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Shipping Industry Faces Smooth Sailing

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THE shipping industry should be sailing into smoother waters during the 1990s. Industry experts note that both carrier companies and some shipbuilders were buffeted by a broad array of problems during the past two decades. There was the disruptive Arab oil embargo of the early 1970s. Also, the recessions of the '70s and '80s, which made it difficult for shipping companies to obtain needed bank financing, especially after industry losses on old loans.

Not surprisingly, new vessel orders disappeared in the early 1980s, some shipbuilding firms went bankrupt, and the shipbuilding industry sharply contracted.

Now there are grounds for optimism about the worldwide ocean shipping industry during the 1990s, notes Kathleen M. Elliott, a shipping analyst with David L. Babson & Company, Inc., in Cambridge, Mass., an investment counseling firm. Ocean shipping firms, including bulk carriers and oil haulers, are ``in the early stages of what could be a long favorable cycle,'' she says.

Among her reasons for optimism are the political and economic liberalization in Eastern Europe, European economic unification in 1992, continuing United States dependency on imported Middle East oil, and the growing demand for US farm exports abroad.

In the past few years the global shipping industry has begun to rebound, says Elliott. The ``increasing globalization of the world's economies'' will create ``many new opportunities'' for shipping companies, as well as some firms making and repairing vessels.

``We're now taking an optimistic, long-range view about the industry,'' says Elliott.

The biggest gains for shipping during the 1990s will presumably accrue to overseas, as opposed to domestic US, firms, says James Winchester, a shipping expert with Mabon, Nugent & Company, an investment house here. Still, he says, ``that will mean a better picture for some US shipbuilding companies,'' including such firms as American Shipbuilding, Tacoma Yards, and Avondale.

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