Rotterdam: John Su, the founder and CEO of dry bulk player Erasmus Shipinvest, admits that the immediate outlook for the sector he is in is very grim.
“The dry bulk shipping market is experiencing the lowest level for the past 30 years and unfortunately there’s still a massive orderbook and weak demand outlook due to the financial crisis worldwide,” Su says, adding: “It is hard to see a dramatic change of market tonnage balance in the short term.”
Su has been preparing for this harsh reality for a number of years. He now believes demand-wise the market has hit rock bottom.
‘‘We are seeing the collapse of the bubbles from the super cycle in the shipping industry. When we saw the spark in bulk shipping in 2010, people thought the crisis in shipping was over but they were wrong. A lot of the shipyards made orders on their own account. We will see major bankruptcies in private yards,’’ Su reckons.
Following graduation from Dalian Maritime University, Su has nearly 20 years experience in shipowning, operating and investment fields in dry bulk and container shipping in Asia and Europe.
As if rates were not bad enough for dry bulk owners, the regulatory avalanche hitting shipping will make profits even scarcer.
“Today, owners are facing more and more challenging regulations which certainly increases the running costs of the ships in such a tough market, and it’s also not easy to maintain reliable and experienced crew sources.”
However, Su still has great plans to increase his fleet capacity.
The company currently runs 10 bulkers – a mix of panamaxes, kamsarmaxes and ultramaxes.
“We intend to double the fleet size in the coming three years during the low cycle of the dry bulk market,” Su says.
Most of Erasmus’s vessels are fixed for long-term (5-7 years) time-charter employment.
Despite the gloomy market conditions, Su still has achieved three consecutive years of profit and is on track to make it four out of four soon.
Next up, Su has ambitions to tap the public capital markets to raise funds for fleet growth.
“We have already identified a series of promising prospects and we look forward to implementing them at the right time,” the serial shipping entrepreneur concludes.