The document describes the shipping cycle which has four stages: trough, recovery, peak, and collapse. It explains each stage in detail. The trough is when declining business activity bottoms out. In recovery, supply and demand start to equalize and freight charges increase. At the peak, supply and demand are almost equal but rates are very high. The collapse occurs when supply exceeds demand, causing freight rates to decline.

1. SHIPPING CYCLE
• BRIONES SANTIAGO
• CASTRO HENRY
• ESCALANTE DANIELA
• MORA GENESIS
• SAA KAREN
• VILLANUEVA MADELYNE
Ing. Max Galarza
Grade: 9

2. SHIPPING CYCLE
The shipping cycle is a process that explains how shipping
companies and freight charges respond to supply and demand.
The cycle seeks to explain what affects the selling price of ship
fleets and what types of ships sell during slow business periods.

3. TROUGH
RECOVERY
PEAK
COLLAPSE
SHIPPING CYCLE

4. TROUGH
 A trough is the stage of the economy's business
cycle that marks the end of a period of declining
business activity and the transition to expansion.
 In general, the business cycle is said to go through
expansion, then a peak, followed
by contraction and then finally bottoming out with
the trough.

5. RECOVERY
 In this stage, supply and demand move toward
equilibrium.
 Freight charges begin to increase, eventually
surpassing operating costs.
 Shipping containers begin to move out of the
trading ports, as demand stimulates new orders.
 During this stage, optimism about the market
remains shaky.

6. PEAK
 At this point, the shipping freight rates
become quite high — often double or triple
the amount of fleet operating costs.
 The levels of supply and demand are
almost completely equal.
 Quite a bit of market pressure occurs
between supply and demand levels, which
could cause the peak to fall at any time.

7. COLLAPSE
 Occurs when supply levels begin to exceed
demand. Freight rates begin to decline
during a collapse.
 Shipping containers and fleet begin to
accumulate in trading ports once again.
 Although the cash flow of shipping
companies may remain at high levels, ships
begin to slow down their operations.

8. BIBLIOGRAPHY
http://www.ehow.com/info_8466520_four-stages-shipping-cycle.html
http://www.investopedia.com/terms/t/trough.asp