Friday, May 31, 2019

"Sea Changes – The Longer View of Shipping"

From Winton:
The tracking of shipping routes is an oft-cited achievement of modern data science. But comparable data has been collected for centuries—as our video shows.

While modern transponder data can indeed provide a near real-time picture of supply and demand, it has long been possible to monitor changes in the maritime economy through a number of sources.

The shipping journal Lloyd's List has long offered a comprehensive overview of commercial maritime traffic between ports, with data stretching back as far as 1692.

Another source of information is historical ship logs - records that reveal further details about the exact routes that vessels traversed, as well as prevailing winds and other weather patterns.
In order to complement these and many other datasets, Winton researchers have harvested Panama and Suez Canal reports to round out a full representation of international maritime commerce from the 19th century and beyond.
Yet although this results in a much richer account, it remains far from easy to read the seas.
Crests and troughsSuch are the vagaries of shipping that even the best entrepreneurs can make profound errors of judgment. Consider Malcolm McLean, the inventor of container shipping, a technology that reshaped the maritime economy and with it the world.
Growth Of World Trade
Real value of world exports (1900=100). Source: Our World in Data.
Despite McLean’s far-reaching innovation, he would go on to fail spectacularly – not once, but twice - in his attempts to profit from industry shifts.

McLean’s first misadventure came in the wake of the 1967 closure of the Suez Canal. The disruption forced ships to instead travel around Africa, putting a premium on speed.

But by the time the canal reopened, oil prices had risen, making the new rapid vessels uneconomic. McLean’s line, Sea-Land, had overinvested, delivering its parent company a $150 million loss.
In response to these higher oil prices, carriers switched to slower, less fuel-intensive ships. Expecting the oil price to surge to $50 per barrel, McLean bought into this new trend, purchasing United States Lines in 1977. For that company, he developed a line of vast, plodding container ships that could circumnavigate the globe.

Once again, however, the oil market turned on McLean. The price of crude slumped, wiping out his $500 million investment in the new line of ships. Not long after, in 1986, McLean’s company was driven into insolvency, resulting in one of the largest bankruptcies in American history at the time. 
Engineering the seas...