Posts
Cavalier Shipping insights on the current shipping finance market and recent events in the shipping space.
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Port Operations + Automation
Port operations rarely make national headlines, but they do when president-elect Donald Trump (pro-union) and the world’s richest man Elon Musk (pro-automation) tweet about them, with opposing viewpoints on automation for shipping container loading/unloading.
Ship-Operating Business Model: Simple Yet Complex
The ship-operating business model is conceptually simple yet realistically hard to master, given the shipping industry’s volatile market. Some ship-operating companies have been in the business for quite some time—like DS NORDEN (est. 1871) and Western Bulk (est. 1982)—and then there are newcomers, like Costamare Bulkers Inc. “CBI” (est. 2022).
Shipping Representation in the Market
Contrast shipping’s 0% representation in the U.S. S&P 500 with its 12% representation in Norway’s Oslo Børs Benchmark Index––in the U.S., professionals often confuse "shipping" with logistics giants like FedEx or UPS; in Norway, professionals are immersed in the maritime world, with financial media regularly covering shipping and offshore markets.
Shipping Needs Investors
Shipping needs investors, but it seems investors do not need shipping.
Freight Forward Agreements + Liquidity
“Is the FFA market liquid enough?” It’s one of the most common questions about Forward Freight Agreements (FFAs). Like many things, the answer is: it depends.
Panamax vs. Supramax Earnings
Bigger ships with greater cargo capacity earn more than smaller ships with less capacity for carrying the same type of cargo, right? [Wrong.]
Panamax Earnings Vs. Values
A core tenet of valuation theory: the price of an asset is the net present value of the cash flows it generates…unless that asset is a ship.
The Ripple Effects of Earnings Volatility
The ripple effect of a sharp 45% drop in Capesize bulk carrier earnings this October is reverberating across the dry bulk universe.
ILA Strike Impact on Bahamas
The ILA strike’s impact on the U.S. economy has been extensively analyzed, while little attention has been paid to the strike’s ripple effects in the Caribbean—especially among nations heavily reliant on U.S. imports.
Shipping Investment Menu
The only barrier to entering today’s shipping market is money. With cash in hand, anyone could outsource services necessary for the safe operation and gainful employment of vessels to a number of specialist firms.
China’s VLCC Market Insight
For those looking to bet on the tanker market, going long the TD3C FFAs presents an interesting opportunity to take the same stance as an informed market player like PetroChina–but at a discounted entry price.
Seasonality and Very Large Crude Carriers (Q2 2024)
While AI dominates many companies’ earnings report discussions, seasonality is the leading profit-driving topic for publicly listed VLCC players.
Charter Rates for Very Large Crude Carriers
In today’s broad bull market for shipping, most segments are at cyclically high levels, so it’s difficult to identify attractive entry points to invest. A needle in the haystack: VLCC charter rates.
Infrastructure in Shipping
Major infrastructure funds invested big dollars in shipping in recent years. But what qualifies as "infrastructure" within shipping? LNG assets, container leasing, and Jones Act assets.
Vessel Sales and the Summer Slump
Just as stock market liquidity dries up on Wall Street over the summer, with traders and hedge fund managers heading to the beach, sale and purchase activity of vessels dwindles as shipowners take some deserved time off.
Shipping + Broader Investment Trends
When you think of mainstream investment categories, things like tech and real estate come to mind–not shipping. But decisions to allocate capital into shipping are often deeply intertwined with broader investment trends.
Shipping vs. Hedge Funds: Net Asset Values
Publicly-listed ship owners often trade at a discount to their net asset value (“NAV”): the cash amount a company would net if it were to sell all of its assets and use the proceeds to pay off all of its liabilities.
Shipping’s Quintessential Investing Strategy
Shipping’s quintessential investing strategy: buy at the trough and sell at the peak of a cycle. But what do you do if nothing is trading at or near a trough? This question vexes shipping-focused investors today.
Connecticut/New York Shipping: Changing Financial Tides
The Connecticut/New York area’s competitive advantage on the world maritime stage does not stem from the tradition of fleets passed down from generation to generation, as you would find in Greece. The region's superpower is its proximity to some of the deepest pools of capital in the world—the "smart money".