One View on Shiplending & The Current Korean Crisis

by Alan Ginsberg

Time and again we hear it: the longer term health of the shipping finance requires a good bloodletting. But, for more than a decade, it hasn’t happened. The current Asian financial crisis would appear to provide the raison d’etre for the shiplending markets to take a good pounding. Of course, it’s always the other guy we want to put down onto the canvas.
So, where do we begin? To start, we want freight rates to drop just enough to force owners to scrap the old ladies. The turn of the year forces owners of mature tonnage to confront fifth special surveys and dry-dockings with the hope being that enough owners will recognize that there is no payback return on their investment and thus no reason to keep holding on. Next, we want to put a damper on speculative ordering; slowing down shipyard capacity is also not a bad idea.

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