Abstract
Research has illustrated the cyclic nature of shipping, which concentrates on bulk transportation. The previous long-term down cycle was caused by stagnation of world economies in the 1970s, which resulted in a very low growth during early 1980s. Change was visible in order book behavior, and shipping yards were forced to operate in a new situation, where booms were very conservative and declines always followed order spikes. It took more than two decades for that situation to change when South East Asia demanded more coal and oil to fuel its economic growth. While orders spiked to unusually high levels, the sudden credit crunch in 2009 halted the growth. After this, shipping companies have struggled to find new growth path in bulk shipping. This has been extremely difficult in an environment where freight rates in spot markets have considerably declined. It is not surprising that stock market valuations of the bulk sector companies have collapsed, even for Maersk (the largest container operator in the world). There surely exists a future for bulk shipping, but great structural problem is about to hinder growth, and profits in the years to come.
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Lun, Y.H.V., Hilmola, OP., Goulielmos, A.M., Lai, Kh., Cheng, T.C.E. (2013). Shoot and Collapse of Dry and Liquid Transportation Markets: The Credit Crunch Effect. In: Oil Transport Management. Shipping and Transport Logistics. Springer, London. https://doi.org/10.1007/978-1-4471-2921-9_1
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DOI: https://doi.org/10.1007/978-1-4471-2921-9_1
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