Features
Inside Opinion: New Truths
It used to be that we had some inalienable truths to cling onto. But the world is changing and so too are the truths that we thought formed a bedrock of accepted thought.
Look at the CSC fiasco for one. Many in the industry thought they would be supported by the Chinese state and not allowed to go bankrupt and default. States don't let state companies go bankrupt, do they?
Well apparently they do now. Sovereign risk doesn't mean low risk any more. If you'd have told me this ten years ago I'd have laughed. Most of us would I think.
Then there's the notion that companies are too big to fail. We've all heard it said, often by important, influential people whose opinions have a greater effect than most in shaping the accepted wisdoms of our shipping industry.
I'd contend it was probably true ten years ago, the idea that a company can reach a critical mass beyond which it is too large to feasibly fail.
The demise of STX Pan Ocean, the definition of a strong private company backed by massive wealth and so asset heavy as to be unlikely in the extreme to ever fail, is a classic example.
Had OSG and probably Genmar been European-based and not been able to seek the refuge of the (some say anti-Darwinistic) Chapter 11 laws in the US, we'd be mentioning those two in the same breath.
Suddenly the accepted wisdoms are out of the window.
People were saying it about CMA-CGM, and who amongst us really thought they would fail? I am just glad we never got to find out how close they came in those dark days, though the cynic in me suggests they may well have come a good deal closer than most of us could have believed at the time.
Brave New World
It's a brave new world, someone told me the other day. Empires fall, markets change and fortunes shift.
The industry does not sit still and never has that been clearer to these tired eyes than right now.
Twenty years ago the bunker industry was dominated by the oil majors. Today, one could argue with convincing merit that it is the huge independents that are making the running.
Few outside of the World Fuel Services boardrooms could have envisaged just how massive and massively powerful that organization has become.
Their independent competition have been expanding too at a heady rate, and it is hard to escape the hypothesis that the growth has come at the expense of the oil majors in part at least.
Business 101 tells us that the market is changing and as it changes it evolves. The next step in a maturing market, according to some at least, is consolidation.
Talking of accepted truths and realities changing and of consolidation, who would have thought twenty years ago that massive players of the day Safmarine, P&O, Nedlloyd and others would all be part of the Maersk group?
And what then, can we expect in terms of consolidation in bunkers?
Is the landscape about to change again right under our feet and in front of disbelieving eyes? Are we going to lose some big names? Are we going to get some new big names? What of our accepted truths we hold today will be swept away in the next few years?
I don't know about you but I can't wait to find out.