Why are so Many Cruise Lines Selling Off their Ships for Scrap?
The COVID-19 pandemic has not only effected blue collar workers and your everyday joe, but also the large corporations, especially those in the travel industry. One question many are asking these days is why are so many cruise lines turning their ships in for scrap instead of keeping them for the return of cruising? Well hopefully today we can answer that question.
To answer this question, we must first look at what certain leading countries have been doing during the pandemic do prop up their economy preventing a collapse. The United States has used their government spending to bail out large companies, so that they can be there to help the country return to normal when the time comes. Australia used their government spending to help their housing market, and china decided to build bridges.
The decision by the Chinese to utilize their spending to beguiled bridges and increase their infrastructure real is a huge win. Not only will they come out of the pandemic with new bridges and opportunity for easy, fast national travel, but they also create jobs with this construction.
So what does the Chinese building bridges during a pandemic have to do with the cruise industry? Well, building bridges requires steel, and when the demand is high enough for scrapped steel, and demand is low for cruising because the travel industry is shut down, the decision to sell ships for a quick buck becomes pretty easy to make. If you think about it, it makes sense for these companies like carnival, princess, holland America, p&o and others to get rid of their old ships while their not in use, and essentially costing them millions of dollars.
The cost of an empty ship is very high and endless months of these vacant steel behemoths adds up. The cost of labor, fuel, food, docking fees, and countless trifling expenses add up, and cashing out some of the aged ships in a fleet where the new popular ships mainly attract the crowds, simply makes sense.
Though its sad to see some of the ships where we’ve made some great memories aboard, it does make sense for these companies to do this, and in a way, it should be a good sign for a strong return to normalcy as we are all hoping for.
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