A lifetime in my trade has taught me to tread cautiously around accepted wisdom. Experience has taught me time and again how a profusion of predicting headlines signals the opposite of what will actually transpire.
This should not really surprise anyone. Because it attempts to cover so much ground (a mile wide), reportage by most legacy media must by definition be superficial (inch deep). Getting to the true picture requires deeper investigation.
Properly researched and compiled books and even in-depth videos help. More so careful filtering of your news sources. I rely heavily on our partners at the FT and WSJ, whose successful business models ensure they possess the resources enabling them to dig beyond the obvious.
___STEADY_PAYWALL___The story below provides an excellent example. While the popular press trumpets an end to globalisation, the FT took a look at what’s actually happening where tackies hits the tar. A rather different picture emerges, one aligning with economic logic.
More for you to read today:
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- Germany to restart mothballed coal-fired plants. Reality of country’s dependence on Russian gas forces a U-Turn on climate change agenda.
- Bitcoin rallies back above $20,000 on Sunday, after hitting 18-month low. Vinny Lingham says it’s critical crypto currency maintains this level.
- France’s Macron Projected to Lose Majority in Parliament. Projected to remain largest coalition after yesterday’s vote, but without seats to form a majority, an apparent rebuke of president’s pro-business agenda.
Global trade is NOT going into reverse says Maersk boss
US and European companies spreading production around Asia rather than reshoring, says CEO of shipping group which moves one-in-six containers
By Richard Milne in Oslo and Peggy Hollinger in London for The Financial Times
Globalisation is not unravelling but the era of ever greater reductions in barriers to trade is at an end, according to one of the shipping world’s top executives.
Søren Skou, chief executive of AP Møller-Maersk, the world’s second-largest container shipping group, told the Financial Times that he saw little evidence of US or European manufacturers bringing production back home. Instead, they were looking for additional suppliers around Asia.
“Global trade is where it is. It’s going to grow more or less with GDP,” he said. “It’s not liberalising more, so we’re not going to see [even] more growth. It’s also not going sharply in reverse.”
The comments from the Maersk boss, whose company is a bellwether for global trade as it transports more than one in six containers across the oceans, contrast sharply with the gloom of many business executives who believe globalisation is under attack, particularly from populist politicians.
Last month data provider Sentieo found that mentions of nearshoring, onshoring and reshoring in company results meetings and investor briefings were at their highest level since at least 2005.
Skou acknowledged the impact of populist political movements and the lack of new trade deals in the US but underscored that he saw no dramatic shift in supply chains.
“We don’t see our customers moving production back to Europe. They’re spreading it around in Asia,” Skou said. “It’s very difficult to see in the short term or maybe even the mid term that you will see a dramatic change in the way the world produces consumer goods.”
Maersk is expecting container shipping volumes to be lower in the first half of this year as world economic growth stalls. But thanks to record freight rates, congestion in ports and supply chain woes, the Danish group is forecasting record earnings in 2022.
Skou said that container shipping could soon be hit by a sharp reversal of the factors that have led to it booming since the end of the first wave of the coronavirus pandemic. He added that there could be a “bullwhip effect” where demand contracts and supply increases, after almost two years of the opposite phenomenon during which shipping groups were unable to respond to a surge in consumer spending. “When it happens, it could go quite quickly,” he added.
He said it was unlikely to happen at the beginning of the second half of the year — as Maersk had previously assumed — but could happen in August or later in the year. “I don’t want to say I’m afraid of it,” he said, pointing to an increase in long-term contracts in container shipping and a rapidly growing logistics business on land.
Skou also made his first public comments on a MeToo scandal that has roiled Maersk and lifted the curtain on abuses of female seafarers in a male-dominated sector after a former cadet claimed she was raped on one of the company’s vessels.
Maersk’s chief executive said that “imagining that can happen on one of our ships is absolutely horrible”. He said the company had known about the alleged rape for almost a year, and had since introduced new policies to ensure that there was always more than one woman per vessel and that the boat’s captain and chief engineer received suitable training.
Maersk employs 350 female seafarers out of a total of 12,000 on its vessels.
The International Maritime Organization estimates that women make up just 1.28 per cent of the global seafaring workforce — or roughly 24,000 seafarers. These crew remain on board for two months or more, and during the pandemic many were at sea well beyond the end of their contracts as ports refused permission to disembark.
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