It looks like a hard year ahead, but old timers have seen worse in 1982THIS was the first year in a more than a generation that every shipping sector has been simultaneously depressed with no rescue in sight, reports the American Journal of Transportation.Nothing like a switch from sail to steam or from coal to oil or the glorious prospect of containerisation ¡V to provide relief. The only ones to spoil the New Year's gloom was French shipping giant CMA CGM with its contrarily cheerful holiday assessment.But first the gloom. It simply was a bad year all around for every segment in the entire shipping industry, said the AJOT report, which hails from Plymouth, Massachusetts, the home of the purest Puritan gloom.But face it, AJOT concedes - there were similar hard times in 1982 when Hong Kong's Far East Economic Review published a depressing annual synopsis of shifting alliances or conferences as they were then called, excess capacity, mergers and bankruptcies. "But the story serves as a reminder that we've sailed these seas before and the author was wrong in 1982 and could be wrong if he were writing again today. "In reality, 1982 wasn't the first time nor will 2016 be the last time, and by understanding underlying causes could prove useful in making the decline more palatable," said AJOT. "The year 2016 was indeed a very bad year for liner shipping and the prospects for year 2017 seem dim albeit with numerous caveats that could alter any prognostication. "Like the year 1982, containership operators are not alone in their distress as virtually every sector from tankers to bulk and break bulk carriers are all bumping along the bottom," it said. Mitsui OSK Lines CEO Junichiro Ikeda, who was around a half-year at the helm, pretty much summed up the sorry situation, when in January 2016 he wrote in the New Year Message: "Our business climate remains severe. Fleet oversupply is still an issue, and we see few prospects for recovery with the Chinese economy slowing down and markets stuck at historically low levels for both containerships and dry bulkers. The drop in crude oil prices does provide a tailwind with the twin benefits of reducing bunker costs and spurring the tanker market. However, low crude prices also raise concerns . . . we cannot realistically expect favourable conditions will go on forever in the tanker market," said Mr Ikeda.While there is reason to be gloomy, CMA CGM looked on the bright side of its year when sending out its annual review and forecast, pointing out its strengthened services in January that linked Reunion in the southern Indian Ocean to become the group regional maritime shipping hub.CMA CGM positions the Reunion Island as a strategic hub in the Indian Ocean by offering five weekly calls compared to three before, the group links Reunion Island with Europe, Australia, Asia, India, East Africa, West Africa and South Africa.In February, there was more cheerful news of the 18,000-TEU CMA CGM Benjamin Franklin, successfully docking as the biggest ship ever on the west coast to discharge and take on cargo in Long Beach and Oakland. There were problems, but it's a start.In June, CMA CGM assumed control of Singapore's Singapore's Neptune Orient Lines and its principal holding APL, the city state's container shipping unit. With the purchase, the Marseilles-based company - the world's third biggest - employed 29,000 and carried 18 million containers on board 536 ships generating annual revenues of US$20 billion.In September, the CMA CGM accent was again on Africa, where it inaugurated a training course for African cadet executives in collaboration with the French Business School KEDGE, and the ARSTM in Abidjan (Academie Regionale des Sciences et Techniques de la Mer). So as AJOT says, the worst is not the surest. The French seem to have the right spirit. So let's lean on our chinstraps and face the New Year with enterprise and daring. It's the new way!
MARKETS
29 December 2016 - 21:46
It looks like a hard year ahead...
THIS was the first year in a more than a generation that every shipping sector has been simultaneously depressed with no rescue in sight, reports the American Journal of Transportation.
MARKETS
29 December 2016 - 21:46
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