IT IS BECOMING A CROWDED MARKET
Something has to give. There is no question all cargo-combination, especially Asian carriers, are very worried right now. How are their fleets going to be deployed now China is slowing to a crawl and the world is starting to look inwards for its very survival? It is now becoming clear that globalization has not attained its lofty goals in sharing the wealth and countries like China are at the end of the day going to end up being worse than when they embarked upon the course of opening up factories to produce in the main billions of tons of junk. As nationalism and protectionism becomes the order of the day for the western world, third world countries are going to be left out in the cold. Yes, some countries such as China and India created some wealth over the past fifteen years, but at what expense? Every river is polluted with toxic waste, the air quality will reduce the life span and health of its populations and the poor will now become poorer. It is hard to see any long-lasting benefits.
I am still bullish on America being the first to move out of recession, followed quickly by Europe. There is hope some South American countries, especially Brazil will continue on the path of economic expansion, once the financial markets return to stability. This is where I see America’s future and unlike most experts, who are still betting on Asia, I believe the great experiment of Globalization is over, history. Rampant consumerism has rapidly disappeared never to return because banks have seen to that by massively reducing credit. How many more flat screens can fill a house, how many more cheap George Foreman grills can clutter kitchen benches, how many more pairs of Nikes can fill a closet floor, how many more garages can be converted to store rooms filled with junk never used toys? America is speaking with its wallets. Circuit City is in bankruptcy, Best Buy is heading for trouble and every department store chain says they are going to be in for their worst Christmas Season in history.
How we emerge from this recession poses more questions right now than there are few answers. One thing for sure is Maersk super-container ships will be leaving Chinese ports with only their cargo holds full with containers and Chinese airports will be cluttered with parked up 747 freighters. China’s latest announcement of huge investment into infrastructure at home better work for them as export related jobs are already rapidly drying up. India allowed its entrepreneurs to borrow and buy up large and develop all sorts of businesses. Now the chickens are coming home to roost. Mr Tata, who has made antiquated cars for fifty years thought he could buy into modern technology by borrowing his way into taking over Jaguar/Rover from Ford. Bad decision; His “savvy” business acumen for years may have worked in dumping poorly made vehicles onto the local market, but the western world cannot get its head around such exclusive brands now being in the hands of a third worlder. Both brands are doomed to oblivion unless some enterprising Briton buys them back.
It is a rapidly changing world with my recommendation to place your bet on protectionism becoming the norm. If I were a retail forwarder, I would be strengthening up my network of partners in Western Europe, looking to opportunities in South America and leaving China to the multi-nationals to carve up what’s left amongst themselves. As a wholesaler, I am still banking on the South Pacific as my niche market. It’s a case of first up, best dressed!
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