As Shut Down TRS correctly points out, the international shipping industry has been in the doldrums for at least the last 5 years. Essentially, the major shipping lines are slowly bleeding to death.
Don't just believe me? Have a look at the news.
The Economist - "Why the Baltic Dry Index is at an all-time low"
10 Mar 2015
"The current malaise is much more a result of the overall supply of ships than a harbinger of doom for the world economy. In the run up to the financial crisis, as the world economy boomed and rates hit new heights, shipowners ordered a huge tonnage of bulk carriers. These hit the waves during the post-crisis slump that was already weighing heavily on demand for ships, which pushed charter rates lower still."
Wall Street Journal - "Container Ship Operators Face ‘Overcapacity Crisis,’ Report Says"
8 Oct 2015
"The new Drewry report is one of several that are raising alarms about the financial state of ocean carriers as they continue to incorporate new vessels that are some 40% larger than the biggest ships were less than 10 years ago. The scale of the megaships has led many large shipping lines to combine services under what the industry calls alliances."
Source: http://www.wsj.com/articles/container-ship-operators-face-overcapacity-crisis-report-says-1444329882
The Telegraph - "Shipping industry braced for storm to blow long and hard"
14 Nov 2015
"The shipping industry is battening down the hatches for a global economic storm that could last years. The slowdown in China, Europe’s anaemic recovery and the failure of other emerging markets to live up to growth expectations is having a devastating effect on the global maritime industry, which carries 65pc of the world’s trade."
Source: http://www.telegraph.co.uk/finance/newsbysector/industry/11996019/Shipping-industry-braced-for-storm-to-blow-long-and-hard.html
Even the recent shipping forecast from Moody's is cautiously guarded about the outlook of shipping.
Moody's Investors Service - "Global shipping outlook stable; conditions vary in each sector"
2 Nov 2015
"Moody's says that downside risks remain high and would consider
changing the outlook to negative if signs emerged that the growth in shipping
supply will exceed demand growth by more than 2%, or that
aggregate EBITDA will decline by more than 5% year over year."
In any case, this simply shows that the shipping business is very much dependent on global economic conditions. Things have not been that great for the global economy. And when people holding back and not buying any goods, what goods are there for the ships to deliver?
Alex Tan / STR has not been honest in their assessment of the NOL news. He has very deviously hidden half the truth of the situation from his readers, painting a picture that implies that the failure of NOL to turn a profit is solely due to the incompetence of its CEO.
For a business that is heavily dependent on global trade, can a CEO really have that much options to try to turn the business around?
Since Alex Tan is so "clever", can he suggest what should have been done? Or perhaps tell us what the NOL-CEO did not do to land the company in the red?
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