Abstract
The paper provided a help to shipowners—we believe—by determining the duration of cycles, first historically, since 1741, and par excellence since 1945, to 2020, and then mathematically, using Chaos Theory. It was remarkable to find out that both approaches gave the same outcome: shipping cycles lasted 6 years (rounded). We have also explored the possibility to predict a shipping cycle with reference to previous repeated attempts to forecast freight markets, but in this paper, we wanted to see what to suggest to shipowners, when forecasting is impossible—as is! This is in line with most important Greek shipowners, like Mr. G Procopiou, who suggests to ignore forecasters. The paper, however, showed the important corollary that bad times are longer than good times, helping to avoid fatal mistakes as those committed by Sanko shipping of Japan in 1980s. We showed also the more important corollary for businessmen that technology brought shipping cycles closer! We have re-introduced the concept of Joker, rejecting the theory that shipping is a “poker game”. To predict the coming of a Joker has not been so far achieved, though we have predicted the start of the 2008 depression using Chaos theory… Ten at least Jokers have appeared since 1951, including the 2019 Pandemic.
Highlights
Shipping is an industry which suffers from frequent cycles approaching faster as time goes by
We have explored the possibility to predict a shipping cycle with reference to previous repeated attempts to forecast freight markets, but in this paper, we wanted to see what to suggest to shipowners, when forecasting is impossible—as is! This is in line with most important Greek shipowners, like Mr G Procopiou, who suggests to ignore forecasters
The paper, showed the important corollary that bad times are longer than good times, helping to avoid fatal mistakes as those committed by Sanko shipping of Japan in 1980s
Summary
Shipping is an industry which suffers from frequent cycles approaching faster as time goes by. 8 2nd World war 1939-1944; Average cycle = 8 years 7 Korean war: early 1950 4 Vietnam war: 07/05/1954; 1st Suez Canal closure: end-October 1956. The duration of shipping cycles fell over 3 technological periods: from ~20 years to ~7 on average (Table 1). This suggests that technology—the factor which has changed, and no doubt, affected cycles, made the duration of recessions and depressions shorter...! A shipping cycle may be even shorter, as technology continuously improves. Have we to blame shipowners for over-ordering ships and demanding to get delivery of them as soon as possible to get advantage of the rising market?. A great waste of valuable resources, no doubt! This demonstrates sadly the failure of shipowners/and maritime economists to predict cycles!
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