Apparently bulk shipping is a bit like farming. I come from farm country, and there is a joke in these parts that goes; "How do you end up with a million from farming?
Start out with 10 million!"
The first bulk carrier has gone bankrupt. Industrial Carriers Inc. They had 1 billion dollars in revenue in 2007. One Billion! They operated 50 ships. I don't know how many they owned, if any.
Lots of companies have entered the bulk shipping business in the last 10 years.
One can understand why. One can also understand why this will probably be just the first of many companies to go belly up.
From the Journal of Commerce:
"During the market's free-fall that began this summer, rates for 150,000-165,000-ton Capesize ships crashed by 50 percent as of last week to just over $12,000 a day compared with a peak of $233,000 in late May."
Click here for complete article.
That's almost a 95% drop in revenue! Of course the charter rates were insanely out line on the high side, the result of too much demand for bulk cargoes such as iron ore and grains.
I will post later regarding the other companies, especially those who issued stock.
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