Posted on 12/18/2008 2:01:08 AM PST by TigerLikesRooster
Dead wait
By Robert Wright
Published: December 17 2008 20:01 | Last updated: December 17 2008 20:01
Ships at anchor off Singapore: consumers in the west are buying far fewer manufactured goods
Anyone looking out from the restaurants and offices of Singapore’s tree-fringed south shore in the last few years has had a grandstand view of globalisation in action. Scores of ships would be either anchored offshore or passing by in one of the world’s busiest shipping lanes. Among the commonest sights have been huge container ships either taking vast quantities of manufactured goods from Asia towards Europe or, largely empty, heading back for more.
The view has started to change in the last few months. As well as the gainfully employed ships, there are now substantial numbers laid up, waiting for the end of a sudden and deep collapse in their earning power.
First came the dry bulk carriers that shift iron ore and coal around the world. Now, container ships are beginning to appear among them, mothballed by operators who have seen demand growth either slow down or go into reverse. Consumers in western Europe and North America are buying far fewer of the toys, computers, furniture and other manufactured goods that go inside the stackable steel boxes they carry.
“It seems to be going faster and deeper than expected,” Michel Deleuran, a senior executive in Denmark’s Maersk Line, the sector’s biggest operator, says of the downturn.
Container trade between Asia and Europe, which rose 16.5 per cent last year, is shrinking for the first time in history, according to some estimates. The spot rate for moving a 40-foot container from Hong Kong to Rotterdam plummeted from about $2,700 (£1,750, €1,900) in autumn last year to as low as $200 now.
(Excerpt) Read more at ft.com ...
Ping!
There...fixed.
Boy. NAFTA and the WTO sure worked great. The giant sucking sound for the lst 15 years has finally worked its wonders. I never did figure the logic of it.
Last year Singapore to LA was $3600.
I think that was way above the usual and customary at at market rate.
We’ll see what it is this year.
This is easy to explain, instead of Americians loosing their job,the Chinese now loose theirs. So you see Nafta and Wto saved Americians the pain of loosing their job. See how that works. /s
Finally!!!!! Someone on this forum that at least has a basic working knowledge of global trade and the economic effects on the citizens of this country.....and you managed to sum it up in 2 sentences!!!!!! ... will you be my friend? :)
Protectionists cannot, it's simply not in their nature. They argue up-and-down for restrictions on trade, and when it finally happens (due to an economic slowdown or whatever), they find something else to blame for they wanted in the first place.
Hmmm. DryShips Inc. (DRYS) has quadrupled off its November 21st bottom of $3.04. It could re-test if the entire market does, but that might be sometime in the first quarter of next year...
>>>14 times drop. Unless they were making a killing last year, I can’t see how $200 even pays for the gas.<<<<<<
Last time I checked several years ago it was also $2,700 Singapore to Baltimore (I know it’s been much higher since then).
But $200? That seems ridiculous.
“14 times drop. Unless they were making a killing last year, I can’t see how $200 even pays for the gas. Something is missing..”
It’s the shipping bubble. The economy pays what the market will bear. We have had a great lesson in how the world works in the past two or three years. The ageless wisdom of the insightful idiom, “If it seems too good to be true, It is”, rings ever so true.
DRYS has > 40% of its ships contracted out for the next three years, and at its low it was trading at a P/E of 0.25, so that low appeared to be an extreme of pessimism.
All this is contributing to the fall in the price of oil. Fewer gadgets = less shipping. Won’t algore be happy? Less carbon being burned.
How’s the business going from you perspective?
you = your
sigh...
Yep.
The fourth quarter is traditionally our slowest, with EPC budgets running out for the year.
This year's fourth quarter has been our best on full container loads.. go figure.
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