The purpose of this thesis is to investigate what kind of risk Lauritzen Bulkers A/S could meet in their every day ”life” in the shipping business. Lauritzen Bulkers A/S has 125 years of experience and a large handysize fleet, achieved through a pooling cooperation with Island View Shipping and Investment Group Denmark. They also have a large new building program that requires a lot of capital, first paid by equity, later by loans in the assets. The freight market experienced during the financial crisis a large fall of nearly 91%. In late 2009 the market recovered and is now just above one third of its peak, during the summer of 2008. The market seems to evolve further and offers GDP growth, an increase in cargo volume, but also an increase in the total fleet. An equation which will affect the shipping industry and Lauritzen Bulkers for the next years to come. The solution for Lauritzen Bulkers A/S to reduce their risk is within the four different risk instruments: Spot, COA, T/C and FFA. The timing of the use of these instruments is crucial for the effect of risk minimization. Each of them has their own time frame and they work with different kinds of risk attached. The timeframe spans from a few weeks and up to a 15 year period. Lauritzen Bulkers A/S should therefore try to keep an eye out for fluctuations which can be used to reduce risk. It is finally concluded by this thesis that LB should make further steps that can empower them against future risks, as the market by 2014, looks to be a bit unsafe. They have already taken some risk coverage, but the recommendation is to focus even more on reducing their risk.
|Graduate Diploma Marketing Management and International Trade, (Diploma Programme) Final Thesis
|Number of pages