No More Free Lunches

The June 2nd issue of FOCUS TAIWAN featured the following story:

“Taipei, June 2 (CNA) The chairman of the Evergreen Group, a Taiwan-based shipping conglomerate, has confirmed that its maritime unit will order 100 new ships to modernize its fleet amid the global recovery.

“‘It will take at least 10 years to have the 100 boats built, but the first will be delivered in 2013,’ said Evergreen Chairman Chang Yung-fa in an interview with the Chinese language United Daily News published Wednesday.

“Chang said Evergreen Marine Corp., Asia’s second largest container line, hopes to order 32 container ships this year with a capacity of 8,000 20-foot equivalent units (TEUs) each.

“The company is thinking of purchasing 10 of the vessels from South Korea and another 12 from Taiwan’s CSBC Corp., Chang said, but their prices have yet to be finalized. The remaining ships may be ordered from either Korean or Japanese shipyards.

“The report said that at Chang’s insistence, the new ships will be environmentally friendly and not cost more than $ 10,000 per TEU.

“The plan, regarded as the world’s largest order for new boats, has drawn the attention of all major shipbuilders, test centers and equipment suppliers around the world, the report said.

“Bloomberg News reported last month, when Chang first announced the new order plan, that Evergreen Marine is the only shipping line among the world’s 20 biggest without any new ships on order.” –

Instead of daydreaming, Mr. Chang would be well-advised to check out current events. The hoop-la put out by officials at the Panama Canal Authority and by those promoting the construction of a new Bayonne Bridge doesn’t really count as current events. It’s just a lot of, well … hoop-la.

Does Mr. Chang really believe that the Panama Canal will be expanded, when in fact the world is in the throes of the worst economic downturn since the Great Depression?

And does Mr. Chang really believe that anyone is convinced that Evergreen will order 100 new vessels – especially when his competitors are cancelling newbuild orders by the dozens?

Mr. Chang, the folks in New Jersey, and Senor Sponge at the Panama Canal Authority as well are all talking ragtime. They’re just making a play for taxpayer money. Someone should let them know that the taxpayer is broke and can barely afford to make ends meet. So they can forget about mega-ships and mega-bridges – unless they want to pick up the tabs themselves. Yeah, right.

That “amid recovery” jazz in the above headline is nothing but nonsense. Mr. Chang should pay more attention to the plight of the average human being on the planet. Y’know – the shopper who buys the goods that the likes of Evergreen freights across the world’s oceans. Or should we say – the shoppers who used to buy the goods that Evergreen used to freight across the world’s oceans.

Bob Herbert at The New York Times certainly had dissembling officials in mind when he wrote just a few weeks ago that, “Those who think some kind of recovery is hiding around the corner, just waiting to spring a pleasant surprise on us, are deluded. Too many families and individuals are tapped out. They’re struggling from week to week and month to month just to meet the necessities of housing, food and energy costs. Those crazed, debt-driven buying sprees that held the economy aloft for so long are over.”

But even if the NY Times isn’t on their preferred reading list, maritime chieftains must certainly have seen the following articles in The Journal of Commerce:

– June 2 – “Package Shipper Projects ‘Prolonged Economic Softness'”

– June 2 – “Truck Trailer Orders Slow in April”

And Cargo Business Newswire issued this report a little more than a month ago:

“Japan’s top three shipping lines posted drops in profits and revenue for their respective first quarters. The Asian nation’s biggest shipping group, NYK, reported a 30 percent drop in revenue and a $ 187.5 million loss over last year’s $ 596.4 million profit.

“The number two Japanese liner, ‘K’ Line, showed a net loss of $ 729.7 million over its $ 344 million profit from the previous year.

“Rounding out the top three was MOL, which saw a 90 percent plummet in profit and a 27.8 percent drop in revenue.” –

Still want to talk about a “recovery”, Mr. Chang? Every link in the international supply chain has been sorely affected by this worldwide economic catastrophe. Factories throughout the world are shutting down; truckers are being laid off; your maritime industry has laid up hundreds of unneeded vessels; yet you’re trying to convince us that you intend to order 100 new mega-ships?

When factories aren’t providing goods to be hauled by container ships; and when retailers shelves are empty as a result; and when buyers aren’t buying because they’re unemployed and have no money to spend; and when … But you get the picture. So do the officials at the Panama Canal, and in New Jersey as well. You’ve been eating our lunches on a regular basis but now you’re beginning to feel the pinch because there’s nothing left in the trough.

Once more though, it’s the U.S. shipyards and U.S. shipyard workers who’ll revive the economy. The only steps that created jobs and ended the Great Depression were FDR’s Emergency Shipbuilding Programs. Nothing else worked then and nothing else will work now.