Economics & Education (Apr 2024)
ANALYSIS OF SHIPPING FINANCING SOURCES IN THE CONTEXT OF UNCERTAINTY
Abstract
The article is aimed at identifying the peculiarities of financing shipping under conditions of uncertainty and analysing the sources of financing of shipping companies. Methodology. This study is based on the analysis of trends in the socio-economic, military-political and environmental situation, which cause global uncertainty and limit the ability of shipping companies to obtain external financing. The article compares the Petrofin Global Ship Finance Index with the dynamics of seaborne trade volumes for the period from 2008 to 2022, determines the correlation coefficient of these indicators and identifies the leaders among the banks-creditors of the shipping industry in terms of the volume of shipping loans in the loan portfolio. Results. The study shows a direct correlation between the shortage of shipping financing and the three main forms of global uncertainty. The results of comparing the Petrofin index with the growing dynamics of seaborne trade indicate a decrease in the role of banks and an increase in the role of alternative sources to cover the shortfall in shipping financing, such as raising resources from capital markets, financial and leasing companies, private equity funds, private equity and venture capital investments, investment platforms, hedge funds, state capital, and capital from international organisations. The main reasons for the change in the structure of shipping companies' funding sources are the conservative lending policy of banks in the crisis, tighter regulation, higher interest rates, lending only to borrowers with a positive credit history, and increased loan collateral requirements. Instead, the advantages of alternative sources of financing are flexibility, speed, less regulation compared to banks, the ability to provide large volumes, new types and forms of financing, and more competitive rates. Practical implications. The volatile external environment complicates the process of finding financing for shipping companies, which directly affects fleet renewal, the increase in the cost of ship construction and refurbishment, and the digital and environmental modernisation of shipping. Therefore, shipping companies should diversify their sources of financial resources, have a margin of safety in equity, and redistribute their borrowing portfolio between bank loans and alternative forms of financing. Value/Originality. The analysis of traditional and alternative sources of financing for shipping in the context of macroeconomic instability allows to identify key trends in investment policy towards shipping companies, to identify the specific needs of shipping companies in the face of various forms of global uncertainty and to outline the features of the most common sources of financing.
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