Groaning with the Market

According to AP Moller-Maersk chief executive Nils Anderson:

• “Containership owners and operators face another four or five years of surplus capacity before demand catches up to supply …

• “The imbalance is not as severe as some had feared, helped by better-than-expected volume growth in the Asia-Europe trades in recent months.

• “The plan for Maersk Line is to grow with the market …” —

Those statements were offered to Lloyd’s Janet Porter by Mr. Anderson during a telephone interview on Thursday, August 21st. He should have held off until the 24th when James Petras, retired Professor of Sociology at Binghamton University, reported on Europe’s ailing economy. The Professor’s words weren’t exactly an echo of those uttered by Mr. Anderson. For examples:

• “Europe’s economies are in deep economic crisis, exacerbating long-term stagnation and chronic recession.

• “The dominant countries, Germany, France and Italy are mired in recession …

• “From Nordic Finland, passing through the Baltic States to Central and Southern Europe, the Eurozone ‘recovery’ is ‘kaput’! Finland … is in a long-term depression.

• “The recession in Germany ripples throughout Europe – especially affecting Poland, the Czech Republic, Hungary and Southern Europe.

• “Italy is stuck in a half decade of profound recession continuing throughout 2014.

• “France has entered a period of perpetual regression: Unemployment exceeds 11%, underemployment and ‘make work’ exceeds 20% …

• “The ‘Backside of Europe’: Spain, Greece and Portugal are deeply buried in a near decade-long depression with unemployment ranging from 26% in Greece and Spain to 16% in Portugal …” —

Are we to rely upon Mr. Anderson’s forecasting or Professor Petras’ reporting? Maersk officials were so sure of the industry’s inevitable “volume growth” that they wasted no time in leading the other carriers down the primrose path to “oversupply”. They were the first to apply the “slow steaming” band-aid, too, you may recall. Now they foresee “growing with the market.”

Don’t they know anything at all about “supply and demand”?