Oil crisis ends shipping boom
The issue of fuel costs has been a recurring theme running through decades of reporting at ITJ. The discussion in the seventies revolved mainly around financial aspects of the issue, but today, in addition to the question of cost, the high-profile issue of protecting the environment, and the suitability of fuels used in the industry, also play a significant role.
follow link In 1973, the Organization of Petroleum Exporting Countries (Opec) decided that crude oil production should be cut by 5%. The price of oil then rapidly shot up by 70%, from USD 3 a barrel to more than USD 5 a barrel in October 1973. In 1974 the global oil price exceeded the USD 12 mark.
follow site Aircraft, trucks and ships were all equally and strongly affected, of course, as were private cars. The logistics world, and shipping lines in industrialised countries in particular, found themselves squarely on the receiving end of these problems.
source site Political and economic considerations led to the implementation of a range of survival measures, aimed at breaking the industry’s huge dependence on fossil fuels and at finding alternatives. In retrospect, it is clear that the steps which were planned and carried out at that time are not much different from those we are reporting on in the current issues of ITJ.
The ITJ’s shipping editor at the time, Heinz Stürner – who had regularly reported shipping industry news for years in his weekly column Cargo, Ship, and Harbour – addressed the topic of the oil crisis on a number of occasions. In 1975 he wrote that «the effects of economic trends are being increasingly felt in the Europe / Far East, and Japan / USA relations in particular, whilst ocean trading with the Middle East, or in other words, with the oil-producing states around the Persian Gulf and Red Sea, is in such a state of flux that the established liner companies – although still optimistic – are having a hard time in keeping up with the changing situation. [...] «At all events, the second half of 1974 brought an end to the cuts which the oil-supply crisis had imposed upon the frequency of sailings and the sailing speeds, and which consequently had been restricting the development of maritime trade. [...] The restrictions which world shipping had to contend with in 1974 gave a vital impulse to the trend towards cooperation and mergers. [...] «Operating on an individual basis, a single shipping company alone is not in the position either to bear the costs of the most modern cargo liners or to operate efficient services exclusively with ships from its own fleet.»
Today, in the wake of the current global economic crisis and in the face of continuous efforts to reduce fuel consumption for both cost and environmental reasons, we also regularly report on streamlining, slow steaming and unusual alliances and cooperation agreements. Let’s hope that with these initiatives, shipping is on its way to a better world.