Panama's empty vessels are a sign of the times

I am looking down on the Pacific waters at the mouth of the Panama canal. Below, evening sun splashes silver across the sea, silhouetting the shipping waiting to enter. I count 50 vessels: container ships, bulk carriers, cruise liners, each momentarily detailed as our plane descends to land at the airfield nearby.

I haven’t been to Panama since 1983, and the then sprinkling of tower blocks at the water’s edge has become a forest. Who on earth is inside them? Bankers? Dealers? British surburban death fakers?

My plane connection gives me four hours on the ground to spend with my new best friend, Paolo, Italian ship broker extraordinaire – I shall not embarrass him with his real name. Tall, two-day-old very dark growth, he speaks brilliant English with an entirely Italian grammatical construction, very fast.

I had met him five days earlier on the flight out, on his way to deal with a tanker. I tell him that my expert journalistic eye has spotted a lie in the current portrayal of world trade. Why, I exclaim, ships are groaning with cargo are queuing to get through the Panama canal. “Groaning?” he cries. “Groaning? The only groaning out there is the groaning of ship owners moving empty vessels to the scrapyard.” He adds, with his own rather more expert eye: “For every six ships you saw down there laden, 30 are empty.”

Then he tells me the most shocking statistic of all. Paolo is the CEO of a significant ship brokerage company with offices all over the world. He tells me profits in the global shipbroking business have collapsed from a July peak by a staggering 95 per cent. Nothing is moving. “Raw materials?” he says. “Nobody wants anything. Nobody’s making anything. It has seized up.”

He doesn’t own ships, he charters them. And once you reach zero profits, you don’t charter. And if you own them, you mothball or you scrap – and that’s what’s happening. “Once there’s no profit,” he said, “we take no risk.”

All this has been evident in Lloyd’s Register. You and I probably don’t read it, but this is the physical manifestation of the mental stuff we know about the recession, the banks and credit.

One other economic indicator. My hosts in Cartagena arranged for the very rare privilege of business class all the way. On the plane out, in business, Air France was more than half empty. Economy was fairly full. Business class Iberia would have been empty on the way home had not five of us diverted from Air France: 40 empty business seats.

Airlines make their profit in business. There was no profit in any of the six flights I’ve been on board in the past five days.