High and Dry
“Global trade is growing again after the economic crisis, and it threatens to stress the outdated freight transport system we have in place. If we don’t address this, we’ll inhibit trade growth and the global economy.”
“Global trade growing again”? That’s what one of the world’s prominent shipping line CEOs told an audience at the International Transport Forum 2010.
What was needed, he said, was that infrastructure improvements had to be financed by investors who had withheld liquid funds during the economic turndown.
Public budgets (read: taxpayer funds) were no longer available, he noted, so well-heeled investors in the private sector had to be conned into rescuing the maritime industry.
Until recently, the maritime industry had been walking away with all the marbles because the hoodwinked U.S. taxpayers/consumers were stuck with the costs of “infrastructure” upgrading. It was all part of that “economies-of-scale” nonsense, you’ll recall. All income and no outlay for the owners of those floating leviathans. Nice work if you can get it.
But the well has run dry because the taxpayer/consumer is gone. He/she has been forced into the ranks of the unemployed, and without that demanding U.S. consumer/taxpayer – that unwitting sugar-daddy – the true dynamics of the maritime industry are out in the open. The tail has been wagging the dog for way too long. The consumer is the catalyst. The consumer is the sine qua non. Contrary to what that CEO said, global trade is not growing again and because financial support is no longer forthcoming, shipping lines are faced with insurmountable problems.
Private investment? He can forget about that. No one wants to throw money down a sinkhole. As an example, the UK’s first new container port in two decades was dedicated earlier this year and it’s still looking for its first customer. Two years ago the industry was booming and the fat, dumb and happy elite saw no indication of the economic failings ahead. Even Singapore’s PSA, the world’s second largest container terminal operator, and the owner of this new PSA Great Yarmouth container port, was steaming full speed ahead.
The situation has been changed radically by sharp declines in container volumes, and that new port is virtually lifeless. If there’s no sudden influx of containers bearing goods demanded by buyers, who have weekly paychecks because they have jobs … there’ll be no influx of investment funds.
CMA CGM will vouch for that. They’ve been looking to cover their losses for the better part of a year now, and have been rejected by all comers, including the latest prospects, a group from Qatar.
The industry with its outmoded ships and ports will not survive. It – not “infrastructure” – needs upgrading. Take another look at our patented container ship – it’s “an idea whose time has come”.