COLUMN | Shipping on demand in these troubled times [Grey Power]

(Representative photo only)

Among the grim news emanating from every quarter, which filled the morning newspapers recently, was the frightful threat of a shortage of tea.

This was on account of the supply chain being suddenly lengthened by some 3,000 miles with the Houthi pirate campaign in the Red Sea, and their attacks on shipping that had been loosely identified by Iranian Revolutionary Guard Intelligence as being US- or UK-owned, or connected in some way with the state of Israel.

In the 19th century, this staple encouraged the great leap forward in ship design, giving us the tea clippers, and in two world wars, it was prioritised for shipping space, despite the submarine menace. Its price was, an analyst forecast, bound to rise dramatically. Inflationary pressures seemed likely to be bearing on the exchequers of the tea-drinking nations that depended upon this vital fluid, even though coffee was the more fashionable alternative these days. It was not news destined to cheer one up, over the morning’s first cup.

To make things worse at the breakfast table, although largely unconnected to the Yemeni drone-slingers, there was a disease ravaging the global orange crops. Juice would become scarce, marmalade scarcer.

“Shipping will always find the necessary tonnage to get the goods to market.”

The diversions caused by the Houthis are now blamed for every sort of shortage from parts for electric cars to missing furniture, even though many of the problems can be attributed to mismanagement or bone-idleness in the “working from home” era. It is a heaven-sent excuse for every retailer of every commodity to jack up the prices, just when the public was getting used to the consequences of Russian sanctions.

However, maybe more importantly, amid all the eloquent discussions about our over-reliance on “just in time” deliveries from the other end of the world, and whether “on-shoring” or “near-shoring” would be sensible alternatives, it has emphasised once again the world’s reliance on marine transport. The general public had something of an inkling of its importance, when the Suez Canal was briefly closed by the Ever Given mishap; the present emergency has underlined it emphatically.

There has been little reason for such concern, because the truth is that the shipping industry has always managed to keep the world fed and fuelled and the current delays to individual shipments will be of a temporary nature, as the marine supply chain settles down to the new situation and longer passages. People have short memories, but there have been two other occasions when the Suez Canal was completely closed and the shipping world adjusted to cope with them both.Shipping may not be brilliant at anticipating demand, tending to a certain over-optimism that causes it a great deal of self-inflicted pain, but it will always find the necessary tonnage to get the goods to market. Rates may rise, but they will eventually fall again. That is the beauty of this industry – the archetype of the term “derived demand.”

“Remember the world’s seafarers who bring it all to your nearest port, even though their voyages might be a bit longer and rather more hazardous.”

As for the current shortages, with the goods taking the long way around between east and west, a sensible strategy in another more rational age would have been for the sea carriers to have cracked open the throttles to make up the time lost on the longer routes. That was the principle of those wonderful tea-clippers, just as speed used to really count on the competing Far East liner services, in more recent times.

Alas, the first Houthi rockets were still in the air, and the eco-fanatics were already shrieking about the amount of extra “carbon” that would be exhaled by the ships’ longer passages. The dubious emission traders of the EU were also looking to the additional duties and fines (or whatever else they may be termed) on arrival in European waters. Thus, the ships would continue to remain at whatever speed was judged kindest to the environment. There are inescapable priorities in 2024, on the path to net zero, regardless of what other harms might be inflicted by this zeal.

They tell us we have just got to learn to suffer for sustainability and put up with shortages. Learn to drink cocoa instead if you can’t get tea, except that the price of this, too, is expected to soar. But remember the world’s seafarers who bring it all to your nearest port, even though their voyages might be a bit longer and if they attempt the Red Sea passage, rather more hazardous.

Michael Grey

Maritime industry legend, and former long-term editor of Lloyds List, Michael Grey kicks off each month with topical issues affecting the maritime world at large.