Paragon report examines dry bulk shipping
Dry bulk shipping stocks have struggled early in the New Year as the continued oversupply of shipping vessels weighs on pricing. Meanwhile, concerns of an economic slowdown in China have also weighed on the sector. Helping to pull down rates early this year, China recently allowed one of Vale's vessels to dock earlier this month.
A Paragon Report examines the outlook for companies in the Shipping Industry and provides investment research on DryShips, Inc. and Genco Shipping & Trading Ltd. Access to the full company reports can be found at: www.paragonreport.com/DRYS and www.paragonreport.com/GNK.
The Paragon Report provide investors with an excellent first step in their due diligence by providing daily trading ideas, and consolidating the public information available on them.
The Baltic Dry Index has slipped to its lowest levels since August as a drop in market activity following the Christmas and New Year's slow period weighed on the cost of shipping dry bulk goods. The Baltic Dry Index slid to 1552 on January 4, 2012 compared with 1856 before Christmas.
The Baltic Dry Index includes pricing for Handymax, Supramax, Panamax, and Capesize dry bulk containers. Capesize, Panamax, Supramax and Handysize were 2768, 1599, 1140 and 566 respectively.
DryShips, through its subsidiaries, engages in the ownership and operation of dry bulk carriers and drilling rigs that operate worldwide. In its most recent quarter, dry bulk carrier revenue at DryShips was $88.6 million, down 23 percent year over year. Time charter equivalent revenue was $85.5 million, down 20.9 percent year over year. Time charter equivalent (TCE) was $27,011, down 15.3 percent year over year.
Genco Shipping & Trading Limited engages in the ocean transportation of dry bulk cargoes through the ownership and operation of dry bulk carrier vessels worldwide. Last month the company announced it has entered into separate agreements to amend or waive provisions of its $1.4 billion revolving credit facility, its $253 million senior secured term loan facility and its $100 million term loan facility.
Edited by Kevin Scarpati
Elon Musk's Boring Co. planning wider tunnels for freight
Elon Musk’s drilling outfit The Boring Company could be shifting its focus towards subterranean freight and logistics solutions, according to reports.
A Boring Co. pitch deck seen and shared by Bloomberg depicts plans to construct wider tunnels designed to accommodate shipping containers.
Founded by Tesla CEO Musk in 2016, the company initially stated its mission was to offer safer, faster point-to-point transport for people, particularly in cities plagued by traffic congestion. It also planned longer tunnels to ferry passengers between popular destinations across the US.
The Boring Co. completed its first commercial project earlier this year in April. The 1.7m tunnel system is designed to move professionals between convention centres in Las Vegas using Tesla EVs. It says the Las Vegas Convention Centre Loop can cut travel time between venues from 45 minutes to just two.
Boring Co.'s new freight tunnels
The Boring Co.'s new tunnel designs would allow freight to be transported on purpose built platforms, labelled as “battery-powered freight carriers”. The document shows that, though the containers could technically fit within its current 12-foot tunnels, wider tunnels would be more efficient. Designs for a new tunnel, 21 feet in diameter, show that they can comfortably accommodate two containers side-by-side, with a one-foot gap between them.
The Boring Co.’s new drilling machine, dubbed Prufrock, can tunnel at a rate of one mile per week, which is six times faster than its previous machine, and is designed to ‘porpoise’ - mimicking the marine animal by ‘diving’ below ground and reemerging once the tunnel is complete.
Tesla’s supply chain woes
Tesla is facing its own supply chain and logistic issues. The EV manufacturer has raised the price of its vehicles, with CEO Musk confirming the incremental hike was a result of “major supply chain pressure”. Musk replied to a disgruntled Twitter user, confused as to why prices were rising while features were being removed from the cars, saying the “raw materials especially” were a big issue.
Car manufacturing continues to be one of the industries hit hardest by a global shortage in semiconductor chips. While China’s chip manufacturing levels hit an all-time high in May, and the US is proposing a 25% tax credit for chip manufacturers, demand still outstrips supply. Automakers including Volkswagen and Audi have again said they expect reduced vehicle output in the next quarter due to a lack of semiconductors, with more factory downtime likely.
Top Image credit: The Boring Company / @boringcompany