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This has nothing to do with oil, it has to do with over-capacity in the industry.
by frandroid 10y ago
This has nothing to do with oil, it has to do with over-capacity in the industry.
- sqeaky 10y agoIf we take your "nothing" to mean "nothing practical" to do with oil, then you are completely correct. If a boat could be operated for free, then overcapacity wouldn't matter, just ship boats underloaded. Of course there are costs so that notion is silly. I suspect he thought that fuel costs were among the biggest costs in shipping. I bet licensing and legal fee are the biggest costs, then I bet personnel cost come in second, then boat maintenance, then somewhere below that oil.
- r00fus 10y agoDoes over-capacity indicate a reduction in worldwide demand?
- themaninthedark 10y agoShort answer yes. Long answer, when the global financial crisis hit it lowered demand. But shipbuilding has a long lead time and shipyards can't/won't stop production(what do you with a half finished ship, you can't just put in storage). So all the ships that were ordered get built. By now the economy is starting to recover but your shipping capacity is greater than demand. So prices fall and the least efficient companies go bankrupt. http://www.dailymail.co.uk/home/moslive/article-1212013/Revealed-The-ghost-fleet-recession-anchored-just-east-Singapore.html http://www.dailymail.co.uk/home/moslive/article-1212013/Reve... Shipyards are probably next.