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So, if you float a boat on a bubble, and the bubble bursts, what happens to the boat? That aside, I’d HOPE that the merchant marine is always larger than the US and Brit Navy combined, only because it makes it harder to kill people en mass. Still, I don’t know if this shows surplus capacity or slack demand. I just know that some people still don’t have in-door plumbing….
I thought the biggest maritime fleet ever was the Trojan War?
/sarcasm
The consequence of which is:
“The intense downward pressure on container shipping has led to a complete stagnation in orders for new ships, Clarkson said. “Nine consecutive months have now passed in which zero new box ship capacity has been placed on order””
http://www.joc.com/node/412972
Saw this, Yves. Happy you picked up on it.
This follows an era in which anything that might float carried something and we worried about whether it was safe. There is an air traffic equivalent in the Mojave Desert. Saw too where one US airline had issued its lightest fall flight schedule in x years (don’t’ remember the details). Globalization would seem to be dead. An era of protectionism awaits. See: Protectionist Measures Expected to Rise http://online.wsj.com/article/SB125295068841109309.html and E. Harrison’s post below.
It will be China who suffers more. Was it here that I saw that China manufactured 5 tires for each that it consumed? The Rest of the World (TROW) can buy all the tires it needs outside of China, probably at a better price, and be relatively well assured they contain no melamine.
From Angry Bear: “Federal officials have told a small New Jersey importer to recall 450,000 radial tires for pickup trucks, sport utility vehicles and vans after the company disclosed that its Chinese manufacturer had stopped including a safety feature that prevented the tires from separating.”
Foreign Tire Sales’s ability to monitor its contract manufacturer and get to the bottom of the quality problems was surely compromised by the fact that it was a seven-person office that never actually touched the tires it brought into the country.”
Never mind how much I admire and would love to meet the 7 people who can bring together this kind of business. A global supply chain of this nature is complicated and requires greater infrastructure than only 7 people.
Full article here: http://angrybear.blogspot.com/2009/09/travels-of-cheap-tire-in-global-economy.html
It is China that is in danger of becoming the next Japanese L shaped economy. What I don’t know is how that impacts TROW.
First pirates and now a ghost fleet – what next, the Kraken?
I don’t doubt the sincerity of the author or the stress that’s been placed on the shipping industry, but I would’ve liked to have seen a before and after photo of this particular anchorage.
I spent some time in Singapore about 15 years ago. The amount of vessel traffic waiting to load and unload is unbelievable. I’ve seen anchorages in Singapore and Panama that look like that photo in ‘normal’ times.
Just saying…
Indeed, there is a slump in the shipping business — though not as bad as it can get. For those who do not follow this business, I have to mention that shipping is as cyclic as it can get and it always is brutal on the downside as it is profitable on the upside. So, nothing really unusual about this picture. What was truly unusual was how long and lucrative the previous boom was. This led to overcapacity and you can see the results. Multi-billions were made in the last boom and now some of this wealth will simply disappear in this bust.
I just checked google earth’s images for the Mojave boneyard with no results. The last image is sometime in 2006 :( Microsoft’s satellite imagery is the worst offender with an image dated 1994!
Do you have a link to share with current boneyard statistics?
The markets seem to disagree with all the pessimisitics view here. Where is the disconnect?
The market, as has been definitely proven, is always right. So that means that the pessimists here are wrong. QED.
Please disregard all contrary evidence such as the rally into late 2007. Whether or not the NASDAQ gained almost 40% in a rally from July 2006 to October 2007 has no bearing on these matters.