore. One reason the shipping industry is doing bad is because the fuel prices have risen and trade has slumped amongst countries too. The article makes it sound like the industry may not recover for a while and investors could lose lots of money. Also, transporting goods through ships seems to be dying almost because the amount of ship building companies are decreasing fast.
http://online.wsj.com/article/BT-CO-20120302-703787.html?mod=WSJ_Transportation_middleHeadlines
Interesting, as China continues on a path of explosive growth, its shipping sector is faltering...
ReplyDeleteThe idea that "transporting goods through ships seems to be dying" is definitely an overstatement. The only way to transport goods from China to the U.S or from Europe to the U.S, or across long distances with natural barriers (such as mountains and valleys) is via a ship. While the shipbuilding in China may be dying, the industry in South Korea is growing. Greater efficiency in South Korea has lead to a loss in market share in countries like China, Denmark, and others.
ReplyDeleteWith U.S. imports still high in numbers, what's causing the fall?
ReplyDelete