Genco Shipping (New York Stock Exchange NYSE: GNK) owns 33 dry bulk vessels^[1], ships used to transport non-liquid goods such as grain or coal. The company has grown at a breakneck pace.^[2][3] Genco's ships, which have a total shipping capacity of approximately 2,615,000 deadweight tons (dwt),^[1] move mostly iron ore, coal, grain, and steel products. Genco charters its ships for periods of one to four years, and so only assists other companies in moving those goods. As Genco charters its ships for movement along major international shipping routes, it exposes itself to competition from the 1,300 or so other dry bulk vessel shipping companies and owners operating in the world.^[4]

The health of the dry bulk shipping industry, and all companies within it, are tied to the health of China's economy.^[5] With China on the rise, shipping rates have been skyrocketing.^[6] Unfortunately, a surge in new shipbuilding is raising demand for ship maintenance and repair services, as well as moderating potentially high charter rates. Worse yet, that surge is going to continue for at least the next couple of years. Ironically, while high demand for steel products has pushed up charter rates, it has also made new shipbuilding more expensive.

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