Shipping musings

Investment Analysis Clubs Macro Economic Trends and Risks
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Over the last 10 days, my top three shipping picks have reported their Q1 2022 results. Star Bulk (SBLK) reported this past week, while Zim Integrated (ZIM) and Golden Ocean (GOGL) reported the prior week.
Some general comments prior to delving into macro from SBLK.

  1. SBLK up +37.7% YTD with a very nice dividend to boot
  2. ZIM up 19.86% YTD with a massive roll-up dividend paid earlier this year (a huge $17/sh div on a stock trading around $72 at the time)
  3. GOGL up 61.73% YTD with a very nice dividend to boot. Been harvesting gains recently, but it remains my largest shipping stake :slight_smile:

Okay, onto the macro. Star Bulk (SBLK) is a dry bulk shipper with a large dry bulk fleet of 127 vessels that include large (Newcastle and Cape vessels) and medium (Supramax, Ultramax, and Panamax vessels). From SBLK’s presentation materials-
A. SBLK is part of a consortium that is looking into a Green Corridor (Slide 10)
B. Fleet balance: Demolition and orderbook stats (Slide 11)
C. Port congestion and slow steaming. SBLK mention fuel costs and “inefficiencies” (what dis??) as the reason for slow steaming (Slide 11)

https://static.seekingalpha.com/uploads/sa_presentations/71/…

Is slow steaming a preview of the future shipping market? Slower sailing speed is the primary option being suggested for older vessels when new environmental targets go into effect in 2023

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Not surprising results as the price per container in both the Atlantic and Pacific corridors has increased 10x.

Not really sure what is driving this much increase in the cost of shipping.

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Not surprising results as the price per container in both the Atlantic and Pacific corridors has increased 10x.

Not really sure what is driving this much increase in the cost of shipping.

If we are talking container shipping, that applies primarily to ZIM. SBLK and GOGL are shipping dry bulk
(primarily). I say “primarily” only because container and container shipping has had challenges that has lead to some businesses to look to dry bulk vessels as a workaround. Again, not all dry bulk vessels are utilized for the workaround, primarily the smaller vessels. What happens is some product that would normally be shipped in a container gets re-packaged in such a way that it could be shipped via a dry bulk vessel. Again, not any dry bulk vessel. I would venture to guess the smaller vessels are better suited because of hold design and the on-board cranes

In the OP, I was being slightly facetious with “inefficiencies” (what dis??) . Any delay outside the control of the shipping company could be deemed an inefficiency - delay in docking, delay in unloading, insufficient resources at a port, delays in loading, port closure (as in Shanghai recently) etc.