The only thing coming down shipbuilders chimneys this Christmas is a big fat ‘cancel’ notice.
The boss of China Ocean Shipping (Group) Company, Capt Wei Jiafu, is always trotted out at big maritme conferences in China to share his wisdom with the assembled delegates.
Stepping from the stage after his presentations, Jiafu is instantly smothered by hordes of Chinese reporters, both local and from Hong Kong, who regard him as one of the “rock stars” of business on the mainland.
The reverence is maybe over the top, but when the head of China’s largest carrier says 40 percent of new vessel orders this year and in 2010 will be cancelled or delayed, his comments get wide coverage and are taken very seriously.
You can imagine the shipyards pooling their financial resources – which can’t be very much in these troubled times – and trying to shut up the good captain. Now would be a time for spin, not plain speaking, they must be thinking.
But we should probably have a minute’s silence for Asia’s big shipyards that have gone from a state of euphoria to one of deep depression in just 18 months. Cosco itself has cancelled 126 orders for bulk carriers, no doubt using its leverage as a state-owned carrier with the state-owned yards. Capt Wei said delivery of some box boats on order had been delayed for up to two years but never gave any numbers.
All other carriers with extended order books are frantically trying to do the same. Shipyards are understandably reluctant to cancel orders and more open to delayed deliveries, and the carriers appear prepared to gamble on business being back to its booming best in two or three years.
It still leaves the yards in a bind. Efficiency for a yard hinges on a skilled workforce, and the last few busy years have seen yards building up a vast number of workers adept in churning out big container ships, sometimes in months. It must be painful to have to release such staff in the hope that they will be available in a couple of years.