URSABLOG: Peak Wavelength

It’s hard to imagine the sea’s destructive potential on a calm day: it is peaceful, benign, infinite. But watching relentless oceanic swell – or experiencing it on board a ship – reveals its implacable power. The waves move: they move the water, they move the ship, they move you. But as they move, the water itself barely shifts, simply rising and falling in a slow circle to return to where it started. Currents and tides can move masses of water from one place to another; waves are simply cycles of energy passing through water to unleash their power on whatever rides on them, or tries to contain them, until eventually they dissipate and fade into the wider sea.

The other week, Dionysios – our head of research at URSA – and I were invited to London to give a presentation to a masterclass at the International Union of Marine Insurance, not a usual hunting ground for either of us. We had been asked to describe and explain our perspective on the nature of shipping markets, and market cycles, and how ship values themselves are reached.

It was great fun and the participants were a nice, curious bunch, but I had a nagging feeling that there was an invisible wall of comprehension between us and them. Their world, the underwriting world, is defined by measuring and quantifying risk, whereas we, as shipbrokers, live inside the markets in all their messiness. They want certainty, we – in the freight and sale and purchase markets – know that there is no such thing as certainty, and it is futile to expect to find it.

Dionysios explained with his usual eloquence the exogenous and endogenous influences on prices in the tramp markets, short, medium and long term. They were more comfortable with his gentle, measured and theoretical approach than my more urgent and excitable exhortations of what competitive shipbrokers actually do, and how they do it. Maybe I alienated them a bit: I still get animated when I describe what I do.

Some of our new friends seemed genuinely puzzled that such extremely important things as ship values – and therefore insurable values – are reached by negotiation, and by the fierce competition that these can generate. They seemed to think there was a platform that priced values for brokers, buyers and sellers to refer to in a calm and orderly way, and then use. Would that it were so, and there was only one buyer for any given ship, and contracts could be drawn up at a leisurely and measured pace. But this has never been the case: even in the days before the internet and emails (let alone ubiquitous mobile phones) – the days when I started my shipbroking career – the competition was always breathing down our necks.

Ship value platforms do exist of course, but they function as an amalgamation of what has been done, not as a means of doing deals themselves. Understandably perhaps the insurance professionals wanted a bit more of an insight than ‘we make it up as we go along’, but this, in essence, is what markets do, and shipbrokers are there to make sure it happens, by hook or by crook. The deals done set markers of where the market is today, even as the cycles relentlessly roll through.

I came to the conclusion that insurers and their brokers want a life defined by straight lines, and things put in the right boxes. Shipbrokers – and their clients – on the other hand live and act within the uncertainty of conflicting and overlapping cycles, and are tossed and turned accordingly.

The fallacy of history is that there is one single thread of cause and effect woven through the linear timeline of “one fucking thing after another”, but life, I believe, does not move in straight lines, even if we would like to think it should, even if that’s how we instinctively make sense of our own.

The unsuitability of so many life hacks and self-help books (the proof of their ineffectiveness is in their proliferation), and even cognitive behavioural therapy, is that somehow, somewhere, there is a click, a trigger, a silver bullet or golden key that if we can only find it, and deploy it, will alter our trajectory towards sunlit uplands, and out of the muddy trenches we are bogged down in. But like the water particle that more or less stays in the same place as the wave passes through, we stay stuck where we are. These vicious cycles – those of addiction, depression, dependency, toxicity – can be desperate, so no wonder the lure of something, anything straight, swift, pure and clean that can get us out of this mess is so tempting. Well, all I can say is that it may work in the short-term, for a while, but it is not a long-term or lasting solution. How to get out of a vicious cycle? Accept it for what and why it is, and then work to change it into something more benign.

A straight line is great when we can see where we are going – and it’s where we want to go – but otherwise even a slight nudge off course, a small miscalculation can send us off towards disaster. And when we are all at sea, our view is trapped inside a circle of which we are the centre, and whatever course – straight or otherwise – we set, our circular horizon will continue to move with us.

Circles, cycles and waves make more sense of my world than straight lines and boxes. Squaring the circle suggests an impossible and frustrating task, probably because the circle is always moving – “the beginning and the end are shared in the circumference of a circle” – and won’t be put in a box. On the other hand, circling the square has a completely different meaning, a freer one, and even though it sounds like it’s taking its time getting to the point, at least there is thought and movement involved.

“Everything flows and nothing abides; everything gives way and nothing stays fixed.” The sea seems to agree: it fills the space it fills, and takes and gives as waves pass through its uppermost surface, and the moon and the sun push and pull it, and the warm and the cold, and the turning planet, drive the currents that keep it all moving. But the sea is not a living thing, however important it is to all life on this planet. Markets, and market cycles, are not living things either but here I am living in them, trying to observe them and use them, and occasionally harvesting a living from them too.

One night, on Fournoi, I was coming back from a taverna and the meltemi was blowing – as it does there, continually – and the moonlight in the southern sky was reflecting off the waves as they were blown towards it, as though trying to get home in a hurry. I stood, transfixed, and something deep within me shifted towards understanding. The night was alive: the promise of life was being carried from where I was standing into the arms of the future. Πάντα ῥεῖ.

Simon Ward