Distressed Asset Investor Wilbur Ross Thinks the Shipping Industry Is Near a Bottom
One such topic is the shipping industry where Ross has been making investments. Ross explains why he is investing in shipping:
- Shipping is an integral part of the world economy; it accounts for 80% of the movement of goods around the globe.
- World trade is growing faster than GDP.
- The shipping industry got into trouble in 2007 when shipping rates hit bubble levels, attracting a massive amount of capital being invested in new ships to take advantage of these rates.
- It takes several years for ships to be built, and those ships are now hitting the sea and the industry finds itself with far too much capacity.
- This will be a self-correcting phenomenon because it is now very hard to obtain financing to build new ships, and what is now overcapacity will disappear over time.
- Ross thinks the industry is near to the bottom now, although he admits forecasting such things is very difficult.
- Ross has invested in two private companies in the shipping industry.
Below are the links to the interview.