Economic Threats to Marine Markets

The news that hundreds of cargo ships are sitting unemployed off the coast of Singapore due to the sharp decline in world trade makes for an illuminating read in this May 12 New York Times article by Keith Bradsher. Among the takeaways from the piece are rising concerns about near misses and collisions in the Malacca Straits – one of the world’s most congested waterways – that separate Malaysia and Singapore from Indonesia. Coincidentally the top causes of decline in international trade and marine exposure trends are discussed in a new presentation by Dr. Robert Hartwig, I.I.I. president, titled “The Global Financial Crisis, International Trade & Piracy: Impacts on Marine Insurance Markets†. A section on economic threats to marine insurance markets notes that as much as 11.3 percent of global shipping fleet is idle and that as much as 45 percent of new containership capacity scheduled for delivery in 2010 will be delayed or cancelled. Dr. Hartwig points to concerns that rising protectionism could increase tariffs and quotas, further hurting trade and ultimately deepening the global recession. The growing number of piracy attacks against ships is also discussed.  

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