Container Ships, a Greek Opportunity?

By Kevin Oates

Just last year there was optimism that the large number of post-panamax size vessels on order and due to be delivered through to end 2002 could be absorbed into an expanding market without disturbing rates. It was known that all these vessels would be deployed on the major east – west trades being Europe to Far East, Transpacific and TransAtlantic. The reason for the optimism was because the container business had been growing and growing for a couple of decades. What could stop it? Projections for growth in world GDP were still at 2.5% to 3% and therefore the expected growth in container demand was expected to be some 9%. Those in the know use a rule of thumb which goes like this: growth in world trade normally outstrips growth in GDP by some 3% and growth in containerisation exceeds growth in world trade by another 3%. 3 + 3 + 3 is 9%. Quite simple really!

But unfortunately the rule of thumb calculation has defaulted. Or not so much the calculation; more the starting point. Much of the world is in recession and global GDP estimates are now hovering at about 1%. Container shipping is being hit hard. Freight rates have collapsed and vessel values are expected to follow.

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