It is not just amateur investors that have a difficult time finding investment opportunities that are dependable and profitable. Investment seekers, both experienced and affluent investors, from all over the world struggle to uncover investments that fall within their tolerance for risk, and help them meet their long-term investing goals. For most, they have a genuine concern about the poor performance of traditional investments, which includes fears that many stocks are overvalued and therefore a dangerous investment. The bond market is also troubling given their exposure to interest rate hikes and the devastating effects of inflation.
One solution for investors is to focus their attention on industries that have given a strong performance and have inspired investment in recent years. For example, Transportation and Manufacturing are two industries that have experienced notable growth since the global financial crisis crippled the world in 2008 and 2009. Within each well-performing industry, investors will discover sectors that offer them exposure to profitable marketplaces. In this case, investors who invest in containers gain exposure to the Transportation industry by way of the shipping sector.
Equally as important as the industry/sector you choose, is the geographic location of the investment offering. Using the example from above, both Transportation and Manufacturing are performing incredibly well in Asia, particularly in China, India, Vietnam, and Malaysia. Making an investment in these industries, and in these geographic areas, is likely to deliver the best, safest investment returns; given the long-term outlook for demand in the region.
Finding safe, profitable investments requires a steadfast commitment and a strong determination on the part of investors. Investment-seekers will not find them lying in plain view on the surface, for all to see. Deep investment research is the only sure way to identify the new investments, that are worthy of being added to your investing portfolio. This is the case, regardless of whether you are an amateur, experienced, or affluent investor.
2017 is shaping up to be container shipping’s best year in nearly a decade. With freight rates on the rise and operating costs on the decline, container lines can expect a boost in shipping profits now and in the future. This outlook is inspiring more interest and investment in the industry.
There was a time when the cost to transport a container was so low that container lines were losing money with each voyage. This resulted in losses for a majority of container shipping leaders in 2016. Maersk Line, the industry’s leader, reported an annual loss of $376 million for 2016. In contrast, the company has forecast a shipping profit of one billion dollars for 2017.
In late June of 2017, the Shanghai Containerized Freight Index (SCFI) experienced a growth spurt, nearly doubling the SCFI rate from a year earlier (2016). Influenced by a new round of FAK (freight all kinds) rate hikes, and a disciplined intended implementation of peak season surcharges (PSS), spot rates from Asia to North Europe gained 15.1 percent; rising to $1,015 per TEU. The SCFI component for the United States’ West coast saw rates soar 26.2 percent to $1,378 per container. This has meant a return to profit for most container shippers.
The last couple of years (2016, 2017) have seen a flurry of mergers, alliances and partnerships between container shipping leaders. In the interest of survival, one time rivals have found common ground and reached partnership agreements. This has helped them to lower operating costs on major trade routes and reduce competition throughout the industry.
With volatility in the shipping sector seeming to be a thing of the past, institutional and private investment is returning to the industry. For one, there is an urgency to invest in containers to meet the rising demand for shipping services. In late July 2017, COSCO announced that it will invest more than two-hundred million dollars to purchase used shipping containers to add to its fleet. They are not the only ones, other shipping leaders are investing in containers too
Over the last decade, the container shipping sector has undergone a positive transformation. In doing so it has emerged as a stronger, more profitable industry and a better investment opportunity for private investors.