Forecast for 2012

It's time for the predictions for 2012!

I have done fairly well with my forecasts the last few years.

In 2009 I said we would be in a recession until 2011.

Of course, the word "until" is a bit subjective. 2011 is over.

The U.S. appears it is now starting to come out of the recession,
but things in Europe are looking worse.

I predicted oil prices would be between $50-$100 a barrel. That has
proved to be pretty accurate, although I certainly gave myself a wide
variable!

So, for 2012, what lies ahead?

It's really a tough call. The U.S. no longer is the biggest driver
to the world economy. China is slowing down.

Having said this, this is my best guess.

Shipping companies will continue to struggle. Many of the Greek companies
operating bulk ships will go bust. These are the ones who have their stocks
listed in the U.S., so the investors will get burned.

As for the container companies, that's a difficult call. Everyone has
formed their alliances in an effort to reduce costs. But I don't
think they are managing to control the capacity as will be needed, to get
their rate increases to stick. So, I think these VSA's will allow most
of the carriers to survive 2012

However, I believe ZIM and CSAV might be in jeopardy.
It depends if they can get more money from somewhere. And who
knows the answer to that? There is a lot of cash sitting on the sidelines, looking for a decent investment.

I think the price of oil will be between $80 and $130 a barrel.

I predict the Euro will survive, but the U.S. dollar will once again become stronger. Everyone talks about how bad off the Euro is, but I remember when
it and the dollar were on par.

I think the middle class in China and India will continue
to grow, and living conditions there will improve. So, that at least
is some good news for 2012.

Happy New Year!

Updating my predictions

Well, we are half way through 2009.

Most companies are saying the free fall is over, but when we will see a recovery is certainly up for debate.

My last updated prediction was Jan. 2009.

1) U.S. will be in a recession until 2011
2) Unemployment will hit 10%
3) Stock market? Maybe a bottom around 7500-8000

As for international shipping, I guess 10% of the carriers in existence today will be gone. Probably bought by someone else, but in several instances (especially in bulk and tankers) bankrupt.

So far I am about on target for the unemployment rate and stock market bottom - unless the stock market tanks again.

As for international shipping, we have not yet seen any major bankruptcies. This is mainly because all of the banks, creditors, and owners of chartered vessels are doing everything they can to keep companies in business. The only ones not really playing are the shipyards.

They are starting to accept delays, but only if customers are willing to pay the penalties.

But, things are not looking up, and I think the next 6 months will put the squeeze on a lot of carriers.

This from Lloyd's List

Box lines face fight of their lives as ocean rates fall back to zero

Janet Porter - Tuesday 9 June 2009

CONTAINER lines have just four weeks to reverse the slide in Asia-Europe freight rates or risk going out of business.

click here for link to article