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Inspired by the frightening reading that was the annual report of a to-remain-unnamed shipping company, we welcome you to our series of blogs about the risks involved for shipping companies and the economic impact on the sector. These are rated 18 for scariness!

Through the recession we've all been learning a lot about how global financial conditions impact shipping – we'll be explaining over the next few articles quite how far reaching one company's annual report sees them. Bear in mind, if you will, that publicly listed companies are obliged to bring to their shareholders' attention the industry and company-specific risks that they face.

After reading the incredibly long list in this particular company's annual report, running to pages and pages and pages, it's tempting to ask: Who in their right mind would ever invest in a shipping company?

The first thing we should point out is that each of the hundreds of risks listed must have an 'impact statement' along the lines of "…may lead to reductions in charter rates and vessel values" and "…could cause the market value of our shares to further decline." Confidence-inspiring eh?!

Probably none of this will educate you, dear reader, but once we reach the end of our little series of blogs on this topic, we'll summarise by reminding you quite how many risks we've touched on. And then we shan't blame you if you start looking for a job outside of shipping!

So, the first thing we'll touch on is that there are several volatile factors affecting the economy – which apply to shipping as to any other industry – that are out of our control, yet can impact on, for example, the supply and demand for vessels. This can include natural disasters and weather conditions, changes in vessel production or global commodity production, political conditions and currency exchange rates.

What about vessel casualties? The price of materials? Port congestion? These can all add up to affecting the position of the shipping industry in the global market.

With weakened economic conditions, the future of credit markets is uncertain, and this possibly means reduced access to global credit.

It seems a gloomy picture to paint, but with extra pressures from hostilities between territories, declines in charter rates and countries unable to refinance their debts, it's important for shareholders to fully understand just how risky their investment is. Quite!

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