… And they’re OFF!

NPR’s January 5, 2012 report on “The Race To Dig Deeper Ports For Bigger Cargo Ships” was anything but informative. In fact, it was a little bit misleading. But, of course, that’s NPR. Here’s the way the spinnage went:

“In 2014, when expansion of the Panama Canal is complete, a new generation of superlarge cargo ships will begin calling on the East Coast. Cities like New York, Savannah, GA, and Miami are vying for the new business, as they race to deepen their ports and expand their facilities to accommodate the new ships.

“But some of the cities are running into significant challenges. In Miami, where plans are underway to deepen the port to 50 feet, dredging is a hot topic. Some see it as a great business opportunity. To others, it’s a threat to the environment.

“The director of Miami’s port, Bill Johnson, is one of those who’s excited. ‘We are the only port south of Norfolk, Va. … that has full approval from the U.S. Congress to go to that depth. It is a game changer,’ he says.

“After the expansion of the Panama Canal is complete in 2014, ports on the Gulf and East Coast will see more so-called post-Panamax vessels – ships that carry more than two or three times the load of standard freighters …

“‘We’re not about killing manatees; we’re not about polluting the bay. We’re about doing things that are right.’ Johnson said …

“Miami is not the only city where port dredging plans are controversial. In Georgia, a plan to dredge Savannah’s port has riled up environmentalists and politicians …

“Regulators in South Carolina, just across the Savannah River, at first moved to block the dredging. But then South Carolina Gov. Nikki Haley intervened. In part because of her help, Georgia was able to negotiate a deal with South Carolina regulators that allows the dredging to go forward …

“‘Those Panamax ships are coming through Charleston, and it is going to be so vibrant and so strong, that the overflow is going to go to Jasper, (S.C.), and Jasper is going to be a great port,’ Haley says. ‘Without question, the ports are the best thing we’ve got going. It’s an opportunity waiting to happen.’ …”-

NPR would have us believe that those giant vessels (which have always been funded by U.S. taxpayer/consumers) will be swarming through the new Panama Canal (which, they hope, will be funded by U.S. taxpayer/consumers), bearing thousands upon thousands of containers loaded with tons and tons of products manufactured in China, Japan, Indonesia, India … which they claim will be purchased by demanding U.S. taxpayer/consumers.

The truth is, it’s all fantasy. U.S. taxpayer/consumers will fund nothing because they’re demanding nothing. They’re unemployed and broke.

But is it fantasy? The bigwigs in the maritime industry can’t possibly be as stupid as they appear to be. The maritime journals and news service are reporting daily on the world’s economic failures and the devastating effects being felt by every phase of international commerce. The reports are available to everyone in the industry, and unless the authorities are wearing blinders, how can they justify behaving like a bunch of drunken sailors? How can they ignore the following stories?

– December 16, 2011 – “Analysts Say No Asia-Europe Rate Recovery in Sight” – “Analysts don’t expect Asia-Europe rates to recover in the coming weeks because there is no surge of volume and reduction of overcapacity in sight.” –
– December 18, 2011 – “November Long Beach import boxes decline 15.6pc., exports down 17.7pc.” – “Container imports through the Port of Long beach decreased 15.6 per cent in November year on year, while exports declined 22.2 per cent and the total container volume, including empties, fell 17.6 per cent.” –
– December 21, 2011 – “BIMCO: Box shipping can weather economic storm, but more layups are needed” – “Container shipping becomes fragile when depending on consumer confidence to increase growth, and especially when idle fleet volumes match new tonnage gains as they do today, says a Baltic International Maritime Council (BIMCO) report … BIMCO said there will be more layups after Chinese New Year on January 23 to balance out the newbuilt tonnage coming upstream.” –
– January 4, 2012 – “Drewry Says Container Lines Lost $ 5.2 Billion in 2011” – “Container shipping lines could lose as much as $ 5.2 billion in 2011 despite a projected growth in global demand of 6.5 percent, according to Drewry’s latest quarterly Container Forecast. Drewry based its dismal forecast on carriers’ third-quarter losses and industry fundamentals, which have deteriorated sharply since 2010.” –
– January 4, 2012 – “Japanese Lines Warn of Tough Year Ahead” – “Japan’s top three ocean carriers are girding for a difficult 2012 amid vessel overcapacity and sluggish European and U.S. economies, the presidents of MOL, NYK and ‘K’ Line said in their annual New Year’s messages.” –
– January 10, 2012 – “Alphaliner Says Shipping Overcapacity To Accelerate” – “Ocean carriers face a growing capacity glut in 2012, especially on the key Asia-Europe trade lane, as ship deliveries accelerate from last year while cargo demand weakens over the coming 12 months, Alphaliner forecast.” –
– January 10, 2012 – “Idle containerships number 362, totaling 595,000 TEU as 2012 begins” – “The idle containership fleet rose to 246 units, totaling 595,000 TEU at the beginning of 2012 compared to 322,000 TEU being idled 12 months ago due to additional capacity withdrawals for the winter season.” –

In order to offset the serious overcapacity problems of this year’s newbuild deliveries, dozens and dozens of older container ships will be consigned to the Bangladesh scrap yards. And bear in mind also the nonsensical “slow-steaming” strategy that was dreamed up so that the layup of dozens of newbuilds can be avoided. Losses of only $ 5.2 billion? They should be so fortunate.