At the recent TOC Europe recently there was no end to the woes of the industry. Trade was sharply down, port volumes and profitability was down – but at least they were still showing a profit, and container carriers were facing the worst crisis of their lives. No one wanted to hear any good news, the bad news was more interesting to gloat over.
The whole of the maritime industry is waiting with bated breath for the roll call of insolvencies and bankruptcies among the bulk owners and container carriers. Who will be the first to go and will it really matter? Drewry spoke of a $20bn loss and suggested that the industry could not survive this large figure. There was talk of asset sales, such as terminals and ships.
The common thread in any discussion however is to blame it on the economists for not getting it right despite the fact that some economists did get it right. It is a matter of working out whom to listen to and what decisions to take. This economist looked at the massive disconnect between supply growth and cargo growth going forward from 2008 and it was pretty clear that the industry was headed for serious financial results. Did carriers and terminal operators forget about the supply/demand curve? What happens when supply exceeds demand? Prices drop and market share warfare starts.
There should be little sympathy for carriers with large order books and heavy financial losses in 2009; they brought it upon themselves. Now they want the rest of the industry to pay for their misguided exuberant management. They attack anyone raising prices and try to renegotiate existing contracts.
Next cycle, instead of ignoring the economists, maybe try to listen and learn. Wishful thinking right?