THE global economy is at a crossroads. We are entering an era of superpower rivalry between the US and China that will fundamentally upend established trading assumptions and fragment shipping down geopolitical lines.

Or at least that seems to be the headline pitch from the parade of doom-mongering analysts and experts opining on risks down the line at this year’s Nor-Shipping gathering in Oslo.

The near-universal response to this existential crisis from the shipping crowd gathered in the drizzle seems to be a barely concealed fist-bump of joy as they mentally run through the profitable opportunities ahead.

How much this glib assumption that shipping benefits from disruption is based on considered analysis, rather than pathological optimism, is not entirely clear. But shipping executives seem pretty cool in the face of a disintegrating world order — and they are still wearing shades, despite the rain and grey skies.

Shipping is responsive; it is adaptive and it is flexible, and that has been heard loud and clear this week.

The global economy is not going to stop simply because existing trade routes are in danger of being disrupted. New trade routes will inevitably emerge, countless industry leaders have said.

Intra-Asia trade, particularly between China and Southeast Asian countries, was accelerating long before much of this disruption was erroneously relabelled under the banner of the Trump effect.

Don’t forget, the US challenge to China’s dominance, maritime or otherwise, is a bipartisan issue and this new world order will outlive any immediate Trumpian spin that is being put on it.

So, is shipping being naive in casting this as a play for profit? Well, it has little hope of affecting the outcome either way, so the inherent long view of shipping’s investment cycle requires a rosy view to operate. Psychologically and economically, it pays to look on the bright side of life, until it doesn’t.

This is not about good or bad, or choosing sides. This is about timing.

Knee-jerk responses don’t work; just ask the OECD. Its modelling this week concluded that the world’s advanced economies risk a significant GDP loss if they move too quickly to localise supply chains as a result of the deteriorating geopolitical environment.

Leave it too late, however, and inevitably things look equally bleak for those passively waiting for the inevitable.

Take a leaf out of the book of European bankers, who are gleefully snapping up clients fleeing from the Chinese leasing houses that have been aggressively and enthusiastically eating their lunch for years.

Timing is everything, revenge is sweet. Shipping has seen it all before and will see it again.

Put on your sunglasses and head to the next drinks reception.

Richard Meade
Editor-in-chief, Lloyd’s List 

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