2.2 Characteristics of shipping market cycles
Shipping analyst’s view of short cycles
Cycles are not unique to shipping. They occur in many industries and in the economy
as a whole. Economic historians have devoted much effort to analysing and
classifying cycles into categories, usually focusing on their length. Many different
types of cycle have been identified. The Kitchenis a short cycle of 3–4 years; the
Juglarlasts 6–8 years; the Labroussecan last 10 or 12 years; the Kuznetslasts 20
years, while a Kondratieffspreads over a half century or more.
In shipping the
existence of cycles has long been accepted as part of the shipping business. In
January 1901 a broker noted in his annual report that ‘the comparison of the last
four cycles (10 year periods) brings out a marked similarity in the salient features
of each component year, and the course of prices’. He went on to observe that the
cycles seemed to be getting longer ‘a further retrospect shows that in the successive
decades the periods of inflation gradually shrink, while the periods of depression
correspondingly stretch out’