Banks and other financial institutions have realized the shipping business is a rather risky undertaking, and, along with many private and institutional investors, have suffered severely during the economic downturn.
Although no one has a crystal ball to forecast developments during the next five to 10 years, it is reasonable to assume credit will be tight for some time. Banks are being bailed out by national governments, which raises the specter of increasing government control, or at least supervision. Private investors may lose their appetite, as governments omit tax incentives and plug loopholes.
2010 will produce some improvements, in cargo volume and freight rates, but it is unlikely that many carriers, despite cost-cutting measures already in place, will return to full profitability in the years ahead. Some may, to the detriment of the shipping public, decide to withdraw entirely or merge with stronger partners. There is little the industry can do to stem the tide of rapid imminent deterioration. Space-charter agreements, ship layups, slow steaming to cut fuel expenses and other cost-saving programs have been implemented. Further reduction of shore personnel is likely, resulting in heavier workloads for individuals and decreasing overall service levels.
There is no reason for despair. Even in tough times, our industry always offers exciting opportunities for those with vision and sense of innovation. The round wheel may have been in use for a long time, but there is room and need for improvement. Companies and individuals must adapt to the changing environment to be ready when the economy improves. Those who are well-prepared to face the elements will survive.