hyper-imaginative video game scriptwriters had conceived the destruction
of New-York's twin towers. September 11th, sadly, the real overtook the
virtual, shattering the confidence of the most powerful nation,
questioning the very notion of risk, and undermining the world's biggest
insurance and reinsurance groups.
This unthinkable drama will have little effect on the shipping
industry, apart from temporarily on cruises, but it has been a brutal
reminder of the worsening world economic situation during the year 2001.
As from the second quarter, the slowdown in the American economy,
followed by Europe, weighed heavily on seaborne trade and thus on freight
rates, first with dry bulk ships and containers, then somewhat later on
tankers, throwing a light on the fear of overcapacity.
Even though the shipping world is accustomed to cycles, they are
nonetheless aggravated by unreasonable actions of players outside the
market, financial and fiscal investors - such as in Germany with
containerships - who inflate newbuilding orders beyond all reason;
virtual in the hope of non-ending growth, real in the actual economic
downturn and overcapacity.
This year has also been marked by the meltdown of technology shares,
which has affected all the financial markets, although it is not the
technology itself to blame but that of irrational market values.
In shipping as in other sectors, e-business counts its survivors
amongst the websites which have been developed on the basis of the real
In the energy business, a leading company, Enron, a model of its
kind by inventing, innovating, and arbitrating as a market-player in new
energy areas, has collapsed. Its virtual success was stricken down by the
real needs and by questionable accounting methods; virtual commitments
off-balance sheet, real accounts in balance sheet, or the reverse?
This rude awakening reminds everyone that markets impose inherent
rules like gravity, impossible to ignore, and that the real economy has
taken a cruel revenge this year over the virtual economy.
In France the incentives for promoting the French flag fleet are
being held back whilst some of our European neighbours have made
successful progress and are able to expand their fleet under national
flag. French shipping policy no longer corresponds to our economic
ambitions and here again we can deplore the virtual political discussion
compared to the real action needed.
The much hoped recovery, whose return is predicted by some in the
course of the second half of 2002, will depend primarily on the health of
the American economy; but a close watch has to be kept over the Japanese
currency whose weakness could bring about a series of devaluations in the
Far East, which could put into question the fragile balance recovered
since 1997, and weigh heavily on newbuilding prices amongst others.
The prosperity of the shipping sector will obviously depend on the
economic revival but also on the respect shown to the strong balancing
forces at play - newbuildings, fleet in service, demolitions - to
which any excesses will quickly bring us back to the fundamental reality
of supply and demand.