The torrential rains and burst rivers that flooded much of the Australian state of Queensland at the beginning of the year wreaked havoc on the country's economy, wiping tens of billions of dollars from its GDP.
But what is less known about the natural disaster, estimated to have cost the country as much as A$30 billion (Dh117.58bn), is its effect on the global shipping industry.
Up to 30 million tonnes of iron ore worth about A$4.26bn was unable to be dug out, processed, carted and then shipped off to the world's factories in China and elsewhere after mines were flooded.
"The negative impact on exports caused by recent flooding is expected to have a significant impact on the national accounts numbers for March," said Wayne Swan, the Australian treasurer, after data showed yesterday that exports dropped by 8.7 per cent in the three months to March, representing the biggest quarterly fall in 37 years.
Weather conditions and the boom-bust nature of the shipping sector are crucial factors in global trade. More than 90 per cent of the world's goods are carried by ocean-going vessels.
When natural disasters strike countries that produce commodities, the resulting delays cause ripples across the world. Meanwhile, in windfall years the shipping industry gorges on profits, an estimated US$80bn (Dh293.84bn) in 2004.
Apart from the problems in Australia, the Japanese earthquake and tsunami disaster in March also hit the shipping industry.
The devastation was enormous.
The insurers Lloyd's of London has taken a $3.8bn hit as a result of earthquakes and floods in the first quarter of this year, and predicted the high number of major claims in the aftermath of the catastrophes would lift insurance prices this year.
Maritime experts said the impact on US trade was difficult to gauge. The main ports in Japan, the world's third-largest economy, were spared.
But car factories and electronics plants sustained major damage, and broader production disruptions persist amid ongoing power shortages.
This is likely to affect ocean and air cargo volumes for months.
In April, foreign crew members refused to sail near Japan's earthquake-crippled nuclear power station and into some ports, even outside the exclusion zone, forcing shippers to use Japanese vessels instead to transport goods.
"Crews do not want to go there. Even Chiba, crews still do not want to go," Kyuho Whang, the chief executive of South Korea's SK Shipping, said at the time, referring to the radiation leaks at the Fukushima nuclear complex on the north-east coast of Japan.
"So they rely more on the Japanese vessels than the foreign vessels."
Apart from natural disasters, the shipping industry has also had to overcome other problems. In the boom years before the global downturn, shippers reinvested profits and ordered new vessels.
Hardly surprising then that overcapacity has become an affliction as economic cycles have turned times of plenty into periods of mere survival.
"The exceptionally weak day rates in the dry bulk shipping market in the first quarter of 2011 were due to weather disruptions around the globe," says Doug Garber, an analyst with FBR Capital Markets.
Shipments of iron ore and coal declined by 50 million tonnes in the first quarter, or 11 per cent below average, due to bad weather in Australia and Brazil.
In addition there was a supply bottleneck in South Africa and export permit delays in Indonesia, Mr Garber pointed out.
As a result, the shipping industry's bellwether indicator, the Baltic Exchange's main sea freight index, has more than halved in the past six months and is close to levels last seen during the global downturn in 2008.
There are also expectations the onset of India's monsoon this month will also reduce iron ore exports as rivers rise, making it harder to transport goods.
There were worries in the shipping sector the economic recovery seen by other transportation sectors, such as airlines, has largely passed by maritime companies. But hopes brightened in the past two weeks with a recent upsurge in activity.
The Baltic Index, which is based on daily ship chartering rates, rose close to a two-month high last week to 1,467 points - up more than 10 per cent since the beginning of the rally. The growth has been largely attributed to growing demand for cargo vessels plying the Atlantic Ocean.
Nigel Prentis, a director with HSBC Shipping Services, said shippers' profits were being hard hit because they were unable to charge sufficiently high rates for vessels such as capesize cargo ships, which typically haul 150,000 tonnes of iron ore or steel each, and are so named because they are too large to fit through the Suez Canal and instead travel around the Cape of Good Hope.
"In percentage terms it is quite a big gain but it is still [average daily earnings] of under $10,000 for capesizes, which barely covers the operating costs. So it is nothing to get terribly excited about," said Mr Prentis.
Another looming worry is the effect of deliveries. Global shippers, including companies from the Middle East, participated in an historic order spree between 2006 and 2008, and many of these orders are now being delivered, adding additional excess capacity.
In 2007, the United Arab Shipping Company ordered nine ultra-large container ships, each capable of handling 13,000 20-foot containers, in a deal with Samsung Heavy Industries of South Korea worth Dh5.5bn. It is due to receive the first vessel this summer. The Abu Dhabi National Tanker Company also invested heavily prior to the downturn, and is expected to have received 15 new vessels from South Korean shipyards by the end of this year.
In its latest research note on the Middle East transport sector, Nomura Securities said it was "surprised" by the extent of vessel overcapacity for very large crude carriers, capable of handling 2 million barrels of oil.
"Shipping rates have not responded to the rise in oil production," it said. Although Nomura believes the market for these oil tankers will improve in the medium term, "we are now turning more cautious", the company concluded.
Owners of dry bulk carriers may have more to cheer about. A poll conducted by Reuters found the shipping industry expects sea freight demand to grow by up to 15 per cent in the second half compared with the first half, primarily due to the resumption of exports from Australia.
* with agencies
igale@thenational.ae
MATCH INFO
Liverpool 3
Sadio Man 28'
Andrew Robertson 34'
Diogo Jota 88'
Arsenal 1
Lacazette 25'
Man of the match
Sadio Mane (Liverpool)
UAE currency: the story behind the money in your pockets
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
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Company%20Profile
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Libya's Gold
UN Panel of Experts found regime secretly sold a fifth of the country's gold reserves.
The panel’s 2017 report followed a trail to West Africa where large sums of cash and gold were hidden by Abdullah Al Senussi, Qaddafi’s former intelligence chief, in 2011.
Cases filled with cash that was said to amount to $560m in 100 dollar notes, that was kept by a group of Libyans in Ouagadougou, Burkina Faso.
A second stash was said to have been held in Accra, Ghana, inside boxes at the local offices of an international human rights organisation based in France.
COMPANY%20PROFILE%20
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Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
How to come clean about financial infidelity
- Be honest and transparent: It is always better to own up than be found out. Tell your partner everything they want to know. Show remorse. Inform them of the extent of the situation so they know what they are dealing with.
- Work on yourself: Be honest with yourself and your partner and figure out why you did it. Don’t be ashamed to ask for professional help.
- Give it time: Like any breach of trust, it requires time to rebuild. So be consistent, communicate often and be patient with your partner and yourself.
- Discuss your financial situation regularly: Ensure your spouse is involved in financial matters and decisions. Your ability to consistently follow through with what you say you are going to do when it comes to money can make all the difference in your partner’s willingness to trust you again.
- Work on a plan to resolve the problem together: If there is a lot of debt, for example, create a budget and financial plan together and ensure your partner is fully informed, involved and supported.
Carol Glynn, founder of Conscious Finance Coaching
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COMPANY%20PROFILE
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Final scores
18 under: Tyrrell Hatton (ENG)
- 14: Jason Scrivener (AUS)
-13: Rory McIlroy (NIR)
-12: Rafa Cabrera Bello (ESP)
-11: David Lipsky (USA), Marc Warren (SCO)
-10: Tommy Fleetwood (ENG), Chris Paisley (ENG), Matt Wallace (ENG), Fabrizio Zanotti (PAR)
The specs
Engine: Dual 180kW and 300kW front and rear motors
Power: 480kW
Torque: 850Nm
Transmission: Single-speed automatic
Price: From Dh359,900 ($98,000)
On sale: Now
COMPANY PROFILE
● Company: Bidzi
● Started: 2024
● Founders: Akshay Dosaj and Asif Rashid
● Based: Dubai, UAE
● Industry: M&A
● Funding size: Bootstrapped
● No of employees: Nine
Joker: Folie a Deux
Starring: Joaquin Phoenix, Lady Gaga, Brendan Gleeson
Director: Todd Phillips
Rating: 2/5
Moon Music
Artist: Coldplay
Label: Parlophone/Atlantic
Number of tracks: 10
Rating: 3/5
LIVING IN...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Ziina users can donate to relief efforts in Beirut
Ziina users will be able to use the app to help relief efforts in Beirut, which has been left reeling after an August blast caused an estimated $15 billion in damage and left thousands homeless. Ziina has partnered with the United Nations High Commissioner for Refugees to raise money for the Lebanese capital, co-founder Faisal Toukan says. “As of October 1, the UNHCR has the first certified badge on Ziina and is automatically part of user's top friends' list during this campaign. Users can now donate any amount to the Beirut relief with two clicks. The money raised will go towards rebuilding houses for the families that were impacted by the explosion.”
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
Tree of Hell
Starring: Raed Zeno, Hadi Awada, Dr Mohammad Abdalla
Director: Raed Zeno
Rating: 4/5
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
Jigra
Starring: Alia Bhatt, Vedang Raina, Manoj Pahwa, Harsh Singh
Company%20Profile
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Stats at a glance:
Cost: 1.05 billion pounds (Dh 4.8 billion)
Number in service: 6
Complement 191 (space for up to 285)
Top speed: over 32 knots
Range: Over 7,000 nautical miles
Length 152.4 m
Displacement: 8,700 tonnes
Beam: 21.2 m
Draught: 7.4 m
Company%20profile
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The biog
First Job: Abu Dhabi Department of Petroleum in 1974
Current role: Chairperson of Al Maskari Holding since 2008
Career high: Regularly cited on Forbes list of 100 most powerful Arab Businesswomen
Achievement: Helped establish Al Maskari Medical Centre in 1969 in Abu Dhabi’s Western Region
Future plan: Will now concentrate on her charitable work
Key fixtures from January 5-7
Watford v Bristol City
Liverpool v Everton
Brighton v Crystal Palace
Bournemouth v AFC Fylde or Wigan
Coventry v Stoke City
Nottingham Forest v Arsenal
Manchester United v Derby
Forest Green or Exeter v West Brom
Tottenham v AFC Wimbledon
Fleetwood or Hereford v Leicester City
Manchester City v Burnley
Shrewsbury v West Ham United
Wolves v Swansea City
Newcastle United v Luton Town
Fulham v Southampton
Norwich City v Chelsea
A%20QUIET%20PLACE
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ETFs explained
Exhchange traded funds are bought and sold like shares, but operate as index-tracking funds, passively following their chosen indices, such as the S&P 500, FTSE 100 and the FTSE All World, plus a vast range of smaller exchanges and commodities, such as gold, silver, copper sugar, coffee and oil.
ETFs have zero upfront fees and annual charges as low as 0.07 per cent a year, which means you get to keep more of your returns, as actively managed funds can charge as much as 1.5 per cent a year.
There are thousands to choose from, with the five biggest providers BlackRock’s iShares range, Vanguard, State Street Global Advisors SPDR ETFs, Deutsche Bank AWM X-trackers and Invesco PowerShares.
Zidane's managerial achievements
La Liga: 2016/17
Spanish Super Cup: 2017
Uefa Champions League: 2015/16, 2016/17, 2017/18
Uefa Super Cup: 2016, 2017
Fifa Club World Cup: 2016, 2017
Fixtures
50-over match
UAE v Lancashire, starts at 10am
Champion County match
MCC v Surrey, four-day match, starting on Sunday, March 24, play starts at 10am
Both matches are at ICC Academy, Dubai Sports City. Admission is free.
Afro%20salons
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AUSTRALIA SQUAD
Steve Smith (capt), David Warner, Cameron Bancroft, Jackson Bird, Pat Cummins, Peter Handscomb, Josh Hazlewood, Usman Khawaja, Nathan Lyon, Shaun Marsh, Tim Paine, Chadd Sayers, Mitchell Starc.
Thank You for Banking with Us
Director: Laila Abbas
Starring: Yasmine Al Massri, Clara Khoury, Kamel El Basha, Ashraf Barhoum
Rating: 4/5
KILLING OF QASSEM SULEIMANI
UAE currency: the story behind the money in your pockets