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Shipping Strategies – What is new?

Shipping Strategies – What is new?. The shipping markets over the last 4-5 years have been unparalleled – although a lot of uncertainly now Much more new capital has come to shipping – from new sources – although financing is harder now

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Shipping Strategies – What is new?

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  1. Shipping Strategies – What is new? • The shipping markets over the last 4-5 years have been unparalleled – although a lot of uncertainly now • Much more new capital has come to shipping – from new sources – although financing is harder now • The world economy is in turmoil, even recessionary – although most shipping segments are still strong! • More new talents to the industry – although experience and judgment are still key! • Entrepreneurialism, professionalism PL-Strategic Issues in Shipping Companies - CFIE

  2. New innovations in the industry: • We see new ship types- Ultra large containerships • Large LNG • The Freight Derivatives markets • FFAs • Stocks • Developments on the Terminals side • Shipbuilding innovations! PL-Strategic Issues in Shipping Companies - CFIE

  3. Here is what is new • Specialization, Decomposition • Better understanding of the risks now • Forecast, understand each factor! • Cost-of-capital must be the lowest possible to be competitive • Scale advantages! • Fundamentals of seaborne trade has shifted • Containerization • World manufacturing in China • World trade strong-everywhere! PL-Strategic Issues in Shipping Companies - CFIE

  4. Added recognition of the importance of strong business focus • Unbundling of traditional integrated shipping companies • Managerial cognitive limits, re. complexity • Lower interaction costs PL-Strategic Issues in Shipping Companies - CFIE

  5. Four archetypes of “specialist firms” Archetypes ofSpecialistFirms StrategicFocus Source: Adapted from Hagel III, J. and Singer, M., “Unbundling the Corporation,” Harvard Business Review, March–April, 1999, p. 135. PL-Strategic Issues in Shipping Companies - CFIE

  6. The specialist movement within the shipping industry Archetypes ofSpecialistFirms StrategicFocus PL-Strategic Issues in Shipping Companies - CFIE

  7. Owing steel vs. using steel PL-Strategic Issues in Shipping Companies - CFIE

  8. Portfolio Strategy • It all comes together in a portfolio strategy • unrelated elements • Step one • Financial exposure/leverage decisions • bank leverage? • degree of risk OK? • Step Two • assets/instruments • ship sizes/charterers • correlation among assets (high or low?) PL-Strategic Issues in Shipping Companies - CFIE

  9. Portfolio Strategy – cont. • Step Three • Time exposure • Allocations within ship types re. charter lengths/expiries • is the charter coverage ok • long vs spot; in vs out PL-Strategic Issues in Shipping Companies - CFIE

  10. Portfolio Strategy – cont. • Seaspan sees another stakeholder balance-based approach to portfolio strategies Shipyards Customers Banks Manage-ment Seaspan Investors • Long-term interests of all to be covered • Balanced! • Direct relationships, no intermediaries • One must have the financial and operating capacity to make this realistic PL-Strategic Issues in Shipping Companies - CFIE

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