Consolidation, greater focus on risk management and higher finance costs:
BIMCO’s new analysis on the wider impact of the dry bulk crisis
BIMCO has today published the next in its series of reports looking at the “road to recovery” for dry bulk shipping beyond the current market difficulties. The foundation for the new report follows the conclusion of BIMCO’s previous analysis – that due to the severity of the current crisis the sector can only return to profitability in 2019 if shipowners deliver “zero supply side growth”, year on year.
BIMCO’s latest report models the wider impact of the crisis – the effect of which reaches beyond dry bulk to other major sectors of shipping such as tankers and containers. It concludes that major changes are on the horizon.
The key findings of the report include:
consolidation and risk management will be the new industry model for dry bulk shipowners – with parallel effects in other sectors:
shipbrokers will need to provide a broader range of services:
Basel will create scarcity and/or drive up the cost of finance for shipping
shipyards – though somewhat sheltered – will have to diversify
BIMCO President Philippe Louis-Dreyfus said:
“This report gives the industry much-needed analysis on the wider impact of the current severe – and enduring – shipping crisis.”
“This crisis will affect shipping companies, not only economically and financially, but also sociologically. We will see deep changes in the fundamental structure of the shipping world and in shipping companies, mainly the smaller ones. A new business model will emerge, not just for shipowners but also for brokers, shipyards, financial institutions and other stakeholders.”
“I believe this report is very important and I would encourage shipowners to read it and reconsider their own business model – not just to survive the downturn but also so that they can contribute to the road to recovery.”
Source: BIMCO / Peter SandPrevious Next