Beware 'cloud cuckoo land'
SHIPPING’S financial crisis has not even started, Jonathan Jones of insurer JLJ Maritime warned today.
“A lot of people have been living in cloud cuckoo land,” he told the MARLAW 2009 conference taking place in Ibiza.
He also predicted that, in shipping, “we will see ‘unusual casualties’”, and in the wider economy credit card debt poses as big a threat as the mortgage debt that precipitated the recession, argued Jones, whose company is based in Athens.
He also queried what would become of surplus newbuildings, prompting Ian Gaunt, an independent arbitrator, to say that China is using government money to finance completion of cancelled but part-paid newbuildings in domestic yard.
That will allow Chinese operators to employ modern tonnage, Gaunt pointed out.
Given the volume of tonnage on order, “about half the world fleet has to go”, remarked Petar Kragic, VP of Croatia’s Tankerska Plovidba.
In just four years, “shipping will look very different. … European governments will have to look at what China and Korea are doing and decide if some support for the industry is needed.”
Chairing the session, Ian MacLean, senior associate at the Ince & Co law firm, predicted that “European shipbuilding is in trouble” because of the scarcity of cruise ship orders and that state support will increase.
“We’ll see fair play go out of the window,” he said.