This is English ver. of original Japanese article below;

The shipping industry is another industry in Japan that has undergone significant changes in the past few decades, although Japanese companies used to lead the way in the past, similar to the steel and oil industries.

For oil industry, please find another post below for your reference.

First of all, there was a heavy oil leak due to a cargo ship owned by a Japanese company that ran aground off the coast of Mauritius. This will lead to a significant environmental impact on the country's coast. We pray for a speedy recovery.

The shipping industry had been building many dry bulk vessels and other types of ships in response to the surge in demand for commodities, even before GFC (Global Financial Crisis), but after the collapse of Lehman Brothers and subsequent GFC, there was an excess of supply and capacity in the industry.

According to some articles, IR materials and stock price websites of the three shipping companies in Japan, Kawasaki Kisen (or K-Line), one of three large Japanese shipping companies that used to own a large number of dry bulk carriers, will aim to become profitable again through a combination of asset sales, while the earnings from its core shipping business remains subdued and they refinance subordinated debt funding from banks. Nippon Yusen, another Japanese shipping company with relatively well-balanced in terms of sales and profits, is also expected to make some profit in this fiscal year, but the main reason behind it is due to air transportation that saw the spike in freight rates because of irregular flights and COVID impact. In other words, the company is barely at"break-even" for their own shipping business.

Looking ahead, we may see temporary ups and downs in freight rates, and I believe that this is an industry in Japan that will survive, yet there are some strong headwinds in the form of trade friction between the U.S. and China, freight rate competition due to the many shipping competitors, and the need for continuous cost-cutting. On the back of these factors, I would not be surprised to hear if there were further reorganization in the medium to long term.

Also, the Baltic Shipping Index seems to be the key to looking at this industry. I don't know about the components of the index. Having the high volatility, it is said to indirectly indicate the supply and demand for the movement of goods, hence it is also important to monitor for the direction of the index as a leading indicator for the global economy. (It seems to have been on a slow downward trend recently, so the economic recovery may not be as strong as it should be.)

Even if the global economy recovers, there are certain subsectors of shipping that are unlikely to recover soon. One of them, I think, is tourism, or so-called cruise ships. Basically, relatively old passengers spend a lot of time traveling while staying inside for most of it. Older generation having higher risk of getting COVID, thus it's not the kind of tourism that you would actively buy in for " With Corona era". Famous cruise lines across the board seem to be expecting an 80-90% drop in sales, and I don't see about potential rebound in this subsector anytime soon.