Wednesday, January 19, 2011

(Slow) Shipping News

In shipping news, Bloomberg is reporting something interesting:
Container vessels are sailing at the slowest speeds in at least two years to save on fuel costs, driving up freight rates and the shares of shipbuilders.
The global fleet of about 4,660 carriers moved at an average of 11.44 knots last month, 7.4 percent less than a year earlier and the lowest since Bloomberg began compiling the data from AISLive in May 2008. Sailing more slowly saves fuel, the price of which has more than doubled in two years, and curbs the availability of ships, shoring up income for owners.
Not too long ago, over-capacity was the watch-word in the shipping industry, as global trade fell off a cliff. But now, the shipping lanes are slower even with more freight being hauled.

Bloomberg has one additional tid-bit: 
“Slow steaming is going to bring the biggest change to the shipping industry since World War II,” said Lee Sokje, an analyst at Mirae Asset Securities Co. in Seoul, whose recommendations on Hyundai Heavy Industries Co. and Samsung Heavy Industries Co., the world’s biggest yards, earned investors at least 63 percent in a year, data compiled by Bloomberg show. “It was only last year there was concern of oversupply but now we may have to worry about undersupply.”
Mr. Sokje might be exaggerating abit about “the biggest change to the shipping industry since WWII”—however, it’s definitely worth keeping an eye on shipping into the near future.

If shipping and freight rates begin rising—product of a combination of higher fuel prices and undersupply brought about by slow sailing—these price rises will reach the consumer sooner rather than later. 

And rising consumer prices means . . . 


  1. ...means that I wish the fuckers would quit fucking around and let the fucking shithole collapse upon itself, NOW. I'd much rather take the heat and suffer such that my kids will prosper. Must be the Nomadic Generation personality of a 13'er in me.

    BTW, looks like the Baltic Exchange Dry Index has been flushed once again.

    C deK

  2. Gonzalo,

    Zero Hedge is reporting extra ships comming on line

  3. Sounds like the kind of story that makes Unions get hot and happy about. What happen to the notion of productivity? If the vessels are moving slower, the cost of labor to tend to the transport would be greater - right?

    I just can't wait until Pelosi puts on a sailor hat and starts pushing ship building as the answer to America's unemployment crisis. Yikes!

    More seriously, I suspect these stories are a setup to help explain why products will not be making it to consumer shelves in a timely manner.. (something to think about). The whole thing sounds fishy!-

    Kansas gripping here. Thanks for this entry.


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The cult of stability is a culture of death.