| Summary: | Transportation of logs in sea is mainly performed by log carriers, and its market is termed as the logger shipping, which is a specialised segment under bulk shipping market. Like any other shipping sectors, in bulk shipping, the interplay of market demand and supply determines the profitability of the market. This project seeks to examine these market fundamentals of logger bulk shipping in East of Suez. From this examination, it determines the strength of the market and provides a holistic overview of the logger bulk market from 2012 to 2016.
Currently there have not been substantial studies done on this niche market, probably due to its small size, allowing it to draw only limited attention. Therefore, this project aims to breach the gap by further analysing the market profitability based on different investment scenarios. Using Net Present Value (NPV) sensitivity analysis as a decision making tool, we compare the prospects among investing in new ships, second hand ships of different ages and chartering in ships. Investment recommendations can thus be made.
At the end of our study, we come to the conclusion that the freight rate will improve slightly but yet be hovering at a weak range. It is thus not recommendable to venture into this segment. Nevertheless if a choice has to be made among different investment options, buying a 15 year old second hand ships will be recommended.
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