Container Shipping Industry Rebounds, Investors Taking Notice
NEWARK, N.J., July 6 /PRNewswire/ -- Buoyed by the sharp rebound in shipping demand and prices, ocean carriers are leveraging their position to reduce debt, build back services and regain financial stability. Banks and credit markets are eying predictions of the industry's strong return and signaling they will loosen credit and financing for the industry, reports The Journal of Commerce this week.
(Photo: http://photos.prnewswire.com/prnh/20100706/NY31005 )
(Photo: http://www.newscom.com/cgi-bin/prnh/20100706/NY31005 )
"It seems that all of the major liner companies will come out of this unscathed following some major restructuring and recapitalization and are really reaping the rewards of tight ship and box supply," said Loli Wu, managing director and head of Americas transportation infrastructure at Bank of America Merrill Lynch.
The industry's ability to raise new capital is based on expectations that the balance between vessel supply and demand will support continued pricing increases. Increased demand, vessel order delays and slow-steaming of ships is reducing excess capacity faster than expected, leading to signs that demand growth will exceed capacity during the next several years.
Some ship owners and operators already are testing the waters by going to equity markets in various ways to reduce the debt that piled up last year. Carriers used various methods to raise some $13 billion in financial help last year, by one estimate, to provide needed cash during a year in which ocean container carriers lost a collective $15 billion.
This week's Cover Story investigates carriers' strategies for recovery and surveys the prevailing attitudes of investors toward container shipping's rebound.
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SOURCE The Journal of Commerce
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