Key facts
- Dry bulk and container shipping markets have significantly improved, with upside potential.
- Tanker earnings are low, particularly for large crude tankers.
- The offshore industry has experienced a substantial decrease in asset values due to low oil prices.
- Listed shipowners have faced controversies involving conflicts of interest and self-dealing.
- Michael Webber's annual scorecard ranks shipping companies on corporate governance and ESG practices.
The shipping market is experiencing a bifurcated recovery, with dry bulk and container segments showing significant improvement while tanker earnings remain low. According to Vessels Value data presented by COO Adrian Economakis, Panamax container ships have seen a 40% rebound in asset values over the past year, with earnings above operating costs and positive sentiment expected to continue for the next two to three years. Tanker asset values have also seen an increase, up 10% for larger crude tankers and 20% for smaller clean tankers, despite weak spot markets, with a positive outlook for prime-aged asset values as the market appears to be at its bottom.
In contrast, the offshore industry has suffered a severe downturn, with a 70% decrease in values over the last two years, largely attributed to the drop in oil prices from $130 USD in 2014/2015 to $30-$40 USD. While oil prices have begun to recover, the exploration restart by oil companies takes time, and the offshore sector remains saturated with low-value vessels. Some specialized areas like Diver Support Vessels and Offshore Support Vessels used for maintenance show continued interest.
Gas shipping does not neatly fit into these categories, with values having dropped slightly but remaining relatively stable. Demand is good and growing, but an oversupply of vessels built during a previous boom period and market restrictions have impacted the sector.
Separately, the corporate governance practices of publicly listed shipping companies have been a subject of scrutiny. Equity analyst Michael Webber, founder of Webber Research, has been tracking these practices for years. His annual scorecard, which ranks companies on corporate governance and ESG standards, highlights historical controversies. These include conflicts of interest, self-dealing by private sponsors and management to the detriment of common shareholders, public companies buying ships from related private entities at inflated prices, and highly dilutive equity sales that have significantly reduced shareholder value. Webber's latest rankings were recently released.