Investopedia: Shipping A Big Mess

This isn't the first time, nor likely the last, that I've written about the tough conditions in the shipping industry. A combination of high capacity, high fuel prices and inconsistent emerging market demand, has led to low rates and high operating costs and numerous struggling companies. With the recent bankruptcy of General Maritime (OTCBB: GMRRQ) and the warnings from Frontline (NYSE: FRO) management about its own potential liquidity difficulties, it seems pretty clear that the reckoning has come for many of these companies. (To know more about bankruptcy, read: An Overview Of Corporate Bankruptcy.)

General Maritime Goes Down

General Maritime was not the first, nor will it likely be the last, shipping company to declare bankruptcy, during this downturn. There's not a lot that really needs to be said about this situation; the company had a great deal of debt, which is true for many shipping companies, and a dismal operating environment, which, again, is true for pretty much all shipping companies.

Follow this link for more:
http://stocks.investopedia.com/stock-analysis/2011/Shipping-A-Big-Mess-GLNG-SFL-DSX-NAT-EXM-DRYS-GLNG-PRGN1130.aspx

Investopedia: Not All Shipping Is Sinking

Maybe it seems obvious, but a tanker ship is nothing like a dry bulk carrier, and both are nothing like a containership. Oh true, they are all very large boats and they all operate on the same underlying economic basis - ship supply, demand for carriage, day rates, contract coverage and so on. When it comes right down to it, though, it sometimes seems like there are more differences than similarities. (For a quick refresher on the state of the industry, check out Has Dry Bulk Shipping Reached Low Tide?) 


Lately, the performance and expectations of dry bulk carriers has been underwhelming. Look at the container shipping market, though, and the picture is quite a bit different. Investors here have seen largely a strong run from 2009 and many of these companies throw off good dividends as well. What's more, with a different sort of leverage to global trade than the bulk carriers, they could represent a worthwhile balance in a portfolio.

Have Boat, Will Travel
Containerization was a major development in the shipping world, allowing carriers to become far more efficient in loading, carrying and unloading cargo. Better still, a container ship can carry almost anything - as long the goods fit into a standard container, it's not a problem. So whereas a dry bulk company like DryShips (Nasdaq:DRYS) or Genco (NYSE:GNK) will devote an entire ship to iron ore or grain, a containership can holds hundreds of different kinds of cargoes at the same time.

Unfortunately, it has not always been easy to trade containership stocks in the United States. Most of the major players - Maersk, Mediterranean Shipping, CMA, Evergreen - are either private or traded on foreign exchanges. But there are still a few names that investors can play, such as Paragon Shipping (Nasdaq:PRGN), Seaspan (NYSE:SSW), Euroseas (Nasdaq: ESEA) and Danaos (NYSE:DAC). Better still for many investors, the first three pay dividends and Paragon and Euroseas have rather attractive yields. (For more, see Dividend Facts You May Not Know.)


Please click below for the full piece:
http://stocks.investopedia.com/stock-analysis/2011/Not-All-Shipping-Is-Sinking-PRGN-SSW-ESEA-TAL-TGH-BOX-CAP0311.aspx