Looking Ahead

When shippers, ocean carriers and others gathered for The Journal of Commerce’s annual Trans-Pacific Maritime Conference three years ago in Los Angeles, the circumstances were far different from what the shipping industry faces at this year’s gathering in Long Beach.

That’s evident enough on the surface — the U.S. and global economies don’t look anywhere near meltdown, of course — but the real differences between 2009 and 2012 are so significant that they demand attention, because a closer look will tell you a lot about what’s happened in the shipping industry, and where it is going.

The gloom in the room just a few months after the Lehman collapse, generally now seen as the signature moment in the collapsing U.S. economy, was palpable. And Ron Widdows, then chief executive of APL parent NOL Group, sent a dark cloud across the gathering by opening the meeting with a prediction that low rates would decline even more and that mounting losses would grow to unprecedented levels under the gathering storm brought on by plunging demand.

That was pretty much as 2009 turned out, at least until ocean carriers triggered turmoil with their abrupt and widespread withdrawal of capacity.

A bit more than a year later, an executive at another carrier (it’s not important who) summed up the roller-coaster market, with its tight capacity and deep divisions over contracts and rates, by saying that no one could have foreseen the steep decline in demand and sudden upturn.

Yet those wild swings were very much foreseeable, and that may be the most important lesson from the global trade recession, and acting on the lessons of 2009 may be the best outcome in 2012. The signs of impending market activity for shippers and carriers, the information, are out and available if only each side would pay attention to the information and to each other.

That information ranged from major shippers saying, in the immediate aftermath of the Lehman collapse, that “cash is king,” and matching the sentiment with a dramatic drawdown in inventories. For shippers, the signs were there not only in carrier statements at meetings such as TPM, but also in the massive losses that publicly traded companies began reporting in early 2009.

There was no reason to think then that operators wouldn’t act to stem those losses, just as it would be foolish to think the same thing in 2012 as reports such as that of Maersk’s loss of more than $600 million fill the news.

This business, The Journal of Commerce, has tried since 2009 to bring greater transparency to the market, to create a strong forum for an exchange of information that is meaningful for all sides of the shipping equation. To us, that has meant not only transparency for carrier actions (you know, rates), but also a clearer window on the drivers of demand in the world of shipping and logistics, including big economic trends and the strategies of the companies that ship the goods.

That has been my focus since I took my position in February 2009, with the issue exactly three years ago my first as editorial director. With this issue, I will leave the company to join another publishing operation outside the transportation world.

I’ve been honored and humbled to have this role at a publication with the storied history of The Journal of Commerce, and privileged over the past 20 or so years to work with the many smart, driven, colorful and generous people that I have met in this company and the larger world of trade, transportation and logistics.

Paul Page is executive director of The Journal of Commerce. He can be contacted at 202-355-1170, or at ppage@joc.com. Follow Paul Page on Twitter, www.twitter.com/paulpage.

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