I’m not one to beat around the bush, or say everything is coming up roses when it’s not. We’re in a global recession. There is no way 2009 will be as good for maritime as was 2007 and the first part of 2008.
National economies across-the-board are taking horrendous hits. The downside of globalization is how fast this economic contagion has spread from nation to nation, and industry to industry. No one has been immune.
Take China, whose economic slowdown is especially troubling for the container industry.
Now consider wastepaper, the highest-volume U.S. export shipped in containers to China. With slack demand in consumer markets, the high volume of America’s wastepaper exports to China is way off. Chinese manufacturers don’t need that paper for cardboard boxes to ship goods to the U.S. and elsewhere. That translates into lots of empty slots on deep ocean ships. Maersk and other lines are selling ships and cutting staff.
China recently announced it was undertaking a domestic economic stimulus program of a magnitude that dwarfs what most other nations are doing to prop up their economies. The news that it intends to invest $586 billion domestically makes me even more nervous about a U.S. economic recovery. Thanks to our record trade deficit, America has the dubious distinction of being the world’s biggest debtor nation. In order to grow, the U.S. needs to consume more than $2 billion of foreign capital each and every day. Can we count on China for our financing needs?
I don’t know, but I’m counting on a lot less trade in consumer goods in 2009. Automobiles and other ro-ro volumes will be way down. Buyers are in no mood for those big-ticket items until confidence is restored, and I don’t see that happening soon. The party is over.