The Mysterious Titans Of Shipping Reveal The Truth About The Global Economy

john fredriksenJohn Fredriksen, CEO of Frontline Ltd.

Photo: Dynasties Of The Sea

Approximately 95 per cent of world trade occurs by sea.  However, little is known about the world’s shippers because only a fraction are traded publicly.In her new book Dynasties Of The Sea, CNBC’s Lori Ann LaRocco profiles 21 of the biggest players of the notoriously secretive shipping industry.

LaRocco also got the priceless insight of these players who are intimately familiar with what’s going on in the world economy.

“One of the biggest themes that came out of this book is how these shipping titans are worried about the health of the global economy and the bloated balance sheets of the United States and Europe,” LaRocco says.

From the book, we pulled some key quotes from the biggest players of the shipping industry.

The world has a leadership deficit.

'There's not so much wrong with the global economy. What is wrong is that there are no leaders. No one seems to be able to take charge. In America, today they are just bickering about peanuts instead of getting together and discussing other changes that they can make, and find a common ground. But right now, they're not doing anything, and now things are getting worse and worse. In Europe, it is even worse because we are 27 countries and we can't agree on anything. Until someone is a leader. Until we have a Churchill or Eisenhower. We need people to take charge. If not, the impact of this lack of leadership will continue.'

-- Jacob Stolt-Nielsen, Founder of Stolt-Nielsen

Source: Dynasties Of The Sea

Europe's promise of greater employment is a lie.

'The biggest issue in Europe is, they were giving false promises to the youth. Anyone who knows anything about reality knew the promise of employment for life in the public sector would never to be fulfilled. Europe will have to change its attitude. This is a European problem, in essence. So we need an understanding that this lack of employment, with safety of government, does not exist. It's a lie.

America's debt is a major concern.

'The only sovereign debt that worries me is America's. My biggest concern there is at some point our creditors will call to question on us. If they do, it will re-orient the cost of capital...I do worry that someday I'm going to wake up and see America not paying zero per cent for borrowing, but 6, 7 or even 8%.... In the future, the U.S. may still be paying at zero or if I woke up in 2014 and Uncle Sam was paying 8% for treasury bills, it wouldn't knock me over. In planning my business, I've got to be prepared for, in my view, both eventualities.'

-- Charles Fabrikant, Chairman of SEACOR Holdings

Source: Dynasties Of The Sea

China wants home prices to fall because it would bring greater social equality.

'People misunderstand the situation there (in China). In the U.S. they want housing prices to go up. Whereas, in China, they want house prices to go down. Because they're talking about the social equality. They're talking about the developers making too much money. They want their house prices to go down. So when you see the Chinese house prices dropping, it is a positive sign! It's what they want! Short sellers like Jim Chanos don't understand that. They have a different agenda. They misunderstand China's strategy.'

-- Gerry Wang, CEO of Seaspan Corporation

Source: Dynasties Of The Sea

The shipping industry is extremely sensitive to small moves in trade.

'My grandmother had a simple saying about the cycles, '98 ships and 101 cargos equals boom. 101 ships and 98 cargos equals bust.'

In the U.S., high taxes are unattractive. But energy is a huge opportunity.

'Why would I come in to the U.S. where you will have high tariffs and environmental problems with the authorities because people want to create problems? 30 years ago when I came to the U.S. it was a dream for everybody. That's not the case anymore. Many Americans are looking for an easy way to make money. They are not willing to work the hard labour. America needs to build itself by enlightening the people who have the money. Instead, people are investing in China, or somewhere else. But the U.S., I think, has an opportunity today because of their energy resources. If I were them, I would give incentives to companies to set up shop, invest money and create jobs here in America.'

-- Robert Yildirim, President of YILDIRIM Holding AS

Source: Dynasties Of The Sea

Private equity and hedge funds don't have a clue.

'If I had listened to private equity and the hedge funds that ran our stock, we would have invested all of our money in crude tankers but we didn't. Fast forward to 2012- we're still around and one of the reasons we're still around is because of our U.S. Flag business which is outperforming and making money while our crude business is losing money. So going against the grain, was the right thing.'

-- Morten Arntzen, CEO of the transportation services giant, OSG

Source: Dynasties Of The Sea

Shipping continues to be the biggest, most economical element of global trade.

'Shipping is becoming part of a long logistics chain. With 95% of the world's trade moving by sea, if you compare the cost per ton-mile, it's still the most economical mode of transportation and environmentally has the best footprint compared to other modes of transportation.'

-- Rajaish Bajpaee, CEO of Bernhard Schulte Shipmanagement (BSM)

Source: Dynasties Of The Sea

It could be a decade before we return to normalcy.

'This man-made crisis is just so massive. I think it's going to take 5-10 years before the market comes back again.'

-- Tor Olav Trøim, Vice President and Director of Seadrill Ltd.

Source: Dynasties Of The Sea

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