Mail Online: The Ghost Fleet Of The Recession

I was born in a small/medium size harbour town with fog horns at night and strong winds all day long. We liked the salty air but hated this time of year, when summer turns to autumn, and you know it is just going to get darker for a very long time.

When I was a child, the Kockums shipyard in Malmö had the world's biggest gantry crane, which for many years stood as a strange symbol, no longer used, for the city I was born in. The good news is that in 2002, it was sold and dismantled, and shipped to Ulsan, South Korea.

However...

Must read over at Mail Online: Revealed: The ghost fleet of the recession anchored just east of Singapore By Simon Parry

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.


A lot of ships are already sitting idle, and the article notes that some experts believe the ratio of container ships not being used could rise to 25 per cent within two years. This is how the "extraordinary downturn" that shipping giant Maersk has called a "crisis of historic dimensions" is now playing out as shipping companies, the ones that should be making money from the global trade, are making losses.

What's worse, they are still building more ships in places like Mokpo and Ulsan in South Korea, where orders got placed two or three years ago, before the recession.

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.

Try explaining that to the workers who have families to feed and bills to pay, today.

I have written here previously about Kockums in my home town Malmö, and how the shipyard was forced to close down. The city is totally different today, after going through many changes. But that did not happen during a global recession.

We need more in-depth news articles like this, good journalism can be a kind of "fog horn" as we try to prepare, and try to help everyone who will be without a job as the global economy changes, fast.

The good news? As noted here on Kurashi earlier, shipping's effect on climate change is huge, and with more of the tankers sitting idle, at least we are polluting Earth's atmosphere a little less.