In large measure, the global economy depends on cross-border trade, while cross-border trade depends on one industry, in particular: transportation. With that in mind, the following report from the Financial Times, "Tung Gloomiest Yet on Shipping," seems somewhat at odds with recent remarks from the suddenly born-again optimist who runs Fedex [italics mine]:
The chairman of one of Asia’s biggest container shipping companies has given the gloomiest assessment yet of the sector’s future by a senior industry figure, after Orient Overseas International announced $401m losses for 2009.
CC Tung, whose family controls the Hong Kong-listed company, warned that the recovery of the world economy and consumer demand were likely to be sluggish, while there continued to be an excess supply of ships worldwide.
The excess ships, either under construction at shipyards or laid up out of use, would need to be absorbed over the next three to four years, he said. Prices would fall further if operators brought currently idle ships – which account for about 10 per cent of current world capacity – back into service too quickly.
“An imprudent reintroduction of capacity currently idling or laid up, if mismatched to demand, could see fresh rounds of rate cutting,” Mr Tung said.
FedEx CEO never heard of the old Arabic proverb
(turn your tongue 7 times before speaking )
and in a moment of candor he say's the truth.
His " optimistic statement " is nothing more than PR.
There is no doubt in my mind that he is very
much aware of the situation.
Posted by: roger | March 22, 2010 at 02:17 PM
Some thirty years ago, a friend asked that I stop 'talking the market down' - I promised to begin 'talking the market up.'
The market went on, regardless of my talk.
Posted by: GoldSpotMarket | March 23, 2010 at 08:25 AM