Note: This article was originally published on January 22nd on Value Investor's Edge, a Seeking Alpha subscription service.
Overview
Before we begin, it's important to have an understanding of shipping expenses.
Now if this particular segment is a bit too technical, don't worry, because it is explained in a much more digestible manner further on in the article. But for those looking for an answer utilizing accepted industry fundamentals and verbiage, this part is for you.
Shipping expenses fall into two categories: fixed daily costs and variable costs.
Fixed daily costs occur regardless of