Shipping gets that Sinking Feeling

setmefree2

Shipping gets that sinking feeling

When the world economy tanked last year and global trade juddered to a halt, nothing fell further or faster than freight rates in the world shipping industry.
And within that mix of container lines, tankers and dry bulk cargoes such as iron ore, it was, not surprisingly perhaps, this last one that fared worse. In little more than six months, it fell by more than 90%.
Now, however, it is well off the bottom. Iron ore is moving again, as are other bulk commodities, as global industry picks itself up off the floor and begins a tentative restocking.
But don't get too excited. Most of these cargoes are heading for Asia as China, in particular, benefits from a massive and unprecedented domestic economic stimulus.
It is an encouraging sign, but after a long cold winter any sign of spring is encouraging and we know from long experience in this country that warm spring is no guarantee of a decent summer. That said, you would expect the shipowners and charterers at least to take comfort from what is going on.
But if that is what you expected you would be wrong. At the Baltic and International Maritime Council (Bimco) shipping conference in Athens this week, where owners, users and builders meet, the mood was one of continued gloom. It turns out that of all the industries in the world facing problems of overcapacity in the face of declining demand, none is in worse shape than shipping.
The motor industry may be on its knees, the airlines flying half-empty and the leisure industry wondering where the next customer is coming from, but shipping has an overcapacity problem worse than anything in the past 50 years. Even in bulk freight they are gloomy.
Rates have indeed hardened, they say, but in a few months' time there will be so much new capacity launched that they will fall back down again.

http://www.thisislondon.co.uk/standard-business/article-23703468-details/Shipping+gets+that+sinking+feeling/article.do


Thought posters interested in shipping would be interested in this article from Anthony Hilton

dopester

All the single hulls in the world could be scrapped this year and there would still be overcapacity. And don't set your hopes too high on the recent fillip in the oil price indicating rising demand. Oil stocks currently are so high it will take two years of Opec cuts, if it can make them stick, just to work through the surplus.

That is a very good article. So much mindless bubble-head thinking in the world. A few people here are expecting oil prices to zoom upwards. Just can't see that myself.

The system needs a purge of all those who think money and profits are just magically created for all out of nothing, and that such boom-times would always continue, with younger generations there to pick up the tab.

Too many people still in positions of power where they've gone about living-it-up to total excess, drawing wealth which wasn't really earned in a skewed reality, and ruining it for younger generations.