Only a few men are on board for the upkeep of the vessels and prevent accidents or stop pirates from seizing them. They are container ships, bulk carriers, oil tanker, a fleet the size of the entire British and American navies combined but with far greater tonnage and horizons. Used to go back and forth between China, Europe and the United States, these ships are now idle.
Many are container ships, especially taking Chinese goods to the world. However, the Asian juggernaut has had its exports slashed by 17.5 per cent and has had to cut its imports by 43.1 per cent (January 2008-January 2009).
Local fishermen say that every day new ships drop anchor. Some stay only for a few weeks, but most just stay put.
Although most fly the flags of Panama, Bahamas and other places of convenience, owners are most likely from the West.
Not having these ships sail means heavy losses in terms of crews, maintenance costs and interests. Last year an oil tanker could be chartered for US$ 80,000, now the same ship can go for as little as US$ 5,500. Bulk dry cargo ships (for minerals and grains) now go for US$ 10,000, down from US$ 300,000 in summer 2008. Right now would be the time to charter ships for the Christmas trade.
Martin Stopford, managing director of Clarksons, London's biggest shipbroker, said that container shipping has been hit particularly hard. “In 2006 and 2007 trade was growing at 11 per cent. In 2008, it slowed down by 4.7 per cent. This year we think it might go down by as much as 8 per cent.” Fees might even drop below cost.
Ship owners and crews are not the only ones feeling the pinch; ship builders are hurting too. Most of them are located in Asia. In 2004, South Korea got 40 per cent of world orders, Japan was second with 24 per cent, and mainland China was behind at 14 per cent.
Since there is a three-year lag between the placing of an order and the delivery of a ship, shipbuilders are now just completing contracts ordered in 2006 and 2007. Given the economic situation, some buyers are pushing to renegotiate terms and prices. Normally, they pay ten per cent down when they order a ship and 50 to 60 per cent on delivery.
For the shipbuilding industry prospects are very bleak, a far cry from 2005, a record year in terms of orders, a golden age when trade between East and West was at its apex.
For experts, all this idle tonnage is a sign that trade is still in crisis, and that the recession may still become a full-blown depression.