Wait and see – 기다리고 보아라 – applies also in shipping

Slow start of the week. And my bet to tell this week will be for shipping a « wait and see » one. Between the politics in one side :

  • G7 feedback (and any new trading restrictions which may come up)
  • Trump Kim Jong Un summit
  • Opec’s decisions about oil pricing politic

And on the other side the

  • soccer world cup kick off
  • end of Ramadan in many Mueslim Countries on 15th June

many good reasons for market players to be on a waiting mood.

Also last week twice I mentionned the discussions during Posidonia about Owners’ decisions, not to decide anything really concrete, on the 2020 sulphur Cap. I was reading these comments, written by Simon Ward, one of the Greek boss of well known brokers’ house, quote/unquote from his words on linkedin : «The buzzwords of this Posidonia have of course been sulphur, cap and 2020 in various combinations. I am thoroughly sick and tired of discussing it; I know it is extremely important, but predicting the outcome for the market is a mugs game. Considering there are so many different factors to consider, it is no surprise to me that there is no rush to install scrubbers in the fleet. Don’t criticise owners for their complacency, step into their shoes for a minute and consider their point of view: if the outcome is unclear, this is not a measurable risk but a speculation with no obvious reward. The solution to me is fairly simple: the market will decide, and as we know the market can be irrationally, and impersonally, brutal. In the meantime perhaps the best that owners can do is to wait and see; to me that is utterly sensible from an investment point of view. »

This point of view can be of course understandable and yes,

  • why Owners would need start spending millions in equipments that might not be the best solutions ?
  • To go further, why this sulphur emission shall be solely supported by Owners ? Aren’t the ships burning fuel to ship charterers cargoes from A to B ?
  • Should not it be somehow supported by charterers, when we can see for instance this kind of corporate message (Here it’s from Louis Dreyfus, but same can be found for any major charterers player)

It’s then everybody’s responsibility.

I’m tempted to be less on the same track as Simon when he’s saying « the market will decide, and as we know the market can be irrationally, and impersonally, brutal »

As if, Market would be a beast, Market would be a creature with absolute nobody having control on it. This is, to me, an easy solution to say « It’s not my fault, it’s market’s fault » (and adding « and as you know, nobody’s controlling the Market »). When maybe the best way to have somehow a control on the market is to take decisions and anticipate changes.

To conclude on Posidonia, another article here about 5 Most exciting things to Watch out for in Shipping industry, from World Maritime News :

  1. Freight Perspective
  2. Digitalization and used of advanced analytics
  3. Posidonia is the most exciting thing in shipping right now (well now it’s last week)
  4. Greener fuel
  5. India

Fancy bit more details ? here it is

Jerome

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