Box Ships Inc (TEUFF)

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Leaky Ships: Ocean Carriers in the Age of Profitless Shipping
Ryan Petersen Ocean Freight

“Should you find yourself in a chronically-leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.” – Warren Buffett

Global shipping rates are astonishingly low right now; it’s possibly never been cheaper to ship goods around the world, ever. The China Containerized Freight Index has been going lower and lower.

china-containerized-freight-index-3:15 2

Source: Shanghai Shipping Exchange

As of March 2016, it costs around $400 to move a 40-foot container from Shenzhen to Rotterdam, which is barely enough to cover the cost of fuel, handling, and Suez Canal fees. Here’s some more context. Let’s say that you want to travel for a year; it’s cheaper to put your personal belongings in a shipping container as it sails around the world than to keep it at a local mini-storage facility.

No ocean carrier can earn returns above its cost of capital at these price levels.

Is here really someone who thinks, the company can pay back a single $ to the banks in 2017?