The old saying, “I am beginning to sound like a broken record,” comes to mind as I review some of what has been stated in recent years regarding our industry and what appears to be the driving forces going forward with respect to the effects on our industry. Once again we find ourselves in an election year with a depressed global economy and an unpredictable fuel market.
With a presidential election looming, the year 2016 may be focused on just that, the election. Depending on the winner, the success or failure of important pending international trade agreements alone are worth noting. One that comes to mind is the Trans Pacific Partnership involving 12 countries including the U.S. Like most trade agreements, there will be winners and losers if this agreement is reached. It appears one potential winner for the U.S. economy would be the agriculture industry, a big user of the maritime industry. I am not here to state whether this is a good or bad agreement, but I do think it will play an important role one way or another.
As for the fuel aspect, there are some that believe fuel prices will rebound in 2016, at least in the short to medium term, their basis being that oil production has fallen off, yet global demand remains in place. Some predict fuel will increase as much as $35 per barrel. Any movement in fuel has a clear effect on operating costs.
The global economy is the tricky one as I am not sure anyone has a complete handle on this. In the past 18 months, many countries, including the Eurozone, have devalued their currencies, which in turn have strengthened the U.S. dollar. In addition, China’s economy, a big mover internationally, seems to be having growing pains. Finally, the issues in the Middle East and the recent Paris attacks must be considered. Obviously, all of these issues will affect the maritime industry.