ECONOMY

Car carriers prevail

A common question is how one can best invest $100 million in shipping. The answer necessitates a close look at orders in various categories of vessels over the last five years. The first observation is that the percentage of orders has more than doubled: In March 2002 the percentage of orders was equivalent to 15.1 percent of the entire fleet, while in March 2007 it stood at 33 percent. The surprise leader in investments is car carriers. At the end of the 1990s, investment in this type of vessel was relatively small, with orders in 2002 accounting for no more than 6.5 percent of the entire fleet. However, in the last five years there have been many plans for growth in every direction, driven by globalization. Maritime transport has seen a rise of more than 8 percent annually, pushing order books up to 31.4 percent of the fleet, or four times more than in 2002. Investment in Capesize vessels came second, followed by that in liquefied petroleum gas (LPG) ships. Investment in Capesize ships had remained stagnant for a long period, but after the considerable upgrading of steel production in China and the massive flow of raw materials, orders have quadrupled, reaching 35.2 percent of the entire fleet. LPGs have staged a significant rebound since 2002, with orders reaching 40.9 percent of the entire fleet in March 2007. Behind LPGs come Panamaxes and Handies. In 2002, orders for Handies shrank to 4.1 percent of the global fleet, but these have tripled to 12.6 percent, driven mainly by activity in Asia. The general conclusion is that preferences turn in the direction of vessel types, demand for which has for some reason increased. So, perhaps those for which there is currently low demand will be much more profitable in the next five years.