From Bloomberg News:
“Japan Exports Plunge Record 27% as Recession Deepens”
“Dec. 22 (Bloomberg) – Japan exports plunged the most on record in November as global demand for cars and electronics collapsed, signaling more factory shutdowns and job cuts are likely as the recession deepens …
“Toyota Motor Corp. forecast for its first operating loss in 71 years on plunging North American and European car sales …
“‘There are no markets that can make up for the drop in demand for Japanese-made goods,’ Dai-Ichi Life’s Shinke said …
“‘Japan did nothing to prepare itself’ for the collapse in demand from abroad.”
• Neither did Maersk, the world’s largest shipping line, now attempting to offset the surge in newbuild capacity deliveries by frantically laying up thousands of TEUs.
• Neither did the officials at the ports of LA/Long Beach who recently announced plans to spend more than $ 2 billion on capital improvements in spite of the fact that throughput volumes in their ports are tumbling.
• Neither did the members of the TSA who’ve decided that the way to offset declining rates – caused by a reduced demand from struggling U.S. consumers – is to raise the cost to those unemployed end users.
• Neither did CMA CGM, the world’s third largest shipping line. From “The Star” comes the story that the firm is still optimistic despite the worldwide economic downturn, and that 80 new vessels are scheduled for delivery between now and 2011. According to one official, the firm was aware that these new vessels will flood a market already at overcapacity, but “he reckoned that the company would be ready – if trade suddenly picks up”.
Like this fellow, most maritime officials live in a dream world. As we’ve pointed out in earlier commentaries, they have no concept of cause and effect relationships. Fairplay revealed last week that the IMF is showing concern about China’s slackening growth, and although reports from China have described the surprising number of factory shutdowns and the thousands now unemployed as a result of those shutdowns, maritime officials are still unable to foresee the impending disaster.
Unemployment began in the U.S., and our loss of buying power has caused job losses throughout China. Finally, China’s slowdown will decimate the dozing maritime industry. Cause and effect.