We are just a few hours away from the start of a holiday weekend. Along with about 50 million other Americans, I am headed to the beach. Not only will it be a great opportunity to spend a few days with my family, it will be a shot at an accurate gauge of the nation’s economy.

In case you did not know, I have spent many, many days plying the nation’s offshore waters in search of anything with fins. It just so happens some of the best fishing grounds are smack dab in the middle of the shipping lanes that point to Philadelphia.

One of my time-killing tactics between bites is to study the shipping traffic coming in and out of the area. There are oil tankers, barges filled with cars and trailers, bulk carriers and an occasional cruise ship or two.

This weekend will be an excellent opportunity to scope out what the nation’s importers and exporters are up to.

If recent reports are accurate and prove to be the start of a long-term trend, there is a good chance I will see a surprisingly high amount of traffic. Rumor has it, the port of San Diego is seeing a strong surge in export traffic. As Asian economies rebound, they need more of our scrap metal, plastics and agricultural commodities.

If you have followed the world’s shipping industry lately, you know the markets have been quite bearish. Shipping lines, with their huge fixed costs and debt loads, have been hit extremely hard as the global economy was flushed out to sea.

A rising tide

But reports today from Excel Maritime (NYSE:EXM) show the bears may be coming on a bit too strong. The company surprised analysts this morning with a quarterly earnings figure of $118 million, well above last year’s Q1 figure of $35.1 million.

Analysts were expecting a per share profit of nine cents. It is no wonder shares are surging today after Excel unveiled a figure of $0.95 per share.

Granted, much of the company’s revenue can be attributed to sound fiscal management, like strong charter contracts and a favorable hedging through swaps. Even so, the news proves that the sector’s bearishness is overdone.

For investors in companies like DryShips (NASDAQ:DRYS), which is trading in negative territory on news of share dilution, today’s action is creating a buying opportunity.

As the credit markets open and the world begins manufacturing and shipping goods once again, the shipping industry will turnaround.

They say a rising tide lifts all ships. It could not be truer for this industry.

If I had to pick just one industry to invest in right now, the shipping industry would be high on my list. I will let you know if my outlook changes next week after taking a first-hand look at the nation’s seas.

Source: Excel Maritime (NYSE:EXM): A Rising Tide Lifts All Ships

This from TFN’s Andrew Snyder:

The two-day rally started yesterday when DryShips (NASDAQ:DRYS) announced it reached a deal to restructure two of its loans. Shares jumped from $5 to $6 yesterday, and up to and over the $7 mark today.

This is great news for an industry that has been reeling in pain after the collapse of the global credit market. After years of expansion in a dire effort to keep up with exploding global demand, the industry is laden with debt.

Ships ain’t cheap

With a bit of light at the end of the credit tunnel, paying for all those new ships may not mean selling them at bargain basement prices, especially now that it looks like the rates shippers charge may be on the rise.

The closely monitored Baltic Dry Index made its biggest one-day move since this mess started last fall. Top rates hit four-month highs of $22,000 and are expected to climb as high as $30,000 in the coming weeks, thanks to increased demand from the Chinese steel industry.

So who are the winners and how do you play this news? First, in addition to dry ships take a look at companies like Eagle Bulk Shipping (NASDAQ:EGLE) and Excel Maritime Carriers (NYSE:EXM). Those two are up by 30% and 25%, respectively.

It sounds like a great, wealth-generating turnaround, but only the folks savvy enough to buy at recent lows are counting their profits. After all, shares of Excel hit lows more than 94% off last spring’s high.  There is plenty of more room to climb.

I would treat this sector like any other speculative investment. There are a lot of variables surrounding the shipping industry and almost all of them depend on a growing global economy. Right now, that could be months, if not years away.

But with credit becoming available and shipping rates rising once again, there is hope. At this point, the reward may not have overpowered the significant risk of selected industry bankruptcies, but we are getting much closer. As soon as more news of debt restructuring hits, you should gobble up all the shares your speculative portfolio can handle.

There is a good chance we are witnessing a strong turnaround in the indicative sector.

Source: The shipping industry stays afloat