Mike Pouraryan
OV Week-End: Reflections On The Continued Economic Tsunami
:
The Plight of the Ports & Future Indicators
Throughout the past number of months, I had periodically written about the continued economic challenges faced by the world and to assess where things stand. I called it a Tsunami because I sense that there is still rough sailing ahead. I still view the apparent recovery to be quite fragile.
What happened with Dubai was the latest in a series of jolts the worldwide economic system has seen. Eurozone's growth seems to be tempered, although the UK seems to be turning things around and will apparently start to grow again. That should make Gordon Brown happy as he gets ready to face the British Voters next year.
Although I continue to see growth, that growth is not translating into jobs. I realize that jobs are a laggard indicator, the fact remains that organizations are nervous and will not be hiring just yet. One of the profound statistics has been the plight of the World Ports. Drewry, the UK Shipping Consultancy, has noted the deteoriation in the volume that was processed by the major world ports during the first half of 2009. These year-to-year decline is simply staggering:
This is just a sampling of the worldwide bloodbath in container volume. Drewry also notes that, "...It is expected that there will be some minor recovery in trade flows for 2010 ( 2.4%), but together with another hefty dose of capacity injection ( 7.9%), the supply/demand balance will not just remain awful, but actually deteriorate further. While freight rates have been improving of late, this is of course counter-cyclical and it will be a huge test of carriers, Â resolve and ability to maintain this momentum while at the same time continuing to effectively manage the supply side of the equation. Drewry is projecting that average all-in east-west rates will climb rather encouragingly by 18% next year, but this has to be put in context against the enormous decline in 2009 (27%) and the fact that this does not even put rates back up to the same levels as 2006..." (Source: Really Long Link retrieved 11/27/2009). There may well be growth, but the recovery will continue to be long and hard.
The continued flight to quality by the major investors is quite a feat. The demand for American Eagle Coins was such that the US Mint suspended further sales through the end of the year. But, historically Gold has also had a volatile ride too.
I do see a bit of a silver lining in this drop: The Oceans will have a bit of a break. Whether this break will translate into an opportunity for the oceans of the world to regenerate themselves is in of itself a different matter. But, on a more serious note, what we have to realize is that we must stop thinking in the short-term and start planning fo the long term and making sure that the people are ready to think long-term. Basically,we have to get back to basics.
What happened with Dubai was the latest in a series of jolts the worldwide economic system has seen. Eurozone's growth seems to be tempered, although the UK seems to be turning things around and will apparently start to grow again. That should make Gordon Brown happy as he gets ready to face the British Voters next year.
Although I continue to see growth, that growth is not translating into jobs. I realize that jobs are a laggard indicator, the fact remains that organizations are nervous and will not be hiring just yet. One of the profound statistics has been the plight of the World Ports. Drewry, the UK Shipping Consultancy, has noted the deteoriation in the volume that was processed by the major world ports during the first half of 2009. These year-to-year decline is simply staggering:
1) Antwerp (Belgium): Down 18.4%
2) Los Angeles (US): Down 15.6%
3) Buenos Aires (Argentina); Down 28.8%
4) Singapore : Down 12.3%
5) Dubai: Down 6.9%
6) Rotterdam (Netherlands): Down 14.8%
2) Los Angeles (US): Down 15.6%
3) Buenos Aires (Argentina); Down 28.8%
4) Singapore : Down 12.3%
5) Dubai: Down 6.9%
6) Rotterdam (Netherlands): Down 14.8%
This is just a sampling of the worldwide bloodbath in container volume. Drewry also notes that, "...It is expected that there will be some minor recovery in trade flows for 2010 ( 2.4%), but together with another hefty dose of capacity injection ( 7.9%), the supply/demand balance will not just remain awful, but actually deteriorate further. While freight rates have been improving of late, this is of course counter-cyclical and it will be a huge test of carriers, Â resolve and ability to maintain this momentum while at the same time continuing to effectively manage the supply side of the equation. Drewry is projecting that average all-in east-west rates will climb rather encouragingly by 18% next year, but this has to be put in context against the enormous decline in 2009 (27%) and the fact that this does not even put rates back up to the same levels as 2006..." (Source: Really Long Link retrieved 11/27/2009). There may well be growth, but the recovery will continue to be long and hard.
The continued flight to quality by the major investors is quite a feat. The demand for American Eagle Coins was such that the US Mint suspended further sales through the end of the year. But, historically Gold has also had a volatile ride too.
I do see a bit of a silver lining in this drop: The Oceans will have a bit of a break. Whether this break will translate into an opportunity for the oceans of the world to regenerate themselves is in of itself a different matter. But, on a more serious note, what we have to realize is that we must stop thinking in the short-term and start planning fo the long term and making sure that the people are ready to think long-term. Basically,we have to get back to basics.
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