Latest MSI analysis finds cruise operators still searching for reset
A restart to full operations can’t come soon enough for cruise lines, whose financial position has become increasingly precarious given high debt levels incurred from fleet expansions and the fundraising required to survive the current crisis.
The latest cruise market report from Maritime Strategies International finds that net revenue losses for the ‘big three’ lines (Carnival, NCLH and RCI) in 2020 and Q1 21 almost match the accumulated net revenue gains of the preceding five-year period.
The scale of the problem facing the cruise lines – and the entire tourism sector – was laid out by the UN World Tourism Organisation (UNWTO) earlier this year when it pointed out that two-thirds of the world’s destinations were still either completely (32%) or partially (34%) closed to international tourists.
Dry Bulk Shipping
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Turkey and Japan have similar maritime strategies
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This story is available exclusively to Insider subscribers. Become an Insider and start reading now. Shipping is the place to be this year and we are full steam ahead, one stock picker said.
Container volumes are set to expand with shipment backlogs, bolstering carrier profits.
China s splurge on commodities is driving a commodity supercycle and driving up shipping rates.
Global trade is set to flourish as economic growth accelerates and countries open borders once more as COVID-19 vaccines steadily beat back the pandemic. No industry is more exposed to an upturn than shipping. With a cyclical rotation from momentum and growth to economically sensitive, global trade-driven value stocks, we believe shipping is the place to be this year and we are full steam ahead, said Randy Giveans, the senior vice president of equity research at Jefferies.
Credit: MSI Credit: MSI
The OSV sector will be reliant on a hitherto unseen amount of scrapping to balance the market, writes Gregory Brown, Associate Director – Offshore, Maritime Strategies International
There is a consensus that an OSV market recovery will only be driven a supply side rationalization. As well as a lack of newbuild activity, that rationalization will have to include unprecedented levels of scrapping in a market which has historically witnessed only limited levels of attrition.
That limited level of attrition has several deep-seated roots, most notably weak scrap values, a fragmented supply chain, and low idle costs (~ $1,000/day). These fundamentals are unlikely to change. Scrap prices are likely to remain weak, the fleet will remain fragmented, and OSVs will continue to be unattractive for scrap yards.