Going into extra innings …

We saw this in Lloydslist News Library:

“Danaos chief detects first signs that worst is over for box trades”

Funny he should feel that way because just one day earlier, we recall, it was announced that his company had struck an agreement with China Shipbuilding and Trading to delay the delivery of five 8,350 TEU vessels for three months or more.

His company also struck an agreement with Hanjin Heavy Industries & Construction to delay the delivery of 10 containerships, five 6,500 TEU vessels and five 3,400 TEU vessels, by about three months each. But that chief was sure that the worst was over.

There are recent “signs” that should be brought to the attention of that chief. Like these, for instance:

• “Hapag-Lloyd loses $ 302m as freight rates and volumes tumble”
• “Maersk Lost $ 373 Million”
• “Cosco loses $ 490 million in 1st quarter”
• “China Shipping Container Lines income plummets 337%”
• “Hanjin loses $ 177 million in first quarter”
• “JAL Lost $ 646 Million in FY08”
• “NOL Lost $ 245 Million in First Quarter”
• “Matson Parent Profit Sinks 93 Percent”

Try telling the CEOs of those firms that the “worst is over for box trades”. Those CEOs may not buy it. They may have heard that Norway’s DNV has reported that 492 vessels with a total dwt. of 37.2 million tons have been cancelled at the world’s shipyards. That’s never happened before.

They may also have heard that, although industry spokesmen stated just a week ago that 506 vessels were idled worldwide because of the collapsing economy, a more accurate story in the May 13th issue of the New York Times revealed that 735 vessels are gathered, or tethered, just outside the port of Singapore alone. Estimates place the combined weight of that laid up fleet of vessels to be more than 41 million tons, an amount of tonnage nearly equal to the entire world’s merchant fleet at the end of World War I. And that never happened before.

The Times also revealed that some 150 vessels are laid up in and around the Straits of Gibralter and that another 300 or so are laid up around Rotterdam, but the report didn’t mention the hundreds more sitting in Subic Bay, in the Fjords of Norway, or in various other anchorages around the world. The article called attention to the numbers and sizes of these helpless leviathans, simply noting the “hundreds of cargo ships – some up to 300,000 tons, with many weighing more than the entire 130-ship Spanish Armada”. In truth, no one knows how to keep track of the exact number of vessels being laid up, because that number increases every day … and because it’s never happened before.

To be perfectly frank, even our own officials seem incapable of tracking anything. Where John and Jane Doe are concerned, U.S. authorities are confident that appeasement and dissembling rather than straight talk are all that matter. Bread and circuses kept the citizens of Rome in line for decades, after all, so why shouldn’t the same strategy be effective with U.S. citizens?

• Didn’t President Obama tout “the encouraging signs in the economy as springing from the ‘extraordinary action’ of his administration, including the $ 787 billion economic stimulus legislation, that he said helped spur consumer demand and restore the flow of credit vital to businesses”?

• And didn’t he say “that the recently enacted stimulus plan, the efforts to strengthen the banking system and attempts to rescue the flagging American auto industry have all borne fruit, demonstrated in part by an increase in home-mortgage refinancings and more lending by small businesses”?

• And didn’t he tell reporters that “What you’re starting to see is glimmers of hope across the economy”?

• And didn’t Federal Reserve Chairman Ben Bernanke assure his critics that “the foundation of our economy are strong”?

• And didn’t he tell Congress that “the economy should pull out of a recession and start growing again this year”?

• And didn’t CNBC’s Jim Cramer announce that, “I am pronouncing the depression is over”?

• And didn’t a “May consensus forecast of panelists” conclude that, “The past month provided fresh evidence the decline in business activity is starting to moderate, buttressing consensus expectations that the economy will emerge from recession in the second half of this year”?

These landlocked officials seem to be unaware of what’s going on in the maritime industry, or the causes of that industry’s demise, and that’s inexcusable. History has shown us that “those who build ships build worlds”, and in our own lifetimes we’ve seen that those who build ships save worlds.

When faced with the dual threat of economic and military devastation in the 1930s and 1940s, this country, under the leadership of FDR, its chief executive, undertook the enormous tasks of building the largest merchant fleet and the largest naval fleet the world has ever seen. Three separate and distinct shipbuilding programs ordered by FDR, and the efforts of millions of American shipyard workers, paid off. Handsomely. The war was brought to a successful conclusion by our military, and the job-creating shipbuilding programs ended the joblessness of the Great Depression. Decades of economic success followed, and it wasn’t until U.S. manufacturers began outsourcing our needs … and our talents … that our economy was thrown into reverse gear.

If our new chief executive could speak to those maritime CEOs and brush up on some U.S. history, maybe he’d see the wisdom of launching another shipbuilding program. That has happened before.