ABSTRACT
Market cycles pervade the shipping industry. As one shipowner put it: ‘When I wake up in the morning and freight rates are high I feel good. When they are low I feel bad’.1
Just as the weather dominates the lives of seafarers, so the waves of shipping cycles ripple through the financial lives of shipowners. Considering the sums of money involved, it is not surprising that they are so prominent. Take the transport of grain from the US Gulf to Rotterdam. After operating expenses a Panamax bulk carrier trading spot would have earned $1 million in 1986, $3.5 million in 1989, $1.5 million in 1992, $2.5 million in 1995 and $16.5 million in 2007! A new Panamax would have cost $13.5 million in 1986, $30 million in 1990, $19 million in 1999 and $48 million in 2007.
