Shipowners renew fleets, increase profit margins getting ready for 2011

In a year that could easily be dubbed as the “era of ship investment” ship owners across the board moved to take advantage of lower prices and a healthy freight market (although with many ups and downs). Improved financing conditions meant that owners could access more funds, thus moving forward with their investment plans.
Many opted for new buildings, as shipyards reduced their prices in order to refill their berths for the years to come, something which most of them have achieved. As a result, as we enter 2011, a year expected to bring yet more healthy economic recovery for most major economies, but also significant challenges for others (as      IMF noted in its end-year report), the world’s shipping industry and its leading maritime nation, Hellas, are in a good position to reap the profits.Hellas-based shipping companies have renewed in a large part their fleet of vessels, lowering both their average purchasing value, as well as their age. Lower ship values as much as 50% compared to the pre-crisis levels, meant that 2010 proved to pose a solid opportunity for many companies in the dry bulk sector to add more vessels to their fleet at a lower cost, compared to ships acquired during 2007-2008. This will enable them to increase their profit margins during the years to come, without expecting freight rates to reach levels similar to those of the sector’s golden era of 2004-2008. It’s a true testament of shipping’s growth potential, even as the country is facing its worst financial crisis in decades, a crisis now perilously spreading to other eurozone members as well.
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Source: Hellenic Shipping News