Temas Especiales

17 de Jan de 2021

Nacional

An industry in peril

PANAMA. Bad news for the container shipping industry is bad news for the Panama Canal and Der Spiegel, an internationally renowned publ...

PANAMA. Bad news for the container shipping industry is bad news for the Panama Canal and Der Spiegel, an internationally renowned publication says that the global economic crisis is wreaking havoc on shipping.

Demand and prices have collapsed and ports are filling up with fleets of empty freighters. The crisis has fueled cut-throat competition and not all companies will survive.

Until not too long ago, shipping was both the greatest beneficiary and hammering pulse of globalization, moving goods around the world at an ever-increasing pace. The industry has been growing rapidly from year to year, ever since China became the world's factory.

In 2008, roughly 500 million standard containers (TEU) were transported on the world's oceans -- twice as many as at the turn of the millennium.

MORE AND BIGGER SHIPS

Year after year, new and ever more massive ships were built, ports were expanded and new scheduled service introduced. The cargo capacity of the world's combined container fleet increased from 4 million TEUs in 2000 to 12.5 million today.

Many became rich in the years of the boom, including ship owners, bankers and investors. In the last decade, the Hamburg became the world's leading center for the financing and operation of new ships. Germans own 35 percent of the container ships in operation worldwide, and close to 60 shipping banks and financiers are headquartered in Hamburg. Hamburg-based Hapag-Lloyd became one of the world's leading shipping line operators.

The demand for container shipping seemed to be bottomless, given the seemingly unstoppable pace of globalization. Goods and commodities began circling the globe at an ever-increasing pace. But now ailing shipping line operators can hardly unload their ships quickly enough.

The global financial and economic crisis has stifled the boom in container shipping, and it has happened almost overnight. In the first six months of this year alone, the shipping industry declined by close to 16 percent.

The new giant ships are now much too big for the cargos they transport by sea, and often they sail half-empty -- if at all. Billions are being spent to expand ports to handle a boom that no longer exists. Leading shipping line operators are on the verge of bankruptcy, as are shipping banks and charter shipping companies.

"There has never been a crisis like this before," says Reinhard Lange, the CEO of Kühne + Nagel, the world's largest sea-freight forwarder. Shipping line operators alone are expected to suffer combined losses of $20 billion in 2009.

EDGE OF AN ABYSS

Drewry Shipping Consultants, the world's top consultant to the industry, warns: "The industry is looking at the edge of a deep abyss." And industry publication Lloyds List writes: "Container shipping was thrown into a full-scale panic."

Hapag-Lloyd, consistently recognized in the industry as probably the most efficient among the major shipping line operators, is struggling to fend off bankruptcy. Its case has attracted the nervous attention of ship owners, banks and shipping company executives around the world.

COSTS NOT COVERED

"At current prices, we aren't making money on any route," Ulrich Kranich, the executive board member in charge of global operations, says. Shipping companies currently receive only about $500 to ship one container from Asia to Europe -- about $300 less than they need to cover their costs.

Although the shipping industry has always gone through cycles, shipping companies now believe that things have changed drastically, and for the worse. "There was never a shortage of cargo in the past," says Kranich.

However, higher rates have little effect on consumers and producers, because the costs of maritime transport hardly enter into the calculation. It costs $10 to ship a TV set from Asia to Europe, while shipping a vacuum cleaner costs $1 and a bottle of beer 1¢. In fact, shipping costs are so low today that it is even worthwhile to ship Spanish tomatoes to China for processing into tomato paste, which is then shipped back to Europe.

Maersk CEO Eivind Kolding makes no secret of his view that the shipping industry would probably be in much better shape if only a handful of global shipping companies were to exist in the future. Many in the industry assign part of the blame for the disastrous situation today to Maersk.

Although Maersk also lost money -- $373 million -- in the first quarter, the Danish shipping company is owned by an oil and gas company that can more easily shoulder the losses.

NO PROFITS

None of the world's major shipping companies is currently turning a profit.

Like Maersk, many have the backing of either financially strong corporations or their governments. The Chinese shipping companies Cosco and China Shipping can rely on the support of their government. The same is true of Japanese shipping line NYK.

But Hapag-Lloyd appears to have been hit by the biggest crisis in shipping at the worst possible time. Because it was forced to transfer its substantial profits from previous years to its ailing parent company TUI, the Hamburg shipping company was barely able to build any reserves.

Hapag-Lloyd is also getting rid of ships it leases. The company owns only about half of its fleet of 128 container ships. The other half are leased and, for this reason, are to be jettisoned more quickly. Hapag-Lloyd has already returned about 30 ships to their owners. Other shipping companies are pursuing the same strategy. Industry insiders say MSC, a Swiss company, does not plan to renew charters on close to 80 ships, while French company CMA which has up to 170 charter ships with charters about to expire.

This, in turn, is becoming an existential problem for many other shipping companies faced with the return of ships they had been leasing to other companies.

PORSCHE DRIVERS

In Hamburg, a small elite of extremely tight-lipped Hamburg ship owners now plays the sort of dominant role in container shipping once played by legendary Greek tanker dynasties. While keeping a low profile, the Hamburg ship owners have earned vast sums of money in recent years. "Even cleaning women drive Porsches," "The chartered ships will be returned in large numbers," warns a leading shipping manager. "Things will get very tight for many people in Hamburg." Another industry executive warns: "The big charter shipping companies will weather the crisis, but there will be a bloodbath among the smaller ones."

A fatal domino effect now threatens to strike the industry. The shipping line operators can no longer pay for their chartered ships, while the owners of the chartered ships and shipping funds can no longer afford to service their debts to the banks.