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Thousands Of Rusting Ship Hulls Are A Fitting Tribute To The Speculative Market Bubble
The Daily Mail recently made waves with a photo exposing what it called the "ghost fleet of the recession" where hundreds of ships were shown on anchor off the straits of Singapore, doing nothing except rusting: a tribute to the unprecedented collapse in world trade, the bulk of which is seaborne, and the huge amount of excess slack in shipping.
Zero Hedge decided to probe this idea further, and for that we took advantage of the very useful real time ship tracker functionality provided by vesseltracker.com (any reader who has Google Earth can easily replicate these results using the following data file).
The results
First we wanted to show how traditionally functioning critical routes are still heavily trafficked, as can be seen by the large amount of green highlights in the following snapshots (green indicates operating ship, red denotes a ship out of spot/charter and currently unused).
Gibraltar:
Denmark:
Red Sea (one hopes the Somali pirates do not have access to Vesseltracker):
Yet where it gets interesting is when one scours for comparable packets of inactivity as that captured by the Daily Mail. As a first example of just how bad it really is, we recreate the image of the Singapore Strait that is shown on the picture at the top:
What is surprising is how prevalent this pattern is around the globe. Some comparable areas we discovered were the following:
Coast of Britain:
Qinhungdao (Chinese coast) - note the pattern that allows any active ships to actually enter the harbor. This is probably not a good indication of the Baltic Dry Index to going up any time soon.
Putuo - another representation of Chinese overzealousness in building drybulkers:
Belgian coast:
Dubai: the gateway to the middle east is essentially closed. All that expensive oil, and nobody is transporting it...At least if you look closely you can see some very nice man made islands, that are the only remnants of the great Dubai experiment in recreating the US credit/real estate bubble:
Most shocking is the situation around the Bosporus: the transit corridor between Russia and the rest of the world is orders of magnitude worse than even the Singapore case.
As for our own back yard, this is the situation in the Gulf of Mexico: a sea of red. One wonders how many of these ships are merely filled with crude, happily waiting for oil to hit $145 one more time.
The bottom line: world trade has collapsed, shipping lines, once flourishing, have become graveyard archipelagos populated by rusting ship skeletons. Yet all of this is beyond the land, and thus far from sight. Of course, who needs trade when you have a speculative market trading in its own bubble, hitting yearly highs day after day, thanks only and exclusively to the Chairman's printing press. It is a pity these ships can not sail in the sea of hundred dollar bills that is being created each and every day at the Federal Reserve, whose only use these days it seems is to buy junker stocks and to feed the algos that lift whatever offers are stupid enough to float in the equity market.
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Interesting the few mega-yachts floating around these places. 225' Aviva sailing down the Red Sea towards Jeddah amongst tankers and such? Hrm...
I was in Istanbul in July and saw hundreds of cargo ships, apparently disused, some of them clearly listing, lining the Marmara shore on the way to the airport.
There are no disused cargo ships in the Golden Horn, they clearly wouldn't fit, or in the Bosphorus for that matter, but there seem to be many of them along the Marmara.
How that correlates with the red dots on the graphic shown above I couldn't say, but the scene I saw made me think immediately of what I'd previously read about the Singapore Strait. I don't think the result posted in this piece is entirely an artifact for the Bosphorus region, by any means.
they are there because it is a port.. They need to anchor and wait for their turn as all the containers are processed and moved together to be loaded/unloaded, this can actually take days to weeks.. especially when you process 500 ships a day.. max 10 ships at one given time, that means all other ships have to anchor. The port you posted in China, is the world’s highest in terms of container volume. You would get the same result if you tracked people standing in a queue at a bank or cars in a traffic jam.. This is just stupid..
I want to point out that all the pictures with green dots, only contain small docks and are primarily fairways for Shipping. What is a fairway.. it is like a highway for cars.. The specific locations serve as areas where a high density of ships travel through as it is the shortest distance to travel.
Examples - From your pictures, let us put them in context for those that do not know shipping and do not know geography:
Gibraltar: (Strait of Gibraltar)
Only passage way for all ships traveling from and to the Mediterranean Sea to the Atlantic Ocean. Over 20 countries have direct access to the Meditarranean Sea and are thus served by this passage way.
Denmark: (The Straits called Skagerakk and Kattegat)
Only possible route for ships traveling from Sweden, Parts of Denmark, Finland, Russia, Estonia, Latvia, Lithuania, Poland and parts of Germany. Even during WWII and WWI this was an important strategic control point for Naval fleets and U-boats (submarines). Same as Gibraltar above.. which served UK well as far as taxing passage of boats during colonial times. Russia had to use this passage way because during winter the northern ports are frozen solid.
Read Sea: (Another passage way, Suez Canal)
As Gibraltar and Denmark above.. it primarily serves as a passage way not a dock/birthing point. It is a high density narrow strait like the two above where boats move.. and do not anchor! The 163 km (101 mi) long man-made Suez Canal in the southeast of the Mediterranean Sea connects to the Red Sea. This is one of the most highest density shipping points in the world.. because ships don't want to travel all the way south of Cape Town, South Africa to delivery goods and oil to Europe.
--- ALL OF THE ABOVE ARE STRAITS/CANALS where there is traffic throughput NOT docks
So let us look at all the REDS:
Singapore: I have mentioned this before, read wikipedia
http://en.wikipedia.org/wiki/Port_of_Singapore
It is world's busiest port, and you can drive the circumference of Singapore in 1hr 30 min. Thousands of ships anchor everyday.. due to high traffic.
Britain: (not sure where this is as you did not put the location name.. it is a port, a small one, with traffic.. normal to anchor)
Qinhuangdao: Qinhuangdao is the chief port of Hebei province, serving large portions of China and is key port for coal. As you may know China builds 2 new coal power plants per week. Qinhuangdao is the world’s largest coal loading port, strategically placed for transporting coal from the north to the south of China. Fifty percent of the Chinese coal, or some 200 million tons, is handled here every year.
Four national railways reach the port and when the trains arrive the coal needs to be unloaded as fast as possible for further transportation to the ships. All coal terminals at Qinhuangdao use the most advanced automatic coal handling equipment. http://www.metsomaterialstechnology.com/corporation/about_eng.nsf/WebWID...
Putuo: (more accurately Zhoushan Island (ironically meaning Boat Island - looks like a boat):
There are several hundred ports around the islands, separated into three areas: Dinghai Port Zone, Shen-jia-men Port Zone (?????), and Laotangshan Port Zone (?????). - it also merges with Ningbo port.
Two deepwater ports in east China's Zhejiang Province, Ningbo and Zhoushan, were officially declared by the provincial vice governor to be merged in a bid to create the third biggest port in the world. Cargo handling capacity of Ningbo Port is expected to exceed 270 million tons in 2005, ranking second in China, and Zhoushan Port is expected to handle over 80 million tons of cargo.
There were 591 berths in the two ports at the end of 2004, of which 53 were for over 10,000 tons.
After completion, the new port will be an integral part of the Shanghai International Shipping Center, as well as an important logistic and industrial base
So no surprise you see a crap load of parked ships. Also surprised you didn't include Rotterdam and you would have three of the world's biggest ports.
Belgium (Port of Antwerp):
The port of Antwerp has become one of Europe's largest sea ports, ranking third behind Rotterdam and Hamburg for container throughput in 2007.[1] Its international rankings vary from 11th to 17th (AAPA). In 2007, the Port of Antwerp handled 182,900,000 MT of trade[2] and offered liner services to 800 different maritime destinations
Dubai: (I am pretty sure it is the Jebel Ali Port)
Jebel Ali is the world's largest man-made harbour and the biggest port in the Middle East. The area is also home to "5,500 companies from 120 countries".
Port Rashi also in Dubai serves mainly for Passenger ships.
Turkey (Bosporus or more correctly The Port of Haydarpasa)
Is a strait that forms the boundary between the European part (Rumelia) of Turkey and its Asian part (Anatolia). The world's narrowest strait used for international navigation, it connects the Black Sea with the Sea of Marmara
The Port of Haydarpa?a, also known as the Port of Haidar Pasha (Turkish: Haydarpa?a Liman?) is a general cargo seaport, ro-ro and container terminal, situated in Haydarpa?a, Istanbul at the southern entrance to the Bosphorus. The port is operated by the Turkish State Railways (TCDD) and serves a hinterland which includes the country's most industrialized areas.
It is the biggest container port in the Marmara Region[1] and with an annual cargo volume exceeding six million metric tons (MT), is Turkey's third biggest port after Mersin and Izmir.
Gulf of Mexico (or more correctly Port of South Louisiana)
The Port of South Louisiana is the largest volume shipping port in the Western Hemisphere and 9th largest in the world.[1] It is the largest bulk cargo port in the world.
It extends 54 miles (87 km) along the Mississippi River between New Orleans, Louisiana and Baton Rouge, Louisiana, centering approximately at LaPlace, Louisiana, which serves as the Port's headquarters location.
This port is critical for grain shipments from the Midwest, handling some 60% of all raw grain exports.
----CONCLUSION
1. everything that was green were straits.. or passageways for ships, not docks.
2. docks were in red, why? because they are docked, waiting to unload/load shipments and are anchored..
The article in the Daily Mail and this are both full of pure BULLSHIT. I rest my case.. next time do some research before you go out and spread propaganda crap.
So, given your willingness to sign your work... I can now comfortably conclude that all of those red dots are full of well-made products that I can't live without, and the retail numbers are on the up. Excellent!
I think I'll go put some Monday morning buy orders in, and wait for this weekend's post-labor-day/pre-pre-pre-christmas rush sales. And I'll drive there using my soon-to-be 20% per gallon discounted gasoline.
(and to think i was worried about the markets for a minute there... me (ye) of little faith...)
Whether i sign my post or not has little to no relevance and does not increase or decrease my credibility - it has as much effect as your i.knoknot username and has no relevance to the argument being made. In fact showing as anonymous, will allow a reader to create an objective opinion rather than being affected by my username and creating an opinion based on that. Neither do I wish to be spammed by a website that spends little to no time to research their highly subjective postings..
nice straw man argument there - you throwing up economic info based on totally different information is not relevant to the argument being made by the article.
I highlighted facts of how the pictures that were pointed out in the article do not in anyway back up the authors arguments. He is comparing oranges and apples.. you cannot compare a strait/passageway with a dock. Also for anyone who knows only a slight bit about shipping, there is a queue time and a docking time.. and ships often lay at harbor for a multitude of reasons of up to 2 weeks at a time. A red dot, simply means not making way or under way, it means at anchor. A dock can only handle certain amount of births at a time, creating a queue just like a traffic jam with a car, or at the bank.
Do as you please with your investment, i really don't give a rats ass.. i do however care about getting facts straight. This article is far from displaying the information in its context or in a truthful manner - that is the issue at hand.
and tyler durden created this site...
your actual ID may indeed be irrelevant, but some sort of binding of ID to your writings helps identify both the quality and bias of your writings over time. To not do so is both chicken feces and tosses you into the bundle of credential-less authors that dump-and-run in these worlds.
truth may be there, but the agenda is not. without taking the diligence to audit you and your supposed truth/info, you are barely more than noise. there are many here who have proven their mettle, shown and ID of some sort, and I will read them and critique them accordingly. Anonymous, in it's own right is a cop-out.
i've never gotten spam for ZH, and I would filter them if I did. chicken feces
Assuming red means 'without charter' and green 'is chartered' (as stated in the blog entry) then no analysis is necessary as its common sense that uncharted vessels (anchored or otherwise as indicated via the inner symbol) will congregate near a major port, while most vessels in the fairway regions are engaged in commerce, and thus green.
Are you color blind??
I have a friend who is a conductor for the Canadian Pacific Railway and works on the east - west main line in Canada. About 7 or 8 years ago the company paid him and others a large portion of their wage to stay at home as there were not enough trains. He is once again being paid to stay at home as there is not enough train traffic. He is part of the traffic chain moving goods around the world. So if he is idle and waiting for an increase in traffic, I presume a lot of other links of the chain are idle, including ships.
Quite possible, however one individual does not represent the world.
1. he was at home 7 or 8 years ago due to lack of trains
2. now he is at home for an entirely different reason, so it is not happening again. This would be new.
3. U.S / Canada is affected in an entirely different way than Asia, Asia still has growth; and China and India are consuming faster and more every year.
It is a nice heading and slant though..got my eye.Good work And great discussion, people.
Hi,
Here is a french paper on the same subject ("ghost fleet" near Singapore) :
http://www.leblogfinance.com/2009/09/crise-que-dit-le-baltic-dry-index-....
I cannot believe how many posters do not know that you put a ship in a berth, not a birth. I think only one got it right.
Well, I've just checked out vesseltracker.com and I get different information to the author of this article. Click on the name of a ship on vessel tracker and it gives details - but I couldn't see any information about whether a ship was under charter or not. Rather, the green ships are vessels underway, and the red vessels are stationary.There's no information as to whether a stationary vessel is carrying cargo or not. There is however, information about the date they moored (ie changed from green to red). As of today (2nd October) none of the vessels I checked out in the Bosphoros or Singapore have been moored for more than a week - which would suggest that they are probably just waiting their turn to load or unload or proceed through a shipping bottleneck. In any event, they're hardly 'rusting ship skeletons'.
It would seem that this article is either sloppy journalism or downright disinformation.
Beware of this sort of scare mongering. This is called the Eastern Sea Anchorage in Singapore and there are always between 400-600 ships there even in bull markets, they are waiting to load / unload at the port. there is nothing new or shocking in the Singapore photo. Its an anchorage for one of the worlds busiest ports, of course it will be full!
Cheers
Singapore Sling
I am a singaporean and my office faces PSA directly and I did noticed that only 20% of the cranes are being utilized since lehman went down last year. I have a pic of the similar direction taken back in 2007 and those cranes are always operating at full load everyday without fail. wat does that tell u guys?
I am very glad the house of cards is collapsing. The corrupt people are so desperate for money that are making stupid mistakes and getting caught red handed.
I am a singaporean and my office faces PSA directly and I did noticed that only 20% of the cranes are being utilized since lehman went down last year. I have a pic of the similar direction taken back in 2007 and those cranes are always operating at full load everyday without fail. wat does that tell u guys?642-813 \ 642-902 \ 70-662 \ 70-640 \ 640-822
Quite possible, however one individual does not represent the world.
1. he was at home 7 or 8 years ago due to lack of trains
2. now he is at home for an entirely different reason, so it is not happening again. This would be new.
3. U.S / Canada is affected in an entirely different way than Asia, Asia still has growth; and China and India are consuming faster and more every year.
useful to know.
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