SINGAPORE AND THE PHILIPPINES ARE CASHING IN ON SHIPPING

With international trade now in double digit percentage decline, as ships unload their last cargoes they head back to Asia in ballast to await their fate. And Singapore and the Philippines are welcoming them with open arms because it is a lucrative business. Already over a thousand large container ships are anchored in their ports. The ship owners are charged “storage” by the deadweight ton so the larger the ship the greater the return. Although the politicians around the world are posturing to the contrary, global trade is in rapid decline for two reasons, firstly the recession that has hit the world and secondly and more importantly, a return to protectionism because globalization simply has not worked. This means most ships now laid up and no matter what their age the chances are they will never carry another stick of freight again and their next voyage will be to the scrap yard, which is great news for India and China!

What has amazed me so far is no large shipping company has entered into bankruptcy for they all must be seriously hurting, especially the ones who have built the megaships to ply the Pacific from China to America. The widening of the Panama Canal might just end up being a huge waste of money because Asian trade is already in terminal decline and thus the economics of Eastern seaboard and Gulf States needing a direct link is already rapidly becoming unnecessary. The ports of Long Beach and Los Angeles with the help of railroads are most able set up to continue to act as the Asian gateway.

Amongst the specialist vessels to be hit hard by the recession are the car carriers. Many relatively new ships are being permanently laid up awaiting orders from the owners to which scrap yard they will be heading. As demand slackens for bulk ships, many of the newer vessels await the same fate as their older sisters. In the meantime Singapore and the Philippines can look forward to some very profitable years ahead in being the biggest grave yard for ships the world has ever seen.

Tags: America, Asia, China, Gulf of Mexico, Long Beach, Los Angeles, Ocean Shipping, Panama Canal, Philippines, Ports, Singapore