The Clarksea Index – The Heart Rate Monitor of the Shipping Industry


The Clarksea Index – The Heart Rate Monitor of the Shipping Industry

I use the Clarksea Index as the starting point for most presentations. It is the one slide that clearly shows the current state of the shipping industry. The Clarksea Index acts as the heart rate monitor of shipping, covering all the main sectors. As the name suggests, the Clarksea Index is produced by Clarkson Shipping Research (www.clarksons.net), and was developed by Dr Martin Stopford and Cliff Tyler. The Index shows the average earnings in $/day of the whole fleet. To do this is takes into account the average earnings that week of VLCCs, Suezmax and Aframax in the Tanker sector. In the Dry Bulk sector it includes the average earnings of Capesize, Panamax, Handymax and Handysize. The Liner sector is represented by 1700-TEU Containerships and the Gas sector by VLGCs. The Index is weighted by the number of ships in each of the sectors.

The Clarksea Index goes back to 1st Jan 1990, when it was assessed as $17,683/day. Last week the Clarksea Index reached $11,625/day and between 1990 and last week has averaged $16,743/day. So straightaway we can see the shipping industry today has a sluggish pulse, due to too rich a diet in the boom years. The chart shows the Clarksea Index since its inception and reveals the boom years were far beyond anything experienced before.

The current trough in the shipping cycle is not as dire as you might think. The second chart shows that on average 1992 was much worse, less than $10,000/day. Or if you are pessimistic, you could say that with half a year to go, 2012 could also dip below $10,000/day on average. However you look at it, we are bumping along the bottom of the trough of the shipping cycle. Indeed, I didn’t expect the trough phase to last this long, and a year ago I was expecting the end 2012 to be around the long term average of $16,500/day.

Today, I feel we will be lucky to have a Clarksea Index of $12,000/day at the end of the year. This would put 2012 in popular company.  A Clarksea Index between $10,000/day to $12,000/day range has appeared the most frequently, accounting for nearly a quarter of the weekly results between 1990 to the present day.

Author: Craig Jallal.

Copyright Craig Jallal. All Rights Reserved.

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About Craig Jallal
A shipping analyst whose feels the need to comment on the industry.

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