Western malaise only mildly infectious
Why should the East suffer from Western 'illness'?
The West consumes, the East produces, the population split is 1 billion vs 6 billion, and yet it seems strange that when the former catches a cold we expect the latter to sicken as well. The reality is quite different.
Investors take heed and the stock markets drop until we hear a morsel of “good” news such as Papandreou or Berlusconi resigning, but that has only a temporary effect. We want and thrive on bad news and tend to marginalise the good that there is.
Shipping capacity is in excess of demand, that much is certain. Container shipping is impacted the most. Freight rates have collapsed and carriers are in a price war trying to maintain excessively high utilisation levels. We hear that this is due to poor demand, but truth be told it is due to poor decisions on ordering new tonnage. We hear mergers and acquisitions are coming soon, but who would want to go that route after the indigestion suffered at Maersk and Hapag Lloyd after their purchases?
Demand may have fallen short of expectations on the transpacific, but 2011 will end up without a decline on the explosive boom of 2010. In Europe, we will end up with container imports growing some 7%-8% on 2010, so one cannot really blame the lack of cargo.
The container terminal operators will have had a good 2011, with solid volume growth and good financial results and so will the trucking companies and barge operators.
And the East? Growth continues, weather conditions aside. The intra-Asia trades remain relatively solid and national GDP projections make the West look paltry even in good times.
Perhaps good news is there, we just need to look for it.
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