Singapore Ghost Fleet

The Daily Mail has a sensational piece on what it calls the “biggest and most secretive gathering of ships in maritime history.” Off the coast of Singapore, the bulk shipping capital of the world, sits a fleet of ships larger than any nation’s navy, yet with no crew or cargo. These ships should be transporting oil, resources, and consumer goods to the markets of the world, yet are sitting idle in the wake of the recession that has drastically reduced consumer spending and the global demand for cross-border goods.

The article is worth reading in its entirety as it is a very thorough rundown of how the slowdown in consumer spending is linked to a slowdown in shipping, and the subsequent ripple effect this has on the economy. The supply and demand economics of shipping are impossible to manage because of the length of time required to construct a ship from the time it is ordered to the time it is available to ship goods. 12% of the world’s ships are currently idle with no cargo to ship—but because hundreds of ships contracted years ago when the global economy was red hot have yet to come online, that could balloon to 25% by next year, what with all the new ships coming online. And while the heavy industry shipyards of the world in places like Korea and Japan continue to roar away as they complete orders, all shipyards expect to be as silent as a crypt once the current batch of orders are complete.

The upside is that a glut of freighters and low oil prices means that you can ship anything across the world for a fraction of the price that was charged last year. But the havoc and damage that will bring to the shipping industry will be felt for years to come.

ENDNOTE: This is a good article that highlights an important issue in the global economy, but the hysteric “never before photographed!” claim is silly—I saw dozens of idle ships out my airplane window as I departed Singapore the day after the article was published, and the existence of the fleet is no secret to the thousands of people flying to and from Singapore everyday. That being said, the article is definitely worth reading in its entirety.