By Simon Parry





Last updated at 3:34 AM on 13th September 2009





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.









The 'ghost fleet' near Singapore. 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





The tropical waters that lap the jungle shores of southern Malaysia
could not be described as a paradisical shimmering turquoise. They are
more of a dark, soupy green. They also carry a suspicious smell. Not
that this is of any concern to the lone Indian face that has just
peeped anxiously down at me from the rusting deck of a towering
container ship; he is more disturbed by the fact that I may be a
pirate, which, right now, on top of everything else, is the last thing
he needs.





His appearance, in a peaked cap and uniform, seems rather odd; an
officer without a crew. But there is something slightly odder about
the vast distance between my jolly boat and his lofty position, which I
can't immediately put my finger on.





Then I have it - his 750ft-long merchant vessel is standing absurdly
high in the water. The low waves don't even bother the lowest mark on
its Plimsoll line. It's the same with all the ships parked here, and
there are a lot of them. Close to 500. An armada of freighters with no
cargo, no crew, and without a destination between them.






Simon Parry among the ships in southern Malaysia
My ramshackle wooden fishing boat has floated perilously close to this
giant sheet of steel. But the face is clearly more scared of me than I
am of him. He shoos me away and scurries back into the vastness of his
ship. His footsteps leave an echo behind them.





Navigating a precarious course around the hull of this
Panama-registered hulk, I reach its bow and notice something else
extraordinary. It is tied side by side to a container ship of almost
the same size. The mighty sister ship sits empty, high in the water
again, with apparently only the sailor and a few lengths of rope for
company.





Nearby, as we meander in searing midday heat and dripping humidity
between the hulls of the silent armada, a young European officer peers
at us from the bridge of an oil tanker owned by the world's biggest
container shipping line, Maersk. We circle and ask to go on board, but
are waved away by two Indian crewmen who appear to be the only other
people on the ship.





'They are telling us to go away,' the boat driver explains. 'No one is
supposed to be here. They are very frightened of pirates.'





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.





Local fisherman Ah Wat, 42, who for more than 20 years has made a
living fishing for prawns from his home in Sungai Rengit, says:
'Before, there was nothing out there - just sea. Then the big ships
just suddenly came one day, and every day there are more of them.





'Some of them stay for a few weeks and then go away. But most of them
just stay. You used to look Christmas from here straight over to
Indonesia and see nothing but a few passing boats. Now you can no
longer see the horizon.'





The size of the idle fleet becomes more palpable when the ships' lights
are switched on after sunset. From the small fishing villages that dot
the coastline, a seemingly endless blaze of light stretches from one
end of the horizon to another. Standing in the darkness among the palm
trees and bamboo huts, as calls to prayer ring out from mosques further
inland, is a surreal and strangely disorientating experience. It makes
you feel as if you are adrift on a dark sea, staring at a city of light.





Ah Wat says: 'We don't understand why they are here. There are so many
ships but no one seems to be on board. When we sail past them in our
fishing boats we never see anyone. They are like real ghost ships and
some people are scared of them. They believe they may bring a curse
with them and that there may be bad spirits on the ships.'









Two container ships tied together in southern Malaysia, waiting for the next charter





As daylight creeps across the waters, flags of convenience from
destinations such as Panama and the Bahamas become visible. In reality,
though, these vessels belong to some of the world's biggest Western
shipping companies. And the sickness that has ravaged them began far
away - in London, where the industry's heart beats, and where the
plummeting profits and hugely reduced cargo prices are most keenly felt.





The Aframax-class oil tanker is the camel of the world's high seas. By
definition, it is smaller than 132,000 tons deadweight and with a
breadth above 106ft. It is used in the basins of the Black Sea, the
North Sea, the Caribbean Sea, the China Sea and the Mediterranean - or
anywhere where non-OPEC exporting countries have harbours and canals
too small to accommodate very large crude carriers (VLCC) or
ultra-large crude carriers (ULCCs). The term is based on the Average
Freight Rate Assessment (AFRA) tanker rate system and is an industry
standard.





A couple of years ago these ships would be steaming back and forth. Now 12 per cent are doing nothing





You may wish to know this because, if ever you had an irrational desire
to charter one, now would be the time. This time last year, an Aframax
tanker capable of carrying 80,000 tons of cargo would cost £31,000 a
day ($50,000). Now it is about £3,400 ($5,500).





This is why the chilliest financial winds anywhere in the City of
London are to be found blowing through its 400-plus shipping brokers.





Between them, they manage about half of the world's chartering
business. The bonuses are long gone. The last to feel the tail of the
economic whiplash, they - and their insurers and lawyers - await a wave
of redundancies and business failures in the next six months. Commerce
is contracting, fleets rust away - yet new ship-builds ordered years
ago are still coming on stream.









World shipping is tracked by satellite service Vesseltracker





Just 12 months ago these financiers and brokers were enjoying fat
bonuses as they traded cargo space. But nobody wants the space any
more, and those that still need to ship goods across the world are
demanding vast reductions in price.





Do not tell these men and women about green shoots of recovery. As
Briton Tim Huxley, one of Asia's leading ship brokers, says, if the
world is really pulling itself out of recession, then all these idle
ships should be back on the move.


South China Sea map





'This is the time of year when everyone is doing all the Christmas stuff,' he points out.





'A couple of years ago those ships would have been steaming back and
forth, going at full speed. But now you've got something like 12 per
cent of the world's container ships doing nothing.'





Aframaxes are oil bearers. But the slump is industry-wide. The cost of
sending a 40ft steel container of merchandise from China to the UK has
fallen from £850 plus fuel charges last year to £180 this year. The
cost of chartering an entire bulk freighter suitable for carrying raw
materials has plunged even further, from close to £185,000 ($300,000)
last summer to an incredible £6,100 ($10,000) earlier this year.





Business for bulk carriers has picked up slightly in recent months,
largely because of China's rediscovered appetite for raw materials such
as iron ore, says Huxley. But this is a small part of international
trade, and the prospects for the container ships remain bleak.





Some experts believe the ratio of container ships sitting idle could
rise to 25 per cent within two years in an extraordinary downturn that
shipping giant Maersk has called a 'crisis of historic dimensions'.
Last month the company reported its first half-year loss in its
105-year history.





Martin Stopford, managing director of Clarksons, London's biggest ship
broker, says container shipping has been hit particularly hard: 'In
2006 and 2007 trade was growing at 11 per cent. In 2008 it slowed down
by 4.7 per cent. This year we think it might go down by as much as
eight per cent. If it costs £7,000 a day to put the ship to sea and if
you only get £6,000 a day, than you have got a decision to make.





'Yet at the same time, the supply of container ships is growing. This
year, supply could be up by around 12 per cent and demand is down by
eight per cent. Twenty per cent spare is a lot of spare of anything -
and it's come out of nowhere.'





These empty ships should be carrying Christmas over to the West. All
retailers will have already ordered their stock for the festive season
long ago. With more than 92 per cent of all goods coming into the UK by
sea, much of it should be on its way here if it is going to make it to
the shelves before Christmas.









Lights from the fleet of ships illuminate the night-time horizon





But retailers are running on very low stock levels, not only because
they expect consumer spending to be down, but also because they simply
do not have the same levels of credit that they had in the past and so
are unable to keep big stockpiles.





Stopford explains: 'Globalisation and shipping go hand in hand.
Worldwide, we ship about 8.2 billion tons of cargo a year. That's more
than one ton per person and probably two to three tons for richer
people like us in the West. If the total goes down by five per cent or
so, that's a lot of cargo that isn't moving.'





The knock-on effect of so many ships sitting idle rather than moving
consumer goods between Asia and Europe could become apparent in Britain
in the months ahead.





'We will find out at Christmas whether there are enough PlayStations in
the shops or not. There will certainly be fewer goods coming in to
Britain during the run-up to Christmas.'





Three thousand miles north-east of the ghost fleet of Johor, the
shipbuilding capital of the world rocks to an unpunctuated chorus of
hammer-guns blasting rivets the size of dustbin lids into shining steel
panels that are then lowered onto the decks of massive new vessels.





As the shipping industry teeters on the brink of collapse, the activity
at boatyards like Mokpo and Ulsan in South Korea all looks like a sick
joke. But the workers in these bustling shipyards, who teem around
giant tankers and mega-vessels the length of several football pitches
and capable of carrying 10,000 or more containers each, have no choice;
they are trapped in a cruel time warp.


There have hardly been any new orders. In 2011 the shipyards will simply run out of ships to build





A decade ago, South Korean President Kim Dae-jung (who died last month)
issued a decree to his industrial captains: he wished to make his
nation the market leader in shipbuilding. He knew the market
intimately. Before entering politics, he studied economics and worked
for a Japanese-owned freight-shipping business. Within a few years he
was heading his own business, starting out with a fleet of nine ships.





Thus, by 2004, Kim Dae-jung's presidential vision was made real. His
country's low-cost yards were winning 40 per cent of world orders, with
Japan second with 24 per cent and China way behind on 14 per cent.





But shipbuilding is a horrendously hard market to plan. There is a
three-year lag between the placing of an order and the delivery of a
ship. With contracts signed, down-payments made and work under way,
stopping work on a new ship is the economic equivalent of trying to
change direction in an ocean liner travelling at full speed towards an
iceberg.





Thus the labours of today's Korean shipbuilders merely represent the
completion of contracts ordered in the fat years of 2006 and 2007.
Those ships will now sail out into a global economy that no longer
wants them.





Maersk announced last week that it was renegotiating terms and prices
with Asian shipyards for 39 ordered tankers and gas carriers. One of
the company's executives, Kristian Morch, said the shipping industry
was in uncharted waters.





As he told the global shipping newspaper Lloyd's List only last week:
'You have a contraction of oil demand, you have a falling world economy
and you have a contraction of financing capabilities - and at the same
time as a lot of new ships are being delivered.'





Demand peaked in 2005 when, with surplus tonnage worldwide standing at
just 0.7 per cent, ship owners raced to order, fearing docks and berths
at major shipyards would soon be fully booked. That spell of 'panic
buying' has heightened today's alarming mismatch between supply and
demand.





Keith Wallis, East Asia editor of Lloyd's List, says, 'There was an
ordering frenzy on all types of vessel, particularly container ships,
because of the booming trade between Asia and Europe and the United
States. It was fuelled in particular by consumer demand in the UK,
Europe and North America, as well as the demand for raw materials from
China.'





Orders for most existing ships to be delivered within the next six to
nine months would be honoured, he predicted, and the ships would go
into service at the expense of older vessels in the fleet, which would
be scrapped or end up anchored off places like southern Malaysia.





But, says Wallis, 'some ship owners won't be able to pay their final
instalments when the vessels are completed. Normally, they pay ten per
cent down when they order the ship and there are three or four stages
of payment. But 50 to 60 per cent is paid on delivery.'





South Korean shipyard Hanjin Heavy Industries last week said it had
been forced to put up for sale three container ships ordered at a cost
of £60 million ($100 million) by the Iranian state shipping line after
the Iranians said they could not pay the bill.





'The prospects for shipyards are bleak, particularly for the South
Koreans, where they have a high proportion of foreign orders. Whole
communities in places like Mokpo and Ulsan are involved in shipbuilding
and there is a lot of sub-contracting to local companies,' Wallis says.





'So far the shipyards are continuing to work, but the problems will
start to emerge next year and certainly in 2011, because that is when
the current orders will have been delivered. There have hardly been any
new orders in the past year. In 2011, the shipyards will simply run out
of ships to build.'





Christopher Palsson, a senior consultant at London-based Lloyd's
Register-Fairplay Research, believes the situation will worsen before
it gets better.





'Some ships will be sold for demolition but the net balance will be
even further pressure on the freight rates and the market itself. A lot
of ship owners and operators are going to find themselves in a very
difficult situation.'





The current downturn is the worst in living memory and more severe even than the slump of the early Eighties, Palsson believes.





'Back then the majority of the crash was for tankers carrying crude
oil. Today we have almost every aspect of shipping affected - bulk
carriers, tankers, container carriers... the lot.





'It is a much wider-spread situation that we have today. China was not
a major player in the world economy at that time. Neither was India. We
had the Soviet Union. We had shipbuilding in the United Kingdom and
Europe.





'But then, back in those days the world was a very different place.'





http://www.dailymail.co.uk/home/moslive/article-1212013/revealed-the-ghost-fleet-recession.html

storing oil?

Many are cargo, and if you look at the few close ups, you can see they are riding high in the water. Nothing on board.



 

Group buy for USS ARFCOM

Interesting

There are some in the ME doing that... there is NO shortage of oil.

This

/thread


Dibs on being Captain!!!!!

Dibs on being Somali Pirate Exterminator Czar

I heard that was a myth, there is no ships filled with oil just sitting there with no where to go.

APL ships are container ships.  APL used to stand for "American President Lines" and they used to have US flagged ships.  Now I think APL has been merged and is now part of another shipping company.

Dibs on Weaponry Czar.

I see starvation increasing around the world.

Interesting, I was wondering where all the ships that brought imports back in the 2004 era to the US from China went.

Waterworld................


But, but but, the recession is OVER, Obama and his ship of fools said so...................

nice oil slick it's producing

Fuck that, i call admiral... we could have the great Arfcom fleet





 

AAAAAGH!!!!! Man the ARFboats and get underway. We go to plunder the ships full of cheap ammo!

I'll be the cook.

The utility of oil makes that a losing affair.  Unlike gold, the market for oil is too dynamic and storage costs too great.  The only oil being stored is bunker fuel.





 

Cook, bring me some pork loin cooked on an electric smoker, pronto.


 

In graphical form...baltic dry index...down to half of peak.

How long until many of those ships are just abandoned?

Size
332,000 personnel


280 ships, 3,700 aircraft








 

US Army has more boats than the US Navy, from what I have seen posted here.





 

Heres why.

We just didnt give them to you yet.
Once you give the Marines your old stuff you will get our old ships.
Carry on

But I thought there were green shoots and Black Jesus had healed the world economy and the worst was behind us and it's all uphill from here?

DO YOU MEAN BLACK JESUS LIED?!

Yeah, the article says 500!

We really are screwed.

Why?

 

Oh noes a 12% decline in shipping after an unprecedented boom.   If only our housing and employment markets could be in as good of shape.

BTW, speaking of housing I bet a lot of those ships represent those that used to carry materials for the construction industry which is stagnant.

The ships in question are in "storage" so we are counting the US Navy mothball fleet as well.

$5500 a day?



We can do that! It's pirate hunting time!!!

That guys writing style is fucking annoying. Well the style it's self isnt he just can't pull it off.

In WWII the US army had more.
this is no longer the case.  It hasn't been for decades.

also, the writer says the fleet is close to 500 ships.

I don't thnk we have more than 400 active ships at this point.
So it would appear the author is correct.

So. It begins.

You got your Hookers and Blow Czar right here!

I'm in.  I pledge $87.

What!!

Just wait a little longer and you can buy a dozen ships foor that..

Don't know how old the sat images are of Sungai Rengit but if you look at google maps, there's thousands of ships anchored there.



... Like I stopped counting at 800 and I wasn't even a tenth way around the island.

WAY too long an article...can someone just bottom line it for me?

Uhhhh..


The world economy is fucked...

Yupp.. Thats it. Yupp...

I'm thinking the USN still has the advantage in gross tonnage, however.

Reminds me of the before picture at Bikini Atoll.

Where They Are



Where They Are Headed

I've been there.  THere are also a lot of vessels moored in Subic Bay, RP.  Subic advertises themselves as having cheaper mooring fees than Singapore.  Ghost fleet it is.  A caretaker company or husbanding agent goes around in a banca boat to check each vessel regularly and make sure they are not sinking.  That fleet has been growing since late last year.  I saw it in November, February, and May.

from working at the ports of LA/LB i can tell you shipping is down about 60% from early 07.

that 12% is worldwide. we used to have around 35 ships in port in a normal day. now close to 15 is the norm. about half of what comes into and goes out from the USA is by way of the ports of LA/LB.

many terminals are starting work on upgrades that will take 5-10 years.

Another indicator of the lack of shipping business is the number of conex containers stacked up in ports around the world.

Nein.