# Shipping Industry Perils. Sign of Things Coming?



## Denton (Sep 18, 2012)

> THE collapse of Hanjin Shipping, a South Korean container line, on August 31st brought home the extent of the storm in shipping. The firm's bankruptcy filing left 66 ships, carrying goods worth $14.5 billion, stranded at sea. Harbours around the world, including the Port of Tokyo, refused entry for fear of going unpaid. With their stock beyond reach, American and British retailers voiced concerns about the run-up to the Christmas shopping period.
> 
> Hanjin is not alone. Of the biggest 12 shipping companies that have published results for the past quarter, 11 have announced huge losses. Several weaker outfits are teetering on the edge of bankruptcy. In Japan three firms, Mitsui OSK Lines, NYK Line and Kawasaki Kisen Kaisha, look vulnerable. Activist investors are now pressing for them to merge to avoid the same fate as the South Korean line.


Profits overboard | The Economist

I'd think shipping health is sort of like the canary in the coal mine.

Yet, the president claims the economy is better and we are no longer in a recession.


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## Sasquatch (Dec 12, 2014)

Have the longshore man demanded so much money no that the shipping company's can't afford to stay in business? 

Sent from a Galaxy S5 far far away.


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## stowlin (Apr 25, 2016)

Shipping industry is in for a really rude awakening. I attended a seminar this past weekend for a company that is offering small craft boats like mine remove navigation of our vessels. There was plenty of chatter about research and development of new ships (cargo ships) that will not be manned and drone like sailing of the high seas. On shore we have Amazon testing drone delivery; Mercedes just announced thy are working on a truck that pulls into a neighborhood and robots go door to door handing out mail and packages, return to the truck and move onto the next neighborhood.


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## Denton (Sep 18, 2012)

The point which seems to have been missed is the continued global slowdown is now killing the shipping industry.


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## stowlin (Apr 25, 2016)

Denton said:


> The point which seems to have been missed is the continued global slowdown is now killing the shipping industry.


Not missed. I just think this is why shipping companies are reluctant to give into the unions, and the unions are reducing productivity. Of course our economy is an issue, but so is the world economy. Brexit will have a small bit to do with it. Our elections could also be impacting trade at the moment. LOTS of things. My point is more about the future of the industry that is on the cusp of major major changes.


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## Auntie (Oct 4, 2014)

Sings are every where and I don't like where they are pointing.


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## Camel923 (Aug 13, 2014)

Denton said:


> Profits overboard | The Economist
> 
> I'd think shipping health is sort of like the canary in the coal mine.
> 
> Yet, the president claims the economy is better and we are no longer in a recession.


Obama is right as usual we are no longer in a recession, we are in a depression. Massive government programs that pay people not to work prevent the bread lines of the 30s. From the view of the 12th Imam this is way better ( if your goal is the distruction of America).


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## Denton (Sep 18, 2012)

stowlin said:


> Not missed. I just think this is why shipping companies are reluctant to give into the unions, and the unions are reducing productivity. Of course our economy is an issue, but so is the world economy. Brexit will have a small bit to do with it. Our elections could also be impacting trade at the moment. LOTS of things. My point is more about the future of the industry that is on the cusp of major major changes.


There is where you are losing me. 
The global economy has been sluggish for many months and this isn't due to union work slowdowns or stoppages. This has caused a serious strain on shipping companies and it seems they are beginning to break.

QE's one, two and infinity haven't turned around the economies. 
Brexit isn't the cause, nor is our election as the shipping crisis isn't the illness, it is a new symptom.

Things are straining and cracking. One of these days something big is going to snap and it'll be more than a news item to us.


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## Camel923 (Aug 13, 2014)

You can only violate the laws of nature, physics and economic only to a certain amount prior to having an adverse consequence. The adverse consequence has been put off so long that when the market correction occurs, it will be worse than what was staved off to allow business as usual.


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## Prepared One (Nov 5, 2014)

The house of cards was bound to collapse sooner or later. That's just one of several dominoes teetering. Once one goes they all go.


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## stowlin (Apr 25, 2016)

So if you are a manufacturer in China and you want to ship your goods to the US is now the time? Really is now the right moment? What if when the ship gets to the US the union decides it won't unload? (happened just recently backing up a lot of goods) What will the dollar value be in euro's after the Brexit? What about in dollars? What if the election goes to Trump (now we might favor that but they've been told the world will end). Will they be unloaded? My guess is the goods for the holiday season have already arrived in large part. We are a consumer nation. So that which is being shipped now is likely to be consumed in January - how was consumption last January - March? Storms were such that consumption was pretty low in the US. Now's a lousy time to ship unless you can get it in - before the holidays and they could. But can they reach stores by holidays?



Denton said:


> There is where you are losing me.
> The global economy has been sluggish for many months and this isn't due to union work slowdowns or stoppages. This has caused a serious strain on shipping companies and it seems they are beginning to break.
> 
> QE's one, two and infinity haven't turned around the economies.
> ...


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## tango (Apr 12, 2013)

It is a slow crawl to collapse, these are just indicators.
Brace yourself, it will only get worse


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## Denton (Sep 18, 2012)

stowlin said:


> So if you are a manufacturer in China and you want to ship your goods to the US is now the time? Really is now the right moment? What if when the ship gets to the US the union decides it won't unload? (happened just recently backing up a lot of goods) What will the dollar value be in euro's after the Brexit? What about in dollars? What if the election goes to Trump (now we might favor that but they've been told the world will end). Will they be unloaded? My guess is the goods for the holiday season have already arrived in large part. We are a consumer nation. So that which is being shipped now is likely to be consumed in January - how was consumption last January - March? Storms were such that consumption was pretty low in the US. Now's a lousy time to ship unless you can get it in - before the holidays and they could. But can they reach stores by holidays?


So, you are going to blame last year's longshoreman strike on the left coast and the weather for what is now years of global economic stagnation?
Prognostication over things like the possible implementation of Brexit has nothing to do with the many months of lousy economy that has led to a distressed shipping industry, any more than strike by one local in one country.


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## stowlin (Apr 25, 2016)

I don't blame it all on one thing; its not one thing. Its a culmination of many things - those included. The technology changes included. A pretty big ship builder just wasted $33 million studying the development of "drone" ships - do you know why?  Because they've figured out how to make the existing ships drones. Don't need new one's. Which do you think is going to happen faster? Which is going to be cheaper? You know the answer. Those longshoremen are next. Robots can do anything that is repetitive - guess what unloading a ship is!

Europe is in such a flux thanks to their millions of new muslim occupants, brexit, Greece, and the rest of them that it impacts the global economy. If I am not mistaken they were the second largest consumer group on the planet - we're the first of course. Now where do we stand? Pending election, uncertain bubbles, shot our QE wads, and we're about ready to pay for the doctor we didn't get to keep with obamacare. Add to this the general season of things and the shipping companies are in a ripe mess.


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## Boss Dog (Feb 8, 2013)

Denton said:


> Profits overboard | The Economist
> 
> I'd think shipping health is sort of like the canary in the coal mine.
> 
> Yet, the president claims the economy is better and we are no longer in a recession.


He also said, "If you like your Dr. You can keep your Dr." Never mind he's driving him into early retirement.


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## stowlin (Apr 25, 2016)

Putting this equation on economy only and taking out all the other elements I believe also impact the issue lets take a look.

Housing is in an upward bubble in my opinion; if it stops it could drop like in 08/09. If it slows down and stops skyrocketing like it has I think we'll be fine.
Stocks have had 2 bad days out of 3; but overall are up solidly; you may recall they dropped pretty good ahead of the houses in 08/09.
Metals (silver/gold) and energy commodities are low now, oil was way up there in 08.
Unemployment the kind reported which means little but its still an indicator is 3 points lower.
Unemployment insurance claims are low.

I believe in cycles. We're due a recession no doubt. The last one was a near depression so people are on edge. Still I think a recession is likely and the question is will the rhetoric and emotion drive it into the world ending or will we bounce out of it like we have in the past? 

I'm also a believer in what happened to Japan 1990 is what is happening to us. The flat lined for 20 years plus. We're only 6 years into that and could remain flat lined for another decade.


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