But shipowners, who only a couple of years ago would have been boarding east-bound airliners waving cheque books, seem at last to have learned the lesson that just because a ship is cheap, it doesn’t mean you have to buy it.
We are told that the sources of finance are drying up as the bankers try and scale down their shipping portfolios, although there are still well-provided owners with deep cash reserves from earlier sensible sales. One wonders at the advice that ship owners are given by their financiers and recall that these seers are the folk that failed to see a crash coming eight years ago. Somebody was spreading the word that scale economies were the guarantee of a prosperous future, this message evidently registering with far too many people. Are they now thinking “that’s another fine mess you got us into!”
Was it economists who told the owners of all this giant tonnage that they needed to splurge to survive? It is probably pointless to note that as a profession, economists tend not to register too many stunning successes. Was it management consultants, whose glossy tomes of advice look so impressive until you drill down to establish the paucity of the maritime or trade expertise behind them? I recall asking a shipowner – a person of legendary skill and experience – what he thought of a consultant’s report that was doing the rounds as the industry struggled out of a slough in the 80s. This owner – sadly departed, but one of my all time heroes- looked at me with such withering scorn, that I rapidly changed the subject.
Might it be that too much of the industry has been captured by its financial directors; people who some say are not really “shipping” folk, with no real feeling of what they really are running? It is a point of view that you hear quite regularly, although I would hesitate to say with certainty that when financial people – book-keepers, before they became accountants - were kept in the shipping company basement by the great maritime brains in the boardroom, the decisions made were really any better. Maritime historians are probably a better judge of this one.
Getting out of the mess that much of the shipping industry has got itself into now seems to depend on “other people” stepping up with the necessary cash. Ports and cargo handlers are the meat in the sandwich between the sea carriers, desperately squeezing their costs and the shippers and consignees, who would rather like to get their hands on their cargo more expeditiously.
It is up to the ports to dig out their channels and improve the facilities to enable the bigger ships to enjoy their “scale economies” and to enable vessels displaced from their trades by the giants to cascade into ports used to far smaller vessels. Sound reasonable? If you are a shipper, with your goods suffering a dwell time of a week on the quayside after it has been dumped ashore from a gigantic ship, it does not seem too much to ask for a bit more speed. But how is a port or terminal going to finance the expense of completely new cranes that will reach across the width of a 10,000 teu ship and expand the storage ashore to facilitate the exchange of boxes, where land is at a premium, even if it is possible to dredge and reinforce the quay and its appurtenances, to allow far bigger ships to lie safely alongside? What on earth will a port or terminal manager tell his financiers when he asks them to produce the cash to buy all this hardware, to service clients who could, just possibly, be the next Hanjin? Which is where we came in....
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