Greek Fleet Swells

Shipping by sea is a cyclical business, reliant on global trade, and shipping magnates pay close attention to global affairs. Freight rates were at record highs from 2003 to 2005, but have slipped since. Recent developments, all interconnected, cause worries for the shippers: China’s move to increase interest rates to curb inflation could slow its economic growth; the massive US deficit could eventually slow consumer spending; China announced a plan to diversify its investment portfolio with currencies other than the US dollar; and unrest in rural China could prompt the government to focus spending on the interior, while imposing controls on coastal development. “The only thing that is supporting the dollar at the moment is that the American funds are flowing into China and China is buying the debt,” said the chief executive of a Greek chartering brokerage shipper. “If [China] stops buying the debt, the game comes to an end." Demand is high for ships that can carry wet products, such as oil – with ships sold and re-sold before delivery – and less high for ships that carry dry goods. Still, the shipping magnates have plenty of cash. Greek owners command the largest fleet in the world and, with 364 ships on order, signal confidence for global trade. – YaleGlobal