Here’s an interesting, but depressing article about the world’s shipping industry. As noted, this is going to get worse before it gets better.
18 thoughts on “The Ghost Fleet”
Comments are closed.
Here’s an interesting, but depressing article about the world’s shipping industry. As noted, this is going to get worse before it gets better.
Comments are closed.
Fewer trains are running, and all those ships are at anchor not burning fuel. This is why the retail price of diesel is what I look at for a first clue about the condition of the economy.
When a recovery really begins, train enthusiasts at places like the “Folkston Funnel” in south Georgia, shipping watchers at the world’s seaports, will see more traffic — and I’ll see the green LEDs at my corner gas station displaying much higher numbers compared to the red ones for gasoline.
Hey, wait a minute. I thought that “most economists now agree that the recession is over” (ABC radio news about two weeks ago). Why don’t these pesky facts ever match the news?
There’s a train yard in north east Houston. I’ve seen at least 20, maybe 30, locomotives end to end. All of them idle. There’s more on the southside too. Good thing GE is friendly with Obama.
@MfK even if the recession were over in the US that still leaves the rest of the world. It also implies only that economic contraction has stopped, not that we are back at previous levels (which we aren’t, even in the US).
The best leading indicator I’ve seen is the length of the average work week of current hourly employees. Last I heard it was very, very short and not getting longer. I’d be very interested to know where it stands now but unlike things like diesel prices it isn’t something I can casually notice while going about my own business.
A nascent recovery would see the average work work starting to pass the forty-hour mark, which would signal that employers should be about to start hiring.
Diesel fuel is _seasonal_, at least in the US, as it’s basically the same stuff as home heating oil.
Incidentally, diesel/heating oil stocks were at a 28-year-high as of August, due to reduced demand for shipping.. (though have yet to see this at the pump much)
http://online.wsj.com/article/BT-CO-20090908-713919.html
“Goldman Sachs said in a report it expects mountainous U.S. inventories of distillate fuel (diesel fuel/heating oil), at a 28-year high at the end of August, to decline in coming months, improving the supply/demand outlook. The bank repeated its forecast for $85-a-barrel crude oil by year end.”
(not saying that that has much to do with bunker fuel, though IIRC there’s been efforts lately to ‘green’ the fleet and have them use diesel, presumably the significant majority of transoceanic transport ships still use bunker)
No. 2 (diesel) vs. No. 6, according to Wikipedia. Good point.
Still, diesel is far more relevant to the larger economy than gasoline, which is all but exclusively a consumer-level fuel.
And, the retail price of No. 6 is a little difficult to spot-check on a routine drive around town. 😉
Shipping is a capital-intensive industry in which adding new capacity has a fairly long lag time. It should not be surprising that overcapacity occurs during downturns. And given the 8 gigatons of cargo that is shipped each year, even a little overcapacity means a lot of tonnage.
I suspect the problem is being compounded by the high cost of fuel. If fuel were still cheap, shipping costs could fall much more, which would increase demand.
McGehee: Here’s the best I could find with a just a quick google. (URL on my name)
“Average weekly hours of production and nonsupervisory workers (1) on private nonfarm payrolls by industry sector and selected industry detail”
1. Data relate to production workers in mining and logging and manufacturing, construction workers in construction,
and nonsupervisory workers in the service-providing industries. These groups account for approximately four-fifths of the
total employment on private nonfarm payrolls.
I think the best leading indicator of the recovery is going to be the fifty or so Democratic Congressmen who lose their jobs in November of 2010.
+++ to Carl
Carl is only correct to the extent that someone other than Republicans take those seats. There hasn’t been a Republican that’s been an overall boon to the economy since Reagan. I’m really hoping someone actually organizes an American Tea Party to attract the right candidates.
As for the Ghost Fleet, imagine what will happen to the shipping industry if some sort of synthetic oil or biofuel became cost-competitive and scalable. I think some of the technologies out there today have a shot of making it so.
Nonsense, Brock. Do not overlook the educational value of a serious bloodbath. Whoever takes those seats is definitely going to be looking nervously over his shoulder, watching for citizens with pitchforks.
Heck, they already are, you know. The last two elections totally eunuched the Republican Party in Washington. If, as Team Obama would have you believe, it was Republicans alone who stood in the way of their Master Plan, everything would be sailing along smoothly. Republicans don’t have the votes to pass a resolution in favor of motherhood and apple pie. The Democrats don’t need a single Republican vote in either House or Senate to pass any bill whatsoever.
No, the only reason the O Collective is having a hard time dismantling the Republic as fast as they’d like is because of Democrats in those seats, seats still warm from the bodies of their previous Republican holders, those same seats that will be in play in 2010. The Democrats who filled those seats are looking nervously over their shoulders. They can hear the knives being sharpened, and it’s they who have sent the message up to Democratic High Command that certain Spruce Gooses are not going to fly.
There was a good piece somewhere recently, I think a Tom Bevan column on RealClearPolitics, that pointed out the problem here is that the Democratic leadership is wildly out of ideological step with both the country, the average Democratic voter, and even the average Democratic Congressman. Men like Waxman, Kennedy, Schumer, Pelosi — these folks are totally secure in their own election, and can’t even readily comprehend that there exist districts in which Democrats have to take a less psychotically PC/collectivist line in order to get elected. It’s sort of a Pauline Kael effect among Congress’s leaders. What do you mean? Being a crypto-Stalinist snobby sneery prick always got me re-elected in San Francisco/Hollywood/Greenwich Village! I don’t see why it should be any different in, say, Cincinnati or Indianapolis…
As for the Ghost Fleet, imagine what will happen to the shipping industry if some sort of synthetic oil or biofuel became cost-competitive and scalable. I think some of the technologies out there today have a shot of making it so.
Brock, I don’t get it perhaps due to lack of imagination. Shipping costs drop slightly? What are the effects going to be?
I think there will be a similar bloodbath for some political businesses (that is, businesses where a considerable portion of the profit comes from public funds due to political maneuver). Banks are relatively protected because they got help from both sides, there are a bunch of them, and any federal benefits were often gained indirectly (for example, as part of a takeover of a failed bank). But the car companies and labor unions don’t enjoy similar protection. Republicans can take away the federal support. In 2012-2014, there may well be an unusual opportunity for the Republicans to destroy the UAW as well as the car companies it currently controls.
I wonder why the ghost fleet exists from a legal point of view? Seems odd to allow hundreds or thousands of ships to just sit there unless it’s some sort of no man’s zone or someone has arranged a cheap place to park vehicles.
Also, I think the discussion of “leading indicators” is on spot. If you have a significant fraction of global shipping parked indefinitely in a spot in Indonesia, then that is a big sign that the economy isn’t improving, at least on a global scale.