The shipping industry is the lifeblood of the
global economy. According to the International Chamber of Shipping (ICS), the
international shipping industry is responsible for the carriage of around 90%
of world trade. There are roughly 50’000 merchant ships registered in over 160
nations manned by over a million seafarers generating over half-trillion
dollars per year in freight rates .
In our first article, we will look at the international shipping industry trends and how our investors can benefit by diversifying their investment portfolio with maritime transportation investments.
So, why invest in shipping?
The global shipping industry went through
tough times during the financial crisis of 2008-2009. While the industry
experienced a brief recovery from 2010 to 2015, supply and demand concerns have
put pressure on top and bottom-line performance. From the other side, according to
Moody's Investor Services, said on June 25, 2019 - the outlook for global
shipping in 2020 will remain more stable, than fast-growing, as expected higher
earnings are offset by US-China trade tensions and increasing regulations.
The key drivers of the next years stable outlook are a combination of anticipated EBITDA growth of 16%-18% into 2020 (although from a relatively low base in 2018) and largely balanced demand and supply growth.
And we have chosen to hold maritime shipping on our radars because of whole industry fundamentals – a significant part of the economy, history, providing liquid assets for investors, somehow similar to real estate. All together taken, such expertly vetted opportunities give one good extra asset class, at which to look for the next portfolio spread.
One more good aspect that attracts attention is regular income coming from such type of projects. Usually, vessels are hired and continue generating income for a new owner right after the transaction is made, this means regular payouts for all participated parties.
What shipping investment opportunities will be offered at BOLDYIELD?
BOLDYIELD is going to offer individually
selected asset-based small and mid-size shipping crowdlending projects, thus
providing a possibility to diversify investors’ funds in a secure way. By
using our experience in several maritime transportation classes and types, we
are most confident in dry bulk cargo vessel class, which has proved most of the
stability through even tough years. This type of Maritime transportation asset
will be presented on BOLDYIELD as one of the major classes offered to invest in, but
if any even more secured options will come, we will consider it
The shipping industry the same as any other significant world industry has
struggled over the past years. In the words, investing in the industry isn’t
for the faint of heart and it’s important to do appropriate due
diligence before taking steps. For the sake of investors, BOLDYIELD has
done all necessary checks and investigations to allow certain projects to be
listed on the homepage, to be open for lending. Anyone interested in more
detailed market analysis has to take into account three factors driving the shipping
- Supply: This is the number of vessels that are currently on the market, which is impacted by both - new builds and retired vessels.
- Demand: This is the demand for shipping by end market consumers, which is driven by the overall global economic growth rate.
- Costs: This is the cost of operating a vessel and long-term costs, which includes both fuel costs and the cost of debt (e.g. interest payments).
The Bottom Line
The shipping industry presents a good alternative for real estate and other peer-to-peer (P2P) industry investments diversification. With solid experienced partners and smart investment distribution, a possibility to earn more above-average returns is even higher. Sign in to www.boldyield.com and have extra opportunities to diversify Your portfolio.
 Freight rates - is a price at which a certain cargo is delivered from one point to another. The price depends on the form of the cargo, the mode of transport (truck, ship, train, aircraft), the weight of the cargo, and the distance to the delivery destination. (Source: https://en.wikipedia.org/wiki/Freight_rate)