Review article
THE IMPACT OF GLOBAL ECONOMIC CRISIS ON THE DRY BULK SHIPPING INDUSTRY
Milojka Počuča
; University of Ljubljana, Faculty of Maritime Studies and Transportation
Marina Zanne
; University of Ljubljana, Faculty of Maritime Studies and Transportation
Abstract
Present global economic crisis had a strong impact on the maritime market. A drastic decline of freight rates and time charter rates was almost immediately visible in the tramp shipping segment. Irrespectively of the fact that global crisis caused fuel prices to drop as well, many shipping companies found themselves in a very unenviable position, struggling to cover their costs.
The authors have analysed the breakeven point for the dry bulk Handymax ship given in the time charter as well as a breakeven point for the same size ship engaged in grain transport from the US Gulf towards Japan. The results demonstrate that in time of crisis the breakeven point in time chartering is achieved by 15 years old Handymax ship that has never changed the owner. In other circumstances the operating results would be different, probably ending up in a loss. Freight rates in the analysed voyage charter, although significantly lower than before the crisis, still permitted the owner to operate with profit. Recent recovery, both in the freight rates as well as in the time charter rates, gives hope for the shipping industry as a whole.
Keywords
maritime market crisis; breakeven point calculation; time charter; voyage charter; seaborne grain transport
Hrčak ID:
45458
URI
Publication date:
23.12.2009.
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