Technology there when it’s needed
Friday, 15 June 2012 | 00:00
Posidonia, the great Greek shipping show, has been and gone for another two years, with hopes expressed that when it comes around again, the climate for growth in the maritime world will be more benign. There are also fervent hopes that the economic situation in Greece will have improved and more than a few suggestions that the country’s shipping sector can play a major part in this recovery.In such febrile times, much of the debate that circulated at the Posidonia show seemed almost incidental to the “real” world in which ship operators find themselves. Should owners be buying the greener ships that technology is developing, scrapping more of the fleet that is in being? Where is the finance going to come from, with the investing public generally licking its wounds, the banks backing away from lending and desperately trying to avoid ending up as the owners of ships themselves? There is probably a good case for doing nothing at present, letting the crisis run its course, if this is indeed an option.
Shipbuilders, who see their orderbooks evaporating, are selling their “eco” ship designs with an air of desperation, knowing that shipbuilding capacity worldwide is running at some 40% more than is needed. But it is also worth noting the technological development that is running at a very high level, and the economies and efficiencies that they produce. It is probably true that there are products on the market now that can be applied to existing tonnage in order to upgrade it at a fraction of a newbuild’s costs.
It is also something of a comfort to note that this useful technology is not going to go away and will be available when people wish to build new vessels once again. Look back to the 80’s and the great explosion in ship efficiencies that were available in the “improved” ships that were to be found on the market in later years. It is a process that accelerates in hard times, and slows down when rates soar and demand for new ships is at a high level.
Will the finance for new ships be there, when people wish to buy again? Once again, it is worth looking to our history books to seek an answer. Those of a certain age can recall these debates about the availability of finance being repeated at regular intervals down the years, with the same doubts being expressed. They will also recall that while there is a permanent “cadre” of banks and shipping financiers which understand their market and have a long relationship with their customers, there are others which “dabble” in ship finance, coming in to lend when times are good and risks appear small, and disappearing (often with burned fingers) when downturns come.
History tends to inform us that there is a sort of self-correcting mechanism in operation here, and that those credit-worthy owners who have good strategies for the employment of their ships seldom have difficulty in obtaining finance. There may be a lot of shouting about new banking regulations, and long faces at the downfall of public enthusiasm for shipping offerings, but the fundamentals probably remain intact. The term “credit-worthy” tends to mean what it says, just as it always has.
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