Supply Chain Collapse

Truck sales down. Container volumes down. And you think oil will do well? 

Container rates lead inflation higher

Inflation should move back up. 

Container Shipping Rates Rising

Danaos is going to outperform if container shipping prices rise. 

Container Traffic Slowing Down

The economy isn't doing that fine. 

HARPEX Index Container Rates

The HARPEX index shows the container shipping rates. When it rises, this means there is demand for container ships or it is a sign that there are supply chain problems contributing to inflation.

Orderbook Vs. Shipping Rates

The orderbook as a percentage of total fleet peaked in 2008 at 50%. Today, the orderbook to fleet level is at 20%, so there are not a lot of ships being built. Even if they are being built, it takes around 2 years to build one.

History shows that when the orderbook to fleet ratio is low, the baltic dry index spikes. This is because shipping rates rise due to a constraint in supply of ships. Once the orderbook to fleet ratio rises again to a certain level, the baltic dry index will start to go down again.

 

For more info on container shipping, go here.

Container Shipping Market

Freight rates for bulk shipping have gone up a lot, so what's the outlook for container shipping?

The container shipping market is going to grow at 8.5% per year.

All continents will see growth.

 

Growth will only accelerate.

The fleet is almost being used at full capacity and orderbooks are at all time lows.

Supply is constraint, we don't see any new ships being built. 

A lot of ships are ageing and will come off the market.

Danaos Corporation trades at PE of 6 and is at book value. This is a good buy.

Container Shipping Inflation

Container shipping is booming.