Spot rates for capesize bulkers took another nice jump on Friday after surpassing $50,000 per day on average for the first time in more than a decade. The capesize 5TC, a spot-rate average weighted across five key routes, gained $986 per day since Thursday to reach $51,099 per day, according to the Baltic Exchange. It has stayed above $50,000 per day since hitting $50,078 per day on Monday and $51,472 per day on Tuesday before cooling off to $50,922 per day on Wednesday.

Supramax spot rates are also keeping up positive momentum that has been steady for more than a month. The supramax 10TC improved $360 per day to reach $38,169 per day on Friday. Jiangsu Ocean Shipping on Tuesday fixed the 58,764-dwt Josco Changzhou (built 2011) on a spot voyage to carry fertilisers from Pakistan to Bangladesh at $48,000 per day. “We have seen positive gains in many regions this week,” Baltic Exchange said in its weekly wrapup on the dry bulk market.

The panamax 5TC fell $332 per day to $34,870 per day, but Far East Horizon still fixed the 82,024-dwt Ocean Time (built 2019) at $34,000 per day for six to nine months from Indonesia. Panamax spot rates had been seeing steady improvement as well, improving 18% since 30 July to $35,202 per day on Thursday.

Handysize spot rates also slipped on Friday after months of steady gains. The handysize 5TC lost $92 per day to come in at $34,152 per day after improving 75% to $31,452 per day on Friday from $17,988 per day on 15 April.

It has been a positive earnings season for bulker owners, but few have trumped analysts’ expectations so decisively as Belships. The ultramax specialist’s $22.5m net result trounced the consensus estimate of $10.5m for the second quarter. Belships also made good on its promise to distribute at least half of that net profit in dividends, with a payout of NOK 0.40 per share for the second quarter. The reinstated quarterly dividend is part of Belships’ growth strategy, chief executive Lars Christian Skarsgard told TradeWinds. “It leaves the other 50% for either increasing the dividend or deleveraging or pursuing growth opportunities, so it returns capital to shareholders while keeping the door open for further growth and other opportunities to chase return on equity,” he said.

“Paying a dividend itself, I think, is really important because you’ve had a decade now with ups and downs in shipping markets — and mostly downs for dry bulk. I think now that there’s a strong market, if you want to have an investor base and you want to have a competitively priced share, you have to pay a dividend.” Belships recorded net profit of $22.5m for the second quarter, equivalent to earnings per share of $0.09, up from a loss of $14.6m in the same period in 2020.

Much of the net result was generated by Lighthouse, Belships’ in-house commercial platform that handles cargo trading. Lighthouse contributed $14.5m of Belships’ second quarter Ebitda of $36m. The Oslo-listed company will pay out NOK 0.40 ($0.045) per share, equal to half of its net result for the three-month period. The last time it paid a dividend to shareholders was in April 2018. “Otherwise, I think there’s way too many companies that either lost money, or they made money, kept it, and reinvested it in ships until they lost the money. So, a lot of investors are kind of impatient with seeing the actual return of capital and not only a prospective return and hoping our share price appreciates, but an actual cash payment.” Skarsgard thinks Belships’ new dividend policy should ultimately increase the firm’s share price relative to net asset value and will create more value for investors. “If you look across the listed dry-bulk companies today, it’s interesting to note that over the last couple of years the companies that have, on average, been priced the highest compared to net asset value, two factors stand out: one is corporate governance and transparency, and the other is dividend policy,” he said.

Analysts have reacted to Belships’ progress with enthusiasm, adjusting their target figures upwards. Norne Securities this week adjusted its target price for Belships to NOK 17 per share, up from NOK 16 previously. Pareto Securities has gone even further and raised its target to NOK 19 per share and Fearnley Securities has said it is working on revising its figures. The stock was trading at around NOK 14.10 on Thursday. Attracting more investors will, in turn, help fund the next stage of Belships’ growth. Belships has acquired 17 bulkers and sold six of its oldest ships over the past couple of years, leveraging Skarsgard’s experience as a sale-and-purchase broker.

During the second quarter, the firm entered into agreements to acquire five new ultramaxes, which the company thinks are especially undervalued right now relative to the current freight market. Belships said in May that average five-year-old ultramaxes were undervalued by as much as 30%, at that time pricing between $20m to $23m, when they should have been at $30m relative to one-year period rates. “Where we find ourselves today is that the market has actually gone from strength to strength, and these five-year-old ultramaxes are now worth $30m,” Skarsgard told TradeWinds. “But the period contracts have increased even further so, right now, I would say that we have a new yardstick to aim for because if this market continues, they should be 15% to 20% higher already. We should pass actually $35m later this fall or before Christmas, if you have the same period market.”

Will the company continue to buy? “If we can continue as we’ve done so far, I certainly hope so,” Skarsgard said. “But we’re concerned about our cash break-even and the balance sheet solidity, so we’re not going to keep piling on ships if it inflates our cash break-even. It has to blend in with the existing ships and not just inflate the cost just because the market is high.” Belships’ cash break-even has remained relatively unchanged throughout all the acquisitions the firm has made over the past two or three years “and it’s actually fallen if you adjust for the fleet quality,” Skarsgard said. Any further acquisitions would have to make sense financially, but he added that Belships is “actively looking at the next move”.

It was like Christmas come early for New York-listed Eagle Bulk Shipping when GoldenTree Asset Management showed up to backstop an equity raise late last year. Now, the private equity firm may be the one celebrating. Back on 17 December, Eagle Bulk was looking for $25m in an overnight equity raise to help fund its acquisition of two ultramaxes from Scorpio Bulkers and possibly other targets.

While Stamford, Connecticut-based Eagle Bulk was able to raise about $5m from the public, nearly $20m in proceeds came when GoldenTree Asset Management agreed to backstop the shares issue. GoldenTree, Eagle Bulk’s second-largest holder, got nearly 1.1m shares at a bargain $18.10 price, down from $19.11 at the previous close and $19.59 just before the raise was announced. But the initial discount was not the half of it. Eagle Bulk recently helped GoldenTree register those sales for eventual sale under a shelf filing, with Eagle Bulk stock now trading above $47.

And while there has been no indication yet of an imminent sale by GoldenTree, this year’s upsurge in the value of dry bulk shares could see it tripling its initial investment by the time it does elect to cash in. GoldenTree remains Eagle Bulk’s second-largest shareholder after Oaktree Capital Management based on those 1.1m shares, which represent about 8% of the company. But the New York firm headed by Steven Tananbaum has been in sell mode, having disposed of some 1.9m Eagle Bulk shares in July in a deal underwritten by Morgan Stanley at $46.50 each. The sale brought in more than $90m. GoldenTree held about 22.6% of Eagle Bulk shares prior to the sell-off.

Oaktree currently holds about 28.1% of the stock, down only slightly from its level at the end of the first quarter.

If GoldenTree did well in the December shares deal, it was not a bad outcome for Eagle Bulk either. The overnight offering is known to have supported its acquisition of Scorpio’s 63,655-dwt SBI Gemini (built 2015), for about $16m, and 63,605-dwt SBI Aries (built 2015), for $16.5m. Now trading as Oslo Eagle and Helsinki Eagle, the pair are worth a combined $51m, according to VesselsValue.

Founded in 2000, GoldenTree lists some $46bn in assets under management for institutional investors including public and corporate pensions, endowments, foundations, insurance companies and sovereign wealth funds.

Golden Ocean Group has comfortably beaten analysts’ estimates for the second quarter of 2021. The success comes as the world’s largest listed bulker owner has refinanced a credit facility with help from its largest shareholder, John Fredriksen, and has appointed a new director to its board. The Oslo and Nasdaq-listed firm recorded net profit of $104.5m and earnings per share of $0.52 for the second quarter, up from a loss of $41.3m in the same period last year.

Analysts had expected the shipowner to post net profit of $89m for the period, according to consensus estimates. Golden Ocean also declared a cash dividend of $0.50 per share for the period, double the analyst consensus estimate of $0.25. Chief executive Ulrik Andersen said Golden Ocean’s result “reflects the dry bulk market’s strong underlying fundamentals, but also our strategy of maintaining a significant portion of our fleet exposed to the spot market“. But the firm is “more excited about what lies ahead“, Andersen added.

“Our longer-term market outlook is positive based on the pace of the growth in the demand, coupled with slowing fleet growth through at least 2023. While in the short term, port and supply chain inefficiencies will continue to result in rate volatility and periods of exceptionally strong rates.” Andersen said the $0.50 dividend demonstrates that Golden Ocean intends to pay out a “significant portion” of its earnings. “With no material capital expenses, no debt maturities or vessels on order, Golden Ocean, as the largest listed owner in the world, is well-positioned to continue to generate significant cash flows to the benefit of the shareholders,” he said.

Golden Ocean has agreed to refinance an existing credit facility with Sterna Finance, which is controlled by John Fredriksen and his family via Hemen Holding. The refinancing will secure up to $435m of new long-term financing, Golden Ocean said. “The highly attractive terms of the refinancing will lower the average cash break-even rate for the acquired vessels with an estimated $415 per day,” the company said in its second-quarter report.

In February, the shipowner acquired 18 modern bulk carriers — including three newbuildings — in a $752m deal with Hemen Holding, which is Golden Ocean’s largest shareholder. At the time, Hemen provided Golden Ocean with a $414m loan to give what the company called “time and flexibility” to arrange long-term financing for the vessels. All 18 of the vessels have now been delivered.

Meanwhile, Ben Mills was appointed to Golden Ocean’s board of directors. Mills is currently head of dry cargo at Seatankers Management, Fredriksen’s private company. Golden Ocean said Mills has “extensive experience” in the dry bulk market, particularly the capesize segment, through tenures in Trafigura and the Baltic Exchange. Golden Ocean recorded $275.7m in operating revenue during the second quarter, of which $148m was generated from voyage charters and $127.2m came from time-charter employment.

Its capesize fleet earned an average time-charter equivalent (TCE) rate of $29,372 per day during the three months, while its panamax and ultramax vessels earned $18,987 per day. This gave an average TCE rate of $24,920 per day for Golden Ocean’s fleet overall during the quarter. During the quarter, the shipowner converted time charters from floating rates to average gross fixed rates of $33,250 per day until the second quarter of 2022 for three of its capesize vessels.

Golden Ocean left the Capesize Chartering Ltd pool in August, allowing it to take full control of its capesize fleet’s commercial activities. Golden Ocean has covered 71% of available days for its capesize vessels at an average TCE rate of about $33,500 per day during the third quarter. Its panamax fleet is contracted for 92% of the available days at about $22,900 per day. “We expect the spot TCEs for the full third quarter of 2021 to be lower than the TCEs currently contracted, due to the impact of ballast days at the end of the third quarter of 2021 as well as fluctuations in freight rates,” Golden Ocean said in its second-quarter report.

Meishan Island International Container Terminal (MSICT) at Ningbo-Zhoushan port reopened on 25 August after a lockdown started on 11 August.

The terminal at one of the world’s largest container ports caused by a Covid-19 Delta variant infection detected from a worker at the port. China is operating on a zero Covid policy with strict lockdowns put in place when infections are detected. According to a notice released by Meishan Bonded Area Port Affairs Administration, Meishan bonded area lifts the lockdown in the morning of 25 August.

All the units and companies in Meishan bonded area will fully support and handle the loading and unloading of stranded cargos while the import container pick-up services at Meishan terminal are gradually resuming.

Container line CMA CGM said in customer advisory that MSICT had resumed partial operations on 18 August with two of its vessels alongside completing operations. However, at the time the yard remained closed. At the end of 24 August, some vessels had already berthed at Meishan terminal.

MSICT is the second Chinese container terminal to be hit by a Covid-related lockdown and closure in recent months. In May and June Yantian International Container Terminal (YICT) suspended much of its operations causing major disruption to global supply chains. The impact of the Ningbo terminal closure has been considerably less on global container shipping line operations.

The world’s most famous shipping economist, Dr Martin Stopford, the non-executive president of Clarkson Research Services, writes for Splash today, reacting to the news from Copenhagen where Maersk has put down a $1.4bn bet on methanol powered boxships. It is 15 years since the Emma Maersk was launched. With her 109,000 hp engine and 25.5 knot design speed, she was the beginning of the big gas guzzler generation. So, it’s great that Maersk is now taking this initiative to build methanol powered ships, but how green are they? And is it really a revolution?

Let’s start with the green issue. How green is methanol? It’s a hydrocarbon fuel and when burnt in a marine diesel engine it produces almost as much CO2 as heavy fuel oil (VLSFO). LNG and LPG both perform better. What makes methanol different is that it is not extracted from the earth, it is manufactured. If the manufacturing process uses green energy such as biomass, wind or solar, the methanol produced is green. Otherwise, it is just another hydrocarbon producing big CO2 emissions.

By placing contracts for green methanol, Maersk is helping to stimulate production, which is great for the environment. But it is not straightforward. There is serious competition for the limited supply of green energy needed to make green methanol and the conversion process is inefficient (40-70% of the energy is lost). So, making methanol for ships may not be the best way to use this scarce resource.

Green methanol is also expensive. Maersk says it could cost $1,000 a tonne, and it takes two tonnes of methanol to do the work of one tonne of HFO (19.7 MJ/kilogram compared with 41.8 MJ /kilogram for HFO) which pushes the ‘real’ price up to $2,000 a tonne, so shippers must expect to pay a lot more for ‘green transport’.

From a risk perspective, Maersk gets a lot of bang for their buck. Methanol burns easily in internal combustion engines and the new ships can switch between VLSFO and methanol. This is mature technology (I used to make model aircraft with tiny engines burning methanol). So, if the methanol doesn’t work out pricewise, the ships can switch to VLSFO and have not lost much.

Overall, Maersk should be congratulated for showing the world that shipping is serious about the environment, at a time when there’s not much green maritime technology on offer. But although it sounds revolutionary, it is just using established technology and a scarce supply of green energy to manufacture a hydrocarbon fuel that can be burnt in a ship. There are already about 20 ships in service or on the orderbook. And there are many small plants in operation or under development worldwide, producing green methanol.

The real revolution is not the fuel – there is still a long way to go on that front. It is their aim to negotiate a zero-carbon freight premium which shares the cost of the $2,000 a tonne green fuel with shippers. The liner companies need the shippers as financial partners on the voyage to zero carbon in 2050 and this would get the show started.

As Rod Stewart put it “The first cut is the deepest” and who better to make it than Maersk?

Rising inflation has been the focus of global policymakers in recent weeks as the rapid economic recovery has caused a mismatch between supply and demand while businesses try to rebuild their inventories and overcome supply chain hurdles that were caused by the pandemic. Most countries, including the US and the UK, have seen inflation rise faster than expected, giving rise to debate on how swiftly they should ween their economies off massive monetary stimulus. Both the Federal Reserve and the Bank of England said they will tolerate higher inflation and won’t raise interest rates for the moment but hinted that a modest increase in interest rates next year might be needed to keep rising prices in check.

While most economists agree with the Fed’s view that current inflation pressures are transitory, central banks in developing countries are raising rates to fend off a rise in inflation and some banks, including Germany’s Deutsche Bank have issued warnings that focusing on stimulus while dismissing inflation fears will prove to be a mistake if not in the near term, then in 2023 and beyond.

If interest rates go up in the future, where does this leave shipowners who are already facing challenges of raising capital as banks continue to push the implementation of shipping’s green agenda? Dr Martin Stopford, a leading shipping economist and non-executive director of Clarksons Research, advises to relax and forget about inflation as it takes extreme conditions to generate heavy inflation such as what the world experienced during the First and Second World Wars and the 1970s oil crisis, during which interest rates hiked and eventually settled down. “So far the economic impact of the pandemic is not in the same league as the 1970s oil crisis and why pick on inflation? OK, so US inflation has increased to 5.4%, but that’s against a background of disruptions and shortages that will probably sort themselves out over the next year,” Stopford says.

Last month, the International Monetary Fund said in its latest World Economic Outlook that inflation is expected to return to pre-pandemic ranges in most countries in 2022. However, it warned that persistently high inflation readings could lead to a reassessment of the monetary policy outlook and increased rates. Meanwhile, a global survey of nearly 500 economists taken this month by Reuters concluded that recent rising inflation in key economies around the world would be transitory. Over 70% of economists said the current uptrend in global inflation will pass and not lead to any major jumps in interest rates.

Dagfinn Lunde, a regular Splash columnist and founder of eshipfinance.com, also does not see any central bankers or politicians these days being courageous enough to fight inflation with extremely high interest rates. “I really do not believe it is a big thing for shipowners to worry about. I only advise them to lock in the LIBOR just to be sure and avoid surprises in their projects,” Lunde advises.

From the shipowner’s perspective, Khalid Hashim, managing director of Precious Shipping, wants the underlying world economic growth rate to always be in positive territory, even if it means the company will end up with higher interest rates on its borrowing. “Time charter rates for ships go up very sharply very quickly during periods of world economic GDP growth rates. Whilst higher interest rates would mean additional financial costs, they would pale in comparison to the bonanza in earnings that such underlying world economic GDP growth rates bring to shipowners,” Hashim says. Hashim believes higher interest rates are not something to be feared but can become deadly when they arrive during periods of healthy world economic GDP rates when shipping is in a recession due to the overordering of ships, which was the case in the past upturn. He now hopes for a multi-year upcycle for the dry bulk markets as the supply of new ships is not following the boom patterns of the past.

In the container sector, Tim Huxley, chairman of Hong Kong-based Mandarin Shipping, feels that it is unlikely that inflation will lead to rises in interest rates, but a little inflation might not be a bad thing as it historically helps asset prices. For Huxley, higher interest rates might ease the flight to find investments that provide a yield and so perhaps stop the inevitable next round of private equity cash coming in which will probably find its way to unwanted newbuildings. “Excess newbuildings are always the curse of markets,” Huxley cautions. “Any returns you are going to get on cash deposits through higher interest rates are not going to match the returns container and bulk carrier owners are currently generating-if they do, we’re really in trouble,” he says. There is a growing divide between those worried that prices may be increasing too quickly and those arguing that economies need much more time to grow. Big corporations are increasingly sounding the alarm in their quarterly numbers as they struggle to cope with supply chain disruptions that are pushing up prices. Whether rates go up or not in the future, we still can’t forget the energy transition agenda as the industry needs new and cleaner ships on the water.

From the brokers’ point of view, Affinity’s Richard Fulford-Smith reports the orderbook has been at very low levels, so the future is bright for those in the container and dry bulk markets who have been through fleet replacement programs already. However, he thinks the political will to hold interest rates will wane with inflation and that higher funding costs and general inflation should worry owners committing to long term fixed price employment contracts. Fulford-Smith suggests asset inflation, including higher fleet replacement costs, will enhance the values of new ships as older, less efficient ships can face much higher costs and earlier obsolescence. “Shipping faces unprecedented change at a time when legislation will eventually significantly increase the cost of running all but the most ESG compliant ships. That should worry certain shipowners who ignore the advice to look forward,” the veteran broker warns.

The global economy is projected to grow 6% in 2021 and 4.9% in 2022, according to IMF, which stresses vaccine access as a key question for the outlook on how inflation expectations will evolve. It sees two blocks: those that can look forward to further normalization of activity later this year and those that will still face resurgent infections and rising Covid death tolls. IMF chief economist Gita Gopinath warned that “inflation is expected to remain elevated into 2022 in some emerging markets and developing economies.” Many factors are at work in this uncharted recovery, and it remains to be seen what a socially acceptable level of inflation is. Even as delta risks loom, early signs from the third quarter show growth accelerating and inflation peaking after its recent jump, at least in the US. China and Europe on the other hand are expected to see greater tolerance for inflation by freeing up more funds for banks to lend, while Russia and Brazil have already started hiking rates. For the world’s biggest central banks, recovery is on track and inflation risks are passing meaning they will be in no hurry to make major moves. The Bank of England, for instance, projected that inflation will hit 4% this year while maintaining rates at 0.1%. “CPI inflation has risen markedly, to above the monetary policy committee’s target of 2%, and is projected to rise temporarily to 4% in the near term. The rise largely reflects the impact of the pandemic as the economy recovers,” the bank said in its latest monetary policy report.

High freight costs have been one of the main obstacles in the US economic recovery this year, adding to inventory shortages and higher prices. Nevertheless, they are not seen as a long-term driver of inflation and could even, if they come down a bit, prolong moderate inflation and offset any tightening of monetary policy by the Federal Reserve. Many shipowners rely on debt providers for their business growth, but according to Affinity’s Fulford-Smith classically banks go missing at the best moments to invest in down cycles. “Right now, they’re largely sidelined but with the good excuse that balance sheet requirements associated with shipping being deemed high risk have hurt them too much,” he says. For the time being, shipowners are in the driving seat, enjoying the best times for the container and dry bulk shipping market in more than a decade, and they don’t seem to mind increased interest rates if the growth continues. Still, there are no major signs of interest rates going up significantly and shipowners have learned their lesson and are keeping the discipline of not ordering much in these times, especially in the bulker segment, which should in addition to phasing out of older vessels keep rates high. Controlling Covid outbreaks and managing recovery while trying to find a viable solution for energy transition still drives most decision making for governments and a rise in interest rates from central banks would inevitably slow down economic growth. If macroeconomic conditions remain strong in 2023, policymakers will be forced to act, but not just yet.

Another big name in maritime economics, Dr Roar Adland, professor of shipping at the Norwegian School of Economics, says that debt levels are so high, both in the private and public sector, that the global economies simply cannot handle higher interest rates. “For that reason, and due to the political will to keep kicking the can down the road forever through central bank intervention, I do not believe interest rates will rise meaningfully in the foreseeable future, and so shipowners have one less thing to worry about,” Adland asserts.

Understandably more and more market participants, whether shipowners or charterers, are asking for how long can this go on? Some of them got burned at either side of the fence during the real super cycle from 2006 to 2008. As Splash Extra seeks to untangle the supporting factors of the market, it has become clear that much of the current support should be seen as temporary. And while acknowledging that temporary support to a shipping market is always the most powerful driver – the nature of it means it will go away at some point in time. Still, it’s not just around the next corner.

Liberté

The dry bulk carriers are free to go wherever they like, but they seem to prefer going longer hauls as they did in 2020, where the average haul went up by 4.3% to 5,119 nautical miles across all dry bulk ship sizes. In the most recent months, that trend is reversed as congestion around many key importing ports has started to rise. Central to this development are the Chinese ports. The delta variant of Covid-19 is an annoying fly inside the windscreen for the Chinese authorities as they seemingly can’t control it.

Égalité

To China, it doesn’t matter where the cargoes come from, if they do not call at a Chinese port earlier than 14 days since the last port call – floating Covid-19 quarantine – and if business partners keep quiet about Chinese affairs. Splash Extra has earlier on pointed to the coal trades as one to watch out for on that account. To the coal producing miners digging in the Australian outback, it means that new buyers had to be found asap. While Japan, India, South Korea, Taiwan, and Vietnam are all more important buyers – in terms of larger volumes, China has taken only 182,220 tons of coal from Australia in the whole of 2021, down 99.6% in the first six months of 2021. That’s it. All suppliers are equal, but some are more equal than others.

During the first half of 2021, Indonesia has grown its total coal exports by 6.7m tons, but those to China by 17.3m tons. China acts like the cuckoo in another bird’s nest, as it literally muscles out the original inhabitants. Here Japan and Vietnam have been muscled out, seeing coal trade drop by 25% and 20% respectively during the first six months of 2021.

At a different scale, Australia has just about been able to find a new home for the 51m tons that used to go to China. Indian-bound exports are up by 111%, but more noteworthy from a tonne-mile perspective, the Netherlands are up by 90% to 4m tons, Brazil jumps 79% to reach 2.8m tons, while Poland doubles up to reach 1.1m tons.

Fraternité

The number of monthly voyages is up by 9% in the first half from last year. Hardly a surprise. But when compared to 2019 – the number of voyages performed has risen only 1%. To Splash Extra this is where the brotherhood has succeeded. By commanding higher freight rates, taking advantage of the inefficiencies offered in the market. In H1 2021 volumes are up by 7.3% but when taking the tonne-mile approach, demand has only risen 2%.

Capes might have cracked the $50,000 mark in recent days, but analysts caution that underlying fundamentals are not in place for any kind of supercharged super cycle. It is a temporary collision of factors that have sent rates for all dry bulk classes skyward.

The key factor this month is not about demand, but rather port congestion as many authorities, led by China, add a host of Covid-related precautionary measures for ships calling. More dry bulk ships are tied up by port congestion than ever before, according to research from brokers Braemar ACM.

Bulk carrier queues around the world hit a peak of almost 142m dwt on August 15 with China accounting for more than a third of this congestion. A remarkable 16% of the global dry bulk fleet is tied up by port congestion.

Analysts at international ship owning organization BIMCO this month sought to downplay talk of a dry bulk super cycle. The value of dry bulk ships is far below the last super cycle levels. A comparison of the value of a five-year-old capesize ship today with August 2008 shows how big the difference is. In August 2008, the ship could be traded for around $153m. Today it could yield just $38m. Although well below 2008 levels, this is still the highest level since December 2014.

“Commodity prices have staged a comeback and are hovering around or above 2007 and 2008 levels. This has fueled talk of a commodity super cycle. However, while dry bulk freight rates and ship values are currently high compared to the past 10 years, they are very far from earnings seen during 2007-2008 and there is little to suggest that they are heading that way,” commented Peter Sand, BIMCO’s chief shipping analyst.

Shipping is back in the mainstream news, but this time it’s not due to an incident, but because the industry has turned profitable. Do we really want people to know that?

Saturday mornings, at least in this household, are usually a period of quiet reflection on the past seven days. Shipping preoccupies us for most of the working week, so this is a chance to dip into the mainstream media for a bit more analysis on the major stories beyond our industry. It was hence with some surprise that I was recently drawn to a major feature in the UK broadsheet, the Daily Telegraph with the headline ‘Freight at the center of a storm that threatens the global economy’. The headline was followed with the alarmist line: “Deadly cocktail of factors including port disruption, container shortages and lack of semi-truck drivers is sending the cost of shipping soaring.”

Despite the dramatic opening, this was in fact a well-informed article about how the current supply chain crisis is a combination of factors all coming together at once. Unlike so much of what appears in the mainstream media, it did not set out to vilify the shipping industry and cast shipowners as greedy tycoons out to fleece their customers, crews, and the public at any opportunity. Coinciding with the arrival of the Ever Given in Felixstowe, four months late after its altercation with the banks of the Suez Canal, the article inevitably used shipping’s most infamous and photogenic moment of the year. Does our industry want to be splashed across the front pages in such a manner?

The increased cost of transporting goods is going to affect most consumers sooner or later and surely it is a good thing that a wider audience are aware of why this happened. Anything that shows to a wider audience the critical role shipping plays has got to be good for the industry, whether it leads to less knee-jerk, ill-conceived regulation being foisted on us or prompts younger people to consider that this could be an interesting career path. The Telegraph piece was notable in that it stressed: “It’s simply a matter of supply and demand. It’s no more complicated and no simpler than that.” It also quoted one analyst as saying, “Before the pandemic, shipping was monstrously cheap.” Great to see quotes like that, but there is still clearly a long way to go in informing the wider public. Scroll down to the comments section on such articles as this and you find that a worryingly large number voice the opinion that the solution to these higher transport costs is to stop manufacturing in China and bring manufacturing back home. Perhaps the next step is for someone to publish the numbers on the cost of doing that, showing that the increased cost of re-shoring manufacturing would be massively higher than current shipping costs.

Shipping probably didn’t seize the chance to promote itself when the Suez Canal was temporarily blocked, and world trade was affected. The fact that the industry is now making decent returns and more importantly has kept the world supplied with goods despite the pandemic is a great story that is worth telling – and worth telling before shipping gets blamed for empty shelves in the run up to Christmas. It is high time we stopped hiding behind the veil of secrecy which seems to envelop our business. We not only have a great story to tell, but it’s one that needs to be put in the right context and told to a wider audience. Perhaps as the end of the year approaches and the traditional TIME magazine ‘Person of the Year’ is announced, it should be joined by an ‘Inanimate Object of the Year’ award-and that, surely, should go to the humble shipping container.