Posted on 08/31/2016 9:31:00 PM PDT by Olog-hai
Today a big Korean shipping company called Hanjin declared bankruptcy. It may be far away, but that move is a testament to an industry in trouble.
Volume is way down all over the world as trade remains sluggish. Add to that the fact that just as demand wanes, a whole load of new vessels come online, and there’s a problem.
Shipping hit a crisis in 2008 as demand for goods plunged. It’s never fully returned. John Butler is CEO of the World Shipping Council. He said after the financial crisis, when oil prices were spiking, “There was an expectation that the global economy would come back much more strongly than it did. A lot of companies took what was then a rational decision to build more, larger, newer ships.”
Which ultimately they’ve never filled. So now he said they can’t command their usual shipping rates and they’re suffering. …
(Excerpt) Read more at marketplace.org ...
I have noticed the price of shipping containers has dropped 500 to 600 dollars from a year ago.
Not so much anymore.
The downside of capitalism is that it is addicted to growth. This is easy to understand, since growth requires a lot of production, from which a lot of people profit. When growth slackens, it’s the end of the world.
I might add, that the upside of capitalism is that it is always looking for new areas to grow into, and finding them. Our entire modern world including computers and telephones, and extending to the incredible Google and Facebook empires, would be unthinkable without it.
It can be tough when you’re in shipping containers, though.
The beat goes on.
Bump for later.
Wed. a relative said this was his dream shipping container home.
http://offgridsurvival.com/mobileshippingcontainerhome/
Very interesting. Thanks for posting
The Baltic Dry Index has been down for at least five years with a lot of shipping capacity idled. Building new ships made no sense.
AAAhh, the long awaited return of the eight wide trailer in a fixed site version.
I read an article titled something like, “The coming collapse of globalization.” (There are hundreds of articles with similar titles on a Google search.) There are so many things wrong with the many economies that it is hard to pick a starting place. The fact that nations are keeping the interest rate at zero means that governments can borrow money for their favorite agendas for free and call it “investment.” But investments should be self-paying. You borrow to build a dam and it pays for itself by producing power. Instead they are building high speed rail between places people don’t want to go, or whole cities that nobody lives in, or “wind” farms that never pay for themselves. So, that money becomes debt for the future children to pay off even though they will see no benefit from it.
Another issue is manufacturing. It is getting cheaper to do it mechanically or with printing than to use cheap labor. Also, world demand is declining. Once everybody has a 60 inch TV, an internet connection, an iPhone and salad shooter, a bigger one, a faster one, or one that adds bacon bits automatically really won’t cause manufacturing to surge.
Another problem is demographics. The older economies are full of older people who don’t consume TV’s and cars as much as Depends and high fiber serial. The growing populations centers are in the third world who add only murder, rapes and chaos. They consume guns and explosives, probably the last thing you’d want to sell them as they will use them on you.
So, we enter what are potentially the hardest times seen since World War II with generally incompetent leaders (Obama, Merkle, and anybody running France.) and a load of debt that will stymie development and growth for a century or more. The harbinger of this is that global shipping is declining. The worst part is, in the past governments have gone to war to take their voter’s minds off the economy and to have a reason to enforce policies they couldn’t have otherwise; gun control, calorie control, smoking control (except for pot, which will be subsidized.)
It makes sense if you’re betting on TPP and the like.
that... really sucks...
:-(
Possibly. I was in Turkey down on the coast three years ago and was taken aback by how many ships were anchored down there waiting for a cargo. Anecdotal I know, but there was a F.R. thread on idled ships in Asia that took me aback also. The industry is hurting.
Growth comes from innovation. There is no downside to innovation.
Building the new ships made sense only because the newer ships were bigger and offered more capacity. It’s sort of like having a perfectly good tractor-trailer with a top speed of 60 mph and a weight limit of 40,000 pounds. It might make a lot of sense to buy another one of the top speed is 70 mph and the weight limit is 48,000 lb.
Only if you can fill it with cargo.
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