Cargo ships tread water,continue to wait for work

To go out in a small boat along Singapores coast now is to feel like a mouse tiptoeing through an endless herd of slumbering elephants....

To go out in a small boat along Singapores coast now is to feel like a mouse tiptoeing through an endless herd of slumbering elephants. One of the largest fleets of ships ever gathered idles here just outside one of the worlds busiest ports,marooned by the receding tide of global trade. There may be tentative signs of economic recovery in spots around the globe,but few here.

Hundreds of cargo ships some up to 300,000 tons,with many weighing more than the entire 130-ship Spanish Armada seem to perch on top of the water rather than in it,their red rudders and bulbous noses,submerged when the vessels are loaded,sticking a dozen feet out of the water.

So many ships have congregated here 735,according to AIS Live ship tracking service of Lloyds Register-Fairplay in Redhill,Britain that shipping lines are becoming concerned about near misses and collisions in one of the worlds most congested waterways,the straits that separate Malaysia and Singapore from Indonesia. The root of the problem lies in an unusually steep slump in global trade,confirmed by trade statistics announced on Tuesday.

China said that its exports nose-dived 22.6 per cent in April from a year earlier,while the Philippines said that its exports in March were down 30.9 per cent from a year earlier. The US announced on Tuesday that its exports had declined 2.4 per cent in March. The March 2009 trade data reiterates the current challenges in our global economy, said Ron Kirk,the US trade representative.

More worrisome,despite some positive signs like a Wall Street rally and slower job losses in the US,is that the current level of trade does not suggest a recovery soon,many in the shipping business say.

Western consumers still adjusting to losses in value of their stocks and homes are in little mood to start spending again on nonessential imports,said Joshua Felman,the assistant director of the Asia and Pacific division of the International Monetary Fund.

So badly battered is the shipping industry that the daily rate to charter a large bulk freighter suitable for carrying,say,iron ore,plummeted from close to 300,000 last summer to a low of 10,000 early this year.

Story continues below this ad

The rate has rebounded to nearly 25,000 in the last several weeks,and some bulk carriers have left Singapore. But ship owners say this recovery may be short-lived because it mostly reflects a rush by Chinese steel makers to import iron ore before a possible price increase next month.

Container shipping is also showing faint signs of revival,but remains deeply depressed. And more empty tankers are showing up here.