Supply demand factors, I think there is a lot of discussion I think about the shipping lines and to the first bullet under the demand side, I think gets a lot of the attention, deserves a lot of attention. We continue to tweak this. There are a couple of things that I think that we loose sight of is that you know 2011 freight rates were very, very low. 2012 the industry and particularly beginning of the year got general rate increases.
So when you look at the first six months of 2011 versus the first six months of 2012, the freight rates are actually 20% higher all in. What you do see lately is some deterioration, some of that trading back. At the same time the leader in the industry Maersk has again announced another general rate increase.
So I think when we look at the overall industry we're going to see better freight rates in 2012 than in 2011 and we did see that in the second quarter numbers for all the shipping companies, they had better numbers in the second quarter than the first quarter. I think we will see decent numbers from them in the third quarter.
Fuel continues to bounce around, it looks like there was a trend where lower bunker fuel was going to help them. I think it’s probably going to be a net net neutral. The other thing that you lose some times of the ship side of it is the fact that the shipping companies have been focused on cost reduction in all of 2011 continuing in 2012.So they in general have taken out a fairly significant amount of cost out of their structure. We certainly like our customers to do well, but at the same time being in the business of lending them capital, we also want them to borrow money from us. And so we really are focused more on them have enough money to pay us, but not so much money that they don’t need us.
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