Over the past few weeks, I’ve had the chance to highlight the results of our annual Who’s Making Money report on container line profitability to a variety of audiences.
One of the themes as we talk about this industry is that container shipping is often misunderstood, even by those intimately involved in it. Investors are one of those groups that struggle to get a handle on the industry. But I’ve also come to believe there’s a segment of the investor population that understands container shipping too well.
Let me explain. To those who don’t understand the container shipping industry, it can seem a mysterious business governed by rules that don’t really apply to other sectors where investors can plant their money.
It can seem glamorous, tied to international trade (which is seemingly always growing), and attractive at first glance, due to the relatively few companies that control the global market.
But investors who understand this industry see another side — its capital-intensive nature, vulnerability to price wars, and lately, reliance on trades where growth is decelerating.
In short, there is a continuum of investors when it comes to container shipping — knowledgeable and not so much. Until container lines focus as much of their attention on investors as they do on competitors, this mindset is not likely to change anytime soon.
Why would anyone invest?
