The global
shipping industry continuously faces weakened demand amid sluggish global
economic growth and evolving structural overcapacity. Under the impact of the euro
zone debt crisis, the shipping crisis occurs that has already caused a string
of bankruptcies around the world, especially in German. The issue is important
because the two crises is ongoing and will continue for several years. At the
same time, they have many of the same causes which will draw attention all over
the world. Germany is the
superpower of container shipping, controlling almost 40pc of the world market. From
a financial point of view, Germany has been hit especially hard by the shipping
crisis because of the popularity of funds used to finance ship construction, as
well as easy credit can be granted by German banks. Nowadays, Germany’s 10
largest banks have 98 billion euros, or $128 billion, in outstanding credit or
other risks related to the global shipping industry, according to Moody’s
Investors Service. HSH Nordbank in Hamburg, the world’s largest provider of
maritime finance, is expected to raise its estimate of potential losses from
shipping on Wednesday when it reports fourth quarterly earnings.
For the
practicing manager in financing industry and banking industry, they have to
notice that the shipping industry is experiencing recession. Some of the
companies are on the edge of bankruptcy.
Even if the industry recovers, which will take several more years at
least, any revenue that ships generate will go to repay debt. So the managers
should consider their strategies regarding load or finance to the shipping
companies.
Reference:
http://www.nytimes.com/2012/12/05/business/global/the-next-crisis-for-german-banks-isnt-greece-its-shipping.html
http://www.telegraph.co.uk/finance/newsbysector/transport/9473476/World-shipping-crisis-threatens-German-dominance-as-Greeks-win-long-game.html
http://www.frohlichcapital.com/2012/08/23/threat-of-bankruptcies-for-german-shipping-industry/
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