The current financial and economic situation affects all areas of business, all over the world, and the past months have been painful for all of us. To understand what is happening at this moment is difficult; to predict what will happen, is impossible. One thing is certain: We will have to face tougher competition, and very likely a market consolidation.
We are already seeing the decline of consumer goods. Regarding future heavy-lift and project cargoes, we must consider the economic development, infrastructure and heavy industry projects, and they typically follow a time offset of four to six months. This means that first quarter of 2009 will give us an indication of what we really have to face.
Oil price is another critical factor, as a huge part of the project business is driven by energy investments. Most of these projects require a price of $50 per barrel and higher. According to the Organization for Economic Cooperation and Development, the current world economic environment can only cope with oil prices from $50 to $60. If this is the case, there is just a small corridor of stability.
We expect the market to continue to be driven by the same players as we have seen in the past: South America, India and China. These three still have immense potential and are still rapidly developing, driven by a high rate of public and infrastructure investment. It is unlikely that they will reduce their development and infrastructure investments, and I do not expect them to adopt protectionist trade policies.
The future will be tough, but shipping has seen an extraordinary market, and we all have had some time to prepare ourselves.