The Shipping Industry Downturn of the 1970s

The Shipping Industry Downturn of the 1970s is presented as a cascading crisis rather than a single reversal: shipowners order new vessels in response to booming demand, only to see markets weaken before the tonnage arrives, while freight-rate competition and mistaken forecasts deepen the losses. Its consequences reach the von Dohren shipping business directly, and the downturn forms the economic pressure behind WH 2’s attempt to secure a public rehabilitation of WH 1.

The Boom Turns into a Liability

In 1971, at the height of the tanker boom, WH 2 ordered a ship for the von Dohren shipping business. By the time it was delivered, the market had changed drastically. The price of a barrel of crude oil had risen overnight from three to forty dollars during the oil crisis, and the vessel that was supposed to be an asset was instead lying idle in a remote bay. It earned no money and cost thousands of dollars each day to maintain. The ship’s fate makes the downturn concrete: the danger lay not simply in a weak market, but in the gap between the conditions under which owners committed to new tonnage and those prevailing when it arrived.

The crisis is also discussed within WH 2’s family circle. Margot raises the troubled ship as a concern, while Karl nods and reassures her that a solution will be found. WH 2 would rather not hear about it; he takes Margot’s willingness to mention the problem as a sign that it is not yet catastrophic. That domestic exchange places the financial threat inside ordinary conversation, even as the stalled ship represents a potentially ruinous burden for the company.

How the Industry Misread Demand

At a gathering of the Vereinigung Hamburger Schiffsmakler und Schiffsagenten at the restaurant on Süllberg, Gerhard Leyendieker describes a crisis with several interacting causes. He says that currency appreciation was imposing a severe cost: each percentage point of appreciation cost the industry twenty-five million D-Mark. He attributes the exchange-rate issue to political decisions, but also warns that shipowners had to examine their own errors. Among them, he identifies their failure to anticipate the surge in imports and the damaging effect of chaotic freight-rate dumping on the North Atlantic, especially for medium-sized and small shipping companies.

Leyendieker traces some of the earlier expansion to the profitable years associated with the Korean War Era and the Vietnam War. When those conditions ended, many owners recognized the change too late. Instead of scrapping older vessels with their profits, they made the opposite choice. Selling used freighters to developing countries also proved damaging: the new owners could offer freight at rates so low that they took cargo away from the original shipowners. The downturn therefore appears not only as a fall in demand but as a crisis intensified by decisions that added capacity and encouraged competition on price.

Japan had been central to the earlier boom. Its expanding steel industry absorbed nearly half of all charter tonnage, while American vessels were largely occupied by the Vietnam War. Japanese demand was so strong that tramp shipowners chartered whatever ships were available and ordered additional vessels on an unprecedented scale. But Japanese steel managers had already sharply reduced their expectations by the time much of this new capacity reached the market. The delayed arrival of ships ordered against optimistic forecasts repeats the mismatch seen in WH 2’s own 1971 order: investment made during a boom becomes a liability when demand has shifted before delivery.

Demand Weakens on Several Fronts

The contraction is not attributed to ship supply alone. Leyendieker also points to agricultural production in developing countries, where yields had become two to three times higher than before the beginning of the 1970s. Those larger harvests reduced the need for supplementary deliveries, weakening another source of demand for shipping. At the end of his discussion, he turns that development into a bleak joke about the need for another crop failure. The remark compresses the industry’s predicament into a cruel dependence: prosperity for agricultural producers could mean fewer shipments for shipping companies already struggling with excess tonnage and falling rates.

Leyendieker singles out Japan as a culprit in the current crisis, but his account is marked by deep-seated prejudice. He uses a generalized term for Asians and privately employs a slur for Japanese people; the narrative makes clear that his blame is not a neutral assessment of market forces. The speech nonetheless sets out specific economic developments behind the downturn—earlier Japanese demand, later reduced expectations, and vessels arriving after the market had weakened—while showing how Leyendieker folds those developments into a recurring habit of warning about crisis and scapegoating Japan.

Corporate and Family Consequences

The downturn threatens more than one vessel. WH 2 faces the prospect of bankruptcy, and the failing business gives his actions toward WH 1 a different urgency. For nearly a year, he has patiently approached influential maritime and civic figures to win support for an official, unanimous rehabilitation of his father. He has recruited leaders from the German shipowners’ association and the Vereinigung Hamburger Schiffsmakler und Schiffsagenten; Leyendieker is the last person he needs to persuade. The decision is expected at the gathering where Leyendieker speaks about the industry’s losses.

The economic crisis and the family reckoning remain distinct, but the novel places them in the same moment of uncertainty. WH 2, with the company’s collapse in view, wants to accomplish something good for his father near the end of the older man’s life. He has come to feel solidarity, even pity, for WH 1, whose old mistakes continue to be held against him. Leyendieker is a particularly difficult obstacle because he and WH 1 were once friends, then competitors, and finally estranged; WH 1 still hates him. Against the backdrop of an industry where earlier judgments about ships and demand have become costly, WH 2 seeks a different kind of correction: a formal reversal of the judgment that has kept his father outside Hamburg society for twenty years. The downturn thus supplies both material pressure and a setting for the attempted reconciliation, without guaranteeing either the company’s recovery or the father’s absolution.