DryShips Inc. (DRYS), Diana Shipping Inc. (DSX): How the “Golden Waterway” Could Help Shippers Cash In

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What’s the catch?

At the risk of coming across as cynical, to say the least, I have to admit that the global warming phenomenon benefits shipping magnates. However, it’s not all sunshine and unicorns, since a few weak spots could still prevent Arctic shipping from taking off.

Even though ice-class ships are capable of traveling the Arctic routes during the summer months, the iciest parts of the NSR still often require the use of specialized, icebreaking-equipped vessels, which are few in number. Russia uses icebreakers to escort ships in exchange for fees that exceed Suez Canal tolls.

In addition, the lack of shore-side infrastructure and the inadequate means of rescue in the Arctic region, raise safety concerns that drive up insurance costs.

That being said, I think that, as soon as Russia wraps up its regional development projects, the NSR could offer a viable and cost-effective alternative to the Suez Canal. Diana Shipping is definitely worth keeping tabs on for upside returns. I expect the company to make good use of this shortcut in hopes of reducing its break-even levels.

The article How the “Golden Waterway” Could Help Shippers Cash In originally appeared on Fool.com.

Fani Kelesidou has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 

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