Are Shipping Loans Safer? Good Times, Bad Times?

by Philip Rankin, Marine Risk Management AS

I had better get my retaliation in first. My company is an active player in the hands-on business of – in shorthand – repossessing ships for banks. So most people’s “bad” market is our “good” market. We are the little weather man who comes out in the rain. Any impression you gain, gentle reader, that what I offer represents wish fulfillment is entirely justified. I hope, however, that there are, nevertheless, some objective truths about the current market.

There is a definite feeling about that shipping may have turned a corner into an era of balance and prosperity. No doubt there is some justification for this, sector by sector. The tanker owning market, for example, is finally dispensing with the “bulge” of unwanted ships built twenty years ago in the 1970′s when the demand for shipping of oil was erroneously expected to go ever upward to the stars. The confusion induced by the possible impact and application of the United States’ Oil Pollution Act 1990 has effectively restrained new building over the intervening seven years – so OPA has done a good to the tanker owners that they would be unlikely to have done for themselves.

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