In the oldest mansions in New England, especially those that belong to or belonged to renowned families such as the Forbes or the Delano, you can still find portraits of a slim and enigmatic Asian who, dressed in traditional Chinese fashion, observes from s. XIX – the most copied of these pictures was painted in 1837 – to his American friends. It is about Wu Bingjian, the richest individual in the world between 1810 and 1843 and leader of the Canton Cohong, a group of merchants that had a monopoly on trade between their country and western merchants who traveled up the Pearl River in galleons and ships. Bingjian helped to enrich many entrepreneurs from the United States, a country that had just become independent after the Revolution of the Thirteen Colonies (which began precisely as a protest against the tariffs that the British levied on tea).
Currently, the port of Guangzhou, where the Portuguese first arrived at the beginning of the s. XVI and in which Bingjian built his empire, it is the fifth largest in the world by container traffic. Hong Kong, a city founded by the British Empire after the First Opium War (1842) at the mouth of the same river, is the seventh; and that of Shenzen, upstream, on the same shore, the third. Three of the ten largest ports in the world (the remaining seven are also in Asia) are bathed by the Zhu Jiang (or Pearl River) and many of the container ships that transport the mobile phones, computers and toys that we will order sail from this Christmas. And this year, as happened three centuries ago with shipments of porcelain, we once again await our goods with uncertainty.
The history of shipping is the history of the economy and of humanity. Or vice versa. This industry has generated a good part of the features and mechanisms (commercial, legal, technological and even ideological) most characteristic of capitalism. For example, it is a sector obsessed with efficiency that has ensured that 1.6 million sailors (a minuscule percentage of the world’s population) handle 90% of the cargo that moves on the planet. It is also an activity with its own heroes, figures whose tenacity and ingenuity have benefited all sailors. It is not necessary to go back to the Age of Discovery: we owe Ferdinand de Lesseps (1805-1894) the Suez and Panama Canal, and possibly thousands of lives to Samuel Plimsoll (1824-1898), a British politician who He fought to avoid overloading the ships.
Fundamental principles of liberalism, such as freedom of movement and communication appear in the s. XVII when powers like Holland seek to take advantage of the oceanic routes dominated by Spain and Portugal, and institutions such as the stock market arise to finance maritime expeditions. Another curiosity: the origin of some insurers is in a remote London cafe, Lloyd’s, where around 1695 a pamphlet elaborated on the basis of rumors was distributed that reported on the reliability of each ship.
He has no throne or queen
Malcom McLean was another one of those visionaries who changed everything. “A ship makes money when it sails, in port the costs multiply”, this American used to say to defend his idea. Looking for the best way to move his company’s trucks by sea, McLean designed, in 1956, some prismatic aluminum boxes that could be towed and adapted a couple of old tankers to transport them: he had invented the containers. Until then, goods had been stored and secured – stowed – by hand in the holds of general cargo ships, a process that was almost as time consuming as navigation itself. With the use of containers, safety during the trip increased (it is more difficult for cargo shifts to occur in the event of a storm) and the first tests showed a drastic reduction in the time and labor required for loading and unloading operations. The operating costs per ton were more than a hundred times lower than usual until then.
McLean saw his invention normalize and give rise to both a new type of merchant ship, seemingly scalable to infinity —from the 58 containers of those remodeled tankers, it has been converted to container ships with capacities of up to 24,000—, as well as changes in the landscape. Coastal: automated cargo terminals with large cranes working simultaneously, have been growing in size for decades and moving away from city centers.
If in 1979 the million containers handled by Spanish ports were exceeded for the first time, on September 9, 2021, more than 13 million had already passed through our terminals. While other traffics, such as bulk or crude oil, take place between industries, practically all products destined for the final consumer – furniture, electronics, clothing or refrigerated food – arrive to us in containers. For this reason, when at the beginning of this year an anomalous increase in the price of freight was noticed, all the alarms went off.
Indices such as the SCFI (which groups the prices of the main routes that depart from the port of Shanghai) or the VCFI (which takes the routes from Valencia as a reference) have multiplied by three or four in 12 months. “These strong and abrupt increases in container freight rates are not common and have never occurred with such intensity before,” says Rafael Cerezo from ANAVE, the Association of Spanish Shipowners. For his part, Diego Perdones, CEO for France, Iberia and the Maghreb of Maersk, the world’s largest shipping company, points out that “we are going through an exceptional situation that should return to normal once the effects of the pandemic stabilize.”
“We have had constant problems for more than 20 months in a row impacting the global supply chain in one way or another,” explains the Maersk executive. Specific and local problems that cause a domino effect. ” Although it is difficult to pinpoint a specific date, it seems that everything started in the second quarter of 2020 with a drop in demand caused by the pandemic. “This was followed by a much higher rise than anticipated. The combination of high demand with a shortage of workers (affected by the pandemic) caused the perfect storm. Furthermore, in March 2021, the blockade of the Suez Canal slowed down the recovery. In May, the 30% drop in productivity due to COVID cases in one of the world’s largest ports, Yantian (China), made things more complicated. And so on until reaching the current situation in Los Angeles or Felixstowe (United Kingdom). The main problem today is not at sea, but on land: there is a lack of infrastructure around the ports, there is a shortage of labor and warehouses and there is a lack of truckers ”.
More and more ships
There are no immediate solutions. Cerezo recalls that in maritime transport the supply is very rigid, “so that, in market situations in which it is already fully employed and it is impossible to increase it in the short term, as is the case in container lines, some fluctuations, even moderate demand can lead to wide-ranging price changes. When this situation occurs, shipowners inevitably tend to order many new vessels. Undoubtedly, this year the new container ship contracts will mark a historical record and the tonnage in the order book is already more than 20% of the existing fleet. When these ships begin to be delivered, especially from 2023, the demand will foreseeably have normalized and freight rates will drop drastically as has happened so many times in the past. “
“We are trying that space in ships or in containers is not the source of bottlenecks, lengthening the useful life and renting all the additional boats that we have been able to find,” adds Perdone. “The crux of the issue is not how many containers, ships, trains or warehouses you have, but the ability to provide flexibility and agility. For example, if there is a problem in a Chinese port and it is not possible to ship the cargo by ship, I can put it on a train that crosses Siberia, unload part in Saint Petersburg and send the rest to Malmö, Hamburg or Cáceres by plane or barge . “
Aristotle Onassis bought his first six ships during a time of low demand, the Great Depression, at a very favorable price. He stayed with them for a few years until the demand increased and they brought him large profits; later, it did the same with old Liberty freighters used by the United States to deliver supplies to the Allies during World War II. Today such a strategy would be impossible, says Cerezo from ANAVE: “Shipowners cannot afford to have oversized fleets due to their very high costs. Having outdated ships would mean having to assume a very high fuel consumption and not being able to compete in the market ”. Of course, large companies such as IKEA, Walmart or Amazon have recently resorted to an unusual practice to insure their operations: chartering entire vessels alone. “It does not seem like something that is going to settle in the long term – continues Cerezo – because except for certain chargers and in very specific cases, it will hardly be a saving”. “The additional complexity of maritime transport has to do with the size of the ships and, although they are very powerful, these companies alone would not fill the ships with 20,000 containers that sail with weekly frequencies,” ditch Perdones.
It is impossible to assure that there will not be a more serious shortage situation than the current one – these months, in addition, raw materials and semiconductors are scarce – but, for the moment, the problems are hardly visible to the consumer, who notices, above all, inflation or delays in the delivery of your orders. In any case, all experts agree that shipping is a cyclical market, so sooner or later there will be an over-investment situation that will lead to a drop in prices. Meanwhile, in Maersk they believe that European infrastructures are responding well to this crisis and are optimistic: “It is important to highlight that, despite the isolations, closures and difficulties, the supply chain has not stopped working and the shelves of supermarkets and hospitals have never been empty. More specific situations may occur that slow down operations but we do not see, in the short term, structural elements similar to those that are causing complications in the Port of Los Angeles [donde la falta de transportistas de tierra provocó en octubre largas colas de cargueros]”.
When the years go by and we have forgotten all these problems – even if our new smartphone He’s not on time this Christmas – maybe we’ll spot an exotic celebrity that no one knows yet today. Perhaps it is the new husband of a former first lady or a recurring figure in dusty old portraits, probably an eccentric millionaire. Then someone will tell that that man or that woman knew how to take advantage of the 2021 maritime transport crisis to make a fortune and that is how their legend began.
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