Saturday, December 13, 2008

Dead slow ahead

We've made it off the coast, the tall lighthouse at Saint Simon's Sound
the last vestige of civilization we'll see for the next eleven days and

it's not a moment too soon. Everyone was getting a little crispy around

the edges as we arrived and departed our last port during a nine day

coast replete with arrivals, departures, gear tests, cargo watches,

class inspections and a few walks on shore.

The highlight of the last week was seeing my younger brother for the
first time in 15 months in the Port of Baltimore. The sheer chance that
our ships would cross paths was utterly remote but just like when he was
assigned to my first Ro/Ro as an apprentice it seemed to work out. Of
course we only had an hour together at an Irish pub in Fells Point but
with our common life styles you take whatever you can get when it comes
to being with family.

Another plus was our server finally received a make over. Once again
the multiple workstations onboard are linked with the printers as well
as the security cameras, stability program, maintenance and
requisitioning system and of course email. The IT guru spent almost an
entire week tweaking at a daily rate rivaling that of our good captain

(What are the incentives of going to sea again when compensation equates
the risk of crashing a computer with that of a ship?)

Now with communications restored and the third mate's XM radio he so
selflessly leaves on the bridge I'm settling in for a lovely crossing
below the fine weather a massive high pressure system is providing us.
Of course the approach to the channel looks a little chunky, maybe very
chunky, but that's more than a week away so I'll just enjoy the
70-degree days in the strong and warm Gulf Stream.

Listening to all that XM though keeps reminding me of the financial shit
storm we are only beginning to comprehend. I'm a news junkie and can't
tune out the reports of the highest rates of unemployment in 26 years
and re-defaulting home mortgages even after defaulting borrowers
received aid.

Given the interconnectivity of globalization, shipping is feeling the
pinch as hard as hedge fund managers. With the exception that shipping
is a little more vital to keeping the wheels of commerce greased than
mortgage backed securities and credit default swaps were.

As Lloyd's list reports, car carriers are of no exception. "Owners are
set to axe 25% of car carrier fleet as auto sales slump," reads the
headline of one copied and pasted email that made it across my desktop
recently. The article goes on to report that Ro/Ro tonnage, which only a
year ago was in such high demand that shipyard orders were booked
through 2012, may be reduced by 200 ships in the near future. A large
number for a very specialized and small component of the total shipping

Owners are honing in on ships built in the 70's and 80's to be sent to
the breaking yards. This will be even more necessary to meet the
shrinking demand as the world's total car carrier fleet is set to expand
by 50% in the next four years as ships ordered as far back as 2003 are
built. Hopefully these new vessels won't meet the same fate as one ship
headed for Sweden; That of being turned into a floating parking garage.
That particular vessel, most likely hired by Saab or Volvo, is destined
for Gothenburg's harbor to provide shelter from the winter for unwanted
exports sitting on the docks.

This may be necessary in Baltimore as well where I was told that there
were 13,000 Chryslers sitting on the dockside terminals with nowhere to
go. Right now it is thought that the majority of automobiles now
underway are without buyers leaving the owners of PCTC's wondering if
they'll be paid for the cars that they are contractually obligated to

Over the ocean in Germany BMW and Mercedes are shutting down their car
plants longer than usual over the Christmas holiday. Normal operations
are to shut down and retool the factories for the year's upcoming models
which lasts for a few weeks lessening loads for our vessel. But this
year the plants will be closed indefinitely until market conditions
improve. Now with the bail out bill for the 3 American car makers
failing in the Senate, not only are German autoworkers facing an
uncertain future but so are the thousands of workers in Michigan.

I can only hope that this recession is no more than a painful correction
for the world's over inflated economies and not the beginning of the end
of globalization and all the conveniences it brings us. If managed
correctly we're just sounding the bottom of an economy that still has a
way to grow; just a little slower with more restraint focusing on
longevity, efficiency and sustainability rather than rapacious greed.
Either way it's going to be a small Christmas for a lot of people,
shipping companies included.

No comments:

Post a Comment