Ghost Fleet of the Recession
The biggest and most secretive gathering of ships in maritime history lies at anchor east of Singapore. Never before photographed, it is bigger than the U.S. and British navies combined but has no crew, no cargo and no destination – and is why your Christmas stocking may be on the light side this year.
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Fascinating article by Simon Parry in the Daily Mail this evening on the Ghost Fleet of Singapore — 100s of empty container ships sidelined by the recession.
Excerpt:
Here, on a sleepy stretch of shoreline at the far end of Asia, is surely the biggest and most secretive gathering of ships in maritime history. Their numbers are equivalent to the entire British and American navies combined; their tonnage is far greater. Container ships, bulk carriers, oil tankers – all should be steaming fully laden between China, Britain, Europe and the US, stocking camera shops, PC Worlds and Argos depots ahead of the retail pandemonium of 2009. But their water has been stolen.
They are a powerful and tangible representation of the hurricanes that have been wrought by the global economic crisis; an iron curtain drawn along the coastline of the southern edge of Malaysia’s rural Johor state, 50 miles east of Singapore harbour . . .
It is so far off the beaten track that nobody ever really comes close, which is why these ships are here. The world’s ship owners and government economists would prefer you not to see this symbol of the depths of the plague still crippling the world’s economies.
So they have been quietly retired to this equatorial backwater, to be maintained only by a handful of bored sailors. The skeleton crews are left alone to fend off the ever-present threats of piracy and collisions in the congested waters as the hulls gather rust and seaweed at what should be their busiest time of year.
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The ‘ghost fleet’ near Singapore.
World shipping is tracked by satellite service Vesseltracker
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Source:
Revealed: The ghost fleet of the recession
SIMON PARRY
The Mail, 13th September 2009
http://www.dailymail.co.uk/home/moslive/article-1212013/Revealed-The-ghost-fleet-recession.html
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September 13th, 2009 at 9:04 pm
summary of the article implies that this is conspiratorial – to me, this is just bidness
in 1984 there were many oil tankers laid up in the Johore River. Interestingly there are now many container ships as well – old school, transport oil on the high seas – new school transport large quantities of goods as well.
hmmm, this is just the owners of the vessels hanging on – just like owners of real estate. they prefer to lay up the ships and be prepared for them to come back into service and start makin’ cash flow again soon before they have to default.
same cash flow model as big RE – no cargo – no cash flow – how to hang on until international commerce recovers
we bought laid up oil tankers in the 80′s for scrap value and converted them to Floating Production Storage and Offloading units to develop remote and marginal oil fields.
someone will have to figure out what to do with cheap container ships, or it will be to the scrap yards, sorry
September 13th, 2009 at 9:09 pm
reality
September 13th, 2009 at 9:28 pm
I enjoyed the article but also fail to see the conspiratorial/secretive aspect of it. Particularly with easily-obtained photographic and satellite evidence.
September 13th, 2009 at 9:39 pm
not sure that its a conspiracy. its just the reality of the trade destruction thats happened. and it reflects reality. and it can’t be overlooked
September 13th, 2009 at 9:45 pm
But Harry Wanger says it’s to the moon from here. On another note, this could get interesting. Asian arkets don’t seem to be happy tonight. And, according to Harry, they futures are ANTICIPATING a down day in the U.S. tomorrow.
http://www.nytimes.com/2009/09/14/business/global/14trade.html?_r=1&hp
September 13th, 2009 at 9:55 pm
I think the conspiracy/secrecy aspect is in the eye of the beholder. To those living on shore, the ships have been parked without their knowledge (think of waking up and finding a vacant property adjoining yours, suddenly filled with tractor-trailers. A group of people has obviously made a decision (conspiracy) to do something affecting you, without your knowledge (secrecy). I can understand the fishermen being afraid.
September 13th, 2009 at 9:56 pm
Mannwich, if this is the start of a sustained move down, it would coincide perfectly with my being worn down as a bear. ;-)
September 13th, 2009 at 9:57 pm
They parked them near Singapore rather than in Norway’s colder waters because they expected a faster rebound. Uh huh.
September 13th, 2009 at 9:59 pm
Sorry, I do smell more than a whiff of sensationalism is this article. More factual research might reveal that a fair percentage of those ships have been there for years.. check dockage, a rust bucket dumping ground..but along those lines, i found these earlier articles about Maersk exiting the shipbuilding industry very interesting..
http://www.procurement-online.com/news/14486
a phrase of note in the second article, “…and most recently with China’s determined endeavors of becoming the world’s largest shipbuilding nation.”
http://www.joc.com/node/412824
September 13th, 2009 at 10:24 pm
Can’t they rent them out? I would like to charter an oil tanker for my next vacation.
September 13th, 2009 at 10:37 pm
They put them close to singapore so they would be close to cheap drydocks and china’s container ports. I don’t think there is much of a conspiracy here. In the picture they show many smaller vessels too. Vessel rentals are off 12% – that doesn’t sound too bad.
September 13th, 2009 at 10:39 pm
@Mannwich: if you remember, I called out a possibility on trade war between U.S China last week. This could very well end up pretty bad.
September 13th, 2009 at 10:41 pm
Mannwich:
Last I saw(about an hour ago0, Bloomberg was listing US futures(meaning DOW, S&P and Nasdaq) all down almost a percent. That is a lot(for the past few months anyway).
September 13th, 2009 at 10:45 pm
Perfect for anyone wanting to get a head start on preparing for WaterWorld. I think that’s part of Al Bore’s Global-Warming-The-Polar-Caps-Are-Melting hooplah….
September 13th, 2009 at 10:46 pm
Hey BR — all my posts are still gettin’ moderated!
September 13th, 2009 at 11:06 pm
We had railroad freight cars parked on all the empty tracks in our county back in the recession of 1975-6. That was right after hundreds of physicians and other professional people were convinced to ‘invest’ in railcars – as a sure financial winner. Plus ca change…
After the cars got moved, the track was pulled up on several sections. I could never figure out why they did that.
September 13th, 2009 at 11:17 pm
OT
Best line from Hussman’s letter this week:
“There is some talk, of course, of yet another stimulus plan, but this would be like laying a fresh band-aid over a growing infection.”
September 13th, 2009 at 11:31 pm
I keep hearing the range of 12% – 15% in the various article I read. So is the depth of the revenue correction 15%? How much of that is profit after all expenses are paid? Is that why Maudlin talks about us muddling through because we now have a bunch of zombie companies that have had their profit margins stripped from them and are now just wandering along waiting to get to the day when their revenue models start turning out profits again?
September 13th, 2009 at 11:33 pm
“There is some talk, of course, of yet another stimulus plan, but this would be like laying a fresh band-aid over a growing infection.”
I pity the sucker that will eventually have to pull that thing off
September 14th, 2009 at 1:44 am
If you looked out of the windows of offices in the financial centre of Singapore at any time in the last two years, you’ve been seeing a growing flotilla of empty ships. No place else for them to go but Johor. I don’t see any conspiracy here, just another Daily Mail journo with a good line in spin.
September 14th, 2009 at 3:19 am
amazing pictures though.
Telegraph Picked on the next world crisis.
The next world crisis
September 14th, 2009 at 5:54 am
I live in Singapore, and for the last three years have owned a property overlooking the scene you have described and pictured. I can confirm that there has been little apparent change in activity in ships coming and going from the harbour, or the number of boats parked at any one time. I’m afraid Mr Parry’s original story appears to be somewhat speculative.
September 14th, 2009 at 8:52 am
Of course, if the global economy rebounds the way these vessels’ owners hope, then the price of crude resumes its ascent to triple digit figures and they won’t be able to operate them anyway. That would be the ultimate irony.
September 14th, 2009 at 9:21 am
[...] Barry Ritholtz Sends Us to Simon Parry: Ghost Fleet of the Recession Here, on a sleepy stretch of shoreline at the far end of Asia, is surely the biggest and most secretive gathering of ships in maritime history. Their numbers are equivalent to the entire British and American navies combined; their tonnage is far greater. Container ships, bulk carriers, oil tankers – all should be steaming fully laden between China, Britain, Europe and the US, stocking camera shops, PC Worlds and Argos depots ahead of the retail pandemonium of 2009. But their water has been stolen. [...]
September 14th, 2009 at 12:43 pm
Idling empty ships are better than idling full ships off the coast of Cali, waiting for their goods to have a market — and waiting for those goods to go on a companies books.
September 14th, 2009 at 1:57 pm
Barry, that’s where they are keeping all The Cash on the Sidelines.