Ship Owners Need to Develop Quick Thinking in Dealing Ships

in Hellenic Shipping News 22/06/2019

As with everything these days, the ability to quickly decipher and react to the flood of daily information received can make or break a company, even more so a shipping company. Shipbroker Intermodal said in its latest report, that a ship owner needs to be constantly on alert and ready to pounce on the S&P market in order to remain successful.

Intermodal said that ““we are here for the long run.” This is statement that we hear more and more often these days from shipowners, managers and operators. A few years ago the fundamentals of the industry provided asset play opportunities. Selling a ship with profit did not really require much thought. The market was there to pay for it. These days things are not so simple”.

Timos Papadimitriou, Intermodal’s SnP Broker said that “in my previous insight the conclusion drawn was that SnP activity is vital for a shipping company. Whether it is the dry bulk, the tanker or even the container segment, the asset appreciation/depreciation cycles are short thus quick reflexes are needed. In a way, successful asset play has become a game of volume. This is just a humble opinion but it seems that a strategy of making back to back transactions i.e. selling an older asset and then buying a younger one might not be so easy to implement nowadays”.

Intermodal’s analyst said that “owners and managers are struggling in the majority of time to bank profits. The price you pay for an asset has become the most relevant factor as well as the cost of the financing acquired for the respective purchase. For a shipping company to be able to buy or sell an asset fast in any given market could be essential. This is not to say that companies need to buy or sell for the sake of doing so but when a market presents opportunities one should be able to recognize them and act fast”.

Papadimitriou added that “there are a lot of companies that make a transaction once every 5 or even 10 years, a strategy that used to be rather successful and effective. The question is whether this tactic is still effective in today’s environment and if being absent for a long period of time from the SnP market is prudent after all? The reality is that nowadays profits are harder to come, the industry is bombarded with more and more regulations and the banking and financing field mutates faster than most players can adjust”.

“So, in my humble opinion it is neither that effective nor prudent. Staying on top of the asset market gives a company a competitive edge that can turn into a clear advantage together with proper management. So when saying above that this is a game of volume, even doing one transaction every 12-18 months could be enough to keep a company up to date with the asset market as well as the shipping financing market. In the years to come the successful asset play of a shipping company will not be judged or related only to a single asset and on how much this was bought and sold, but it will be the sum of transactions a company does throughout the years. As it is very difficult to be spot on in either selling or buying, volume and frequency will cater better odds and will ensure the being “here for the long run” as well”, Papadimitriou concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide