GLG News by Raymond Kalley

Implications: THE dry bulk market has been given a glimpse of the potential for real problems in the future.With a a slowing global economy and lack of credit,what is going to keep these markets up?

Analysis:  With economic activity slowing,stagflation emerging in various countries,credit having basically dried up,is it not possible that the long term effects on the bulk trades will be negatively effected?New tonnage coming onto the market in the next two years will exarcerbate the problem.This is a reason for extreme caution.

Implications: With order books for new vessels bulging and no delivery prospects past 2010/11,does this mean that the bulk markets will continue to expand? Already we are seing a slowing down of growth in world trade.If this continues,what is going to happen when these ships hit the market. The Baltic Index is a very good indicator I believe of where these markets re going.

Analysis:  So it seems rather worrying that the index has fallen by a third since its peak in November. Admittedly, that may tell us more about global shipping capacity than about trading volumes. The last five years has already seen two big swings in the index. In the first phase, between the end of 2002 and the start of 2005, the index jumped from below 2,000 to 6,000, as both trade and commodity prices surged. But shipowners eventually responded to this increase and shipping rates fell sharply. This told us nothing about trading activity. The Baltic Dry picked up again in 2006, helped by the surge in food prices; it hit its peak of 11,000 in November. While shipping availability may be responsible for its subsequent drop, Capital Economics reckons “it seems unlikely that a large amount of shipping capacity has suddenly (and unexpectedly) come into the market.”

Implications: Two high-speed ferries collided in thick fog between Hong Kong and Macau yesterday, injuring about 140 people, the operator of the vessels said. The Funchal, traveling from Hong Kong to Macau with 229 passengers on board, collided with the Santa Maria, heading in the opposite direction with 206 passengers.Low visibility may have caused the collision. Fog was blamed for three collisions in Hong Kong waters yesterday, the South China Morning Post said. Another Macau- bound jetfoil with 386 passengers and crew collided with a Hong Kong fishing boat off Lantau Island at 10:10 a.m. local time, the newspaper reported.

Analysis: The facts are not clear-however,it seems that there was a great deal of fog around.The impact of two jetfoils hitting each other is immense even at a slow speed,which these vessels do not travel at.I have stressed frequently the need to never ever take any risks when passengers or crew are involved.

Implications: Professional, effective and accountable security services are important for establishing lasting peace and development worldwide, says Foreign Affairs Minster Nkosazana Dlamini-Zuma. Security services have an important place in society, in particular the military, the police, the intelligence services and the judiciary, Dr Dlamini Zuma said, addressing the International Workshop on Security Sector Reform (SSR).

Analysis:  One can have seminars and discussions,however,without practical solutions which every one can implement immediately,our general level of risk will continue to increase and not decrease.
The level of crime and violence in SA is at an all time high and getting worse-but so is it the case in other parts of the world as well.
There are solutions.But are they always politically acceptable?

Implications: PENANG: Penang Port Sdn Bhd (PPSB) has asked the government to provide fuel subsidy, buy catamarans and take over the maintenance of its loss-making ferry services. Its managing director Datuk Ahmad Ibni Hajar said if he could have his way, he want to give up the ferry services “tomorrow” and only concentrate on port operations

Analysis:  Competitive market positions of many operators will be compromised -how are they going to survive?However, time will tell but no doubt only the most efficient and effectively managed operations will survive.There is a long term limit as to what government support these companies can expect to get.

Implications: An international rescue operation sparked by a satellite phone call to England from an inflatable vessel off the north African coast saved 59 people yesterday after they had been set adrift by people smugglers without food, water or power.This is a truly awful episode of human trafficking.

Analysis: The group, who had set off for Europe from north Africa at the start of the week, had been ordered out of a store room on a commercial vessel and put into the inflatable craft. They had been informed they were in Italian waters when in fact they were floating helpless 64 nautical miles off the Libyan coast. They were also robbed of their possessions
How is this possible in the year 2007?
The global maritime community needs to be aware of all these kinds of incidents and adopt an active cor-ordinated effort with local authorities to avoid such situations from manifesting themselves.

Implications: local ferry operators in remote areas do not believe they are at risk terrorism is a global phenomenon and not restricted to major centers all ferry operators need to have measures in place as their ultimate responsibility is to their passengers

Analysis:  Most local ferry operators believe that in their markets,nothing will ever happen;they are excluded from the global reality of international terror.Nothing could be further from the truth.It is precisely in areas which are not properly protected that are perfect targets for:
-acts of terror
-illegal immigration
-drugs
-other
Many small operators look only at the bottom line,not realizing that the cost of deterrent/protection is a small price to pay for a incident which could effect their business in a major way.
Urgent attention needs to be placed on proper effective profiling and deterent methods for every operator responsible for transporting passengers.

Implications: Service safety security experience

Analysis: St.Maarten is a great destination catering to guests from the East Coast USA,France,Holland and neigbouring islands.Being the main gateway to the islands of St.Barths,Anguilla,St.Kitts/Nevis and Saba,the new international airport strives to offer a service comparable to the best in the world.However,unless certain critical issues such as safety,security and a real level of genuine service is delivered whilst offering value for money,over time,clients will choose to go to other destinations that can offer the above.

Implications: Road traffic congestion is internationally is getting progressively worse valuable productive time is being lost,effecting commuters and tourists alike. Goods are not getting to market on time  

Analysis: Road traffic congestion is internationally is getting progressively worse,from coastal areas along coasts(Nice to St.Tropez in France),to Caribbean islands.The result is that valuable productive time is being lost,costing unknown $billions.In India for example,80% of all traffic  use 3% of current roads.Goods are not getting to market on time and in many case perish.
What is the solution?Increase use of water borne transportation.Depending on demographics,an all inclusive system as the one suggested for Florida makes sense.We should see more initiatives of this nature.