Revealed: The ghost fleet of the
biggest and most secretive gathering of ships in maritime
history lies at anchor east of Singapore. Never before
photographed, it is bigger than the U.S. and British
navies combined but has no crew, no cargo and no
destination - and is why your Christmas
stocking may be on the light side this year
The 'ghost fleet' near Singapore.
The world's ship owners and government economists would
prefer you not to see this symbol of the depths of the
plague still crippling the world's economies
The tropical waters that lap
the jungle shores of southern Malaysia could not be
described as a paradisical shimmering turquoise. They are
more of a dark, soupy green. They also carry a suspicious
smell. Not that this is of any concern to the lone Indian
face that has just peeped anxiously down at me from the
rusting deck of a towering container ship; he is more
disturbed by the fact that I may be a pirate, which,
right now, on top of everything else, is the last thing
His appearance, in a peaked cap and uniform, seems
rather odd; an officer without a crew. But there is
something slightly odder about the vast distance between
my jolly boat and his lofty position, which I can't
immediately put my finger on.
Then I have it - his 750ft-long merchant vessel is
standing absurdly high in the water. The low waves don't
even bother the lowest mark on its Plimsoll line. It's
the same with all the ships parked here, and there are a
lot of them. Close to 500. An armada of freighters with
no cargo, no crew, and without a destination between them.
Simon Parry among the ships in
My ramshackle wooden fishing boat has floated
perilously close to this giant sheet of steel. But the
face is clearly more scared of me than I am of him. He
shoos me away and scurries back into the vastness of his
ship. His footsteps leave an echo behind them.
Navigating a precarious course around the hull of this
Panama-registered hulk, I reach its bow and notice
something else extraordinary. It is tied side by side to
a container ship of almost the same size. The mighty
sister ship sits empty, high in the water again, with
apparently only the sailor and a few lengths of rope for
Nearby, as we meander in searing midday heat and
dripping humidity between the hulls of the silent armada,
a young European officer peers at us from the bridge
of an oil tanker owned by the world's biggest container
shipping line, Maersk. We circle and ask to go on board,
but are waved away by two Indian crewmen who appear to be
the only other people on the ship.
'They are telling us to go away,' the boat driver
explains. 'No one is supposed to be here. They are very
frightened of pirates.'
Here, on a sleepy stretch of shoreline at the far end
of Asia, is surely the biggest and most secretive
gathering of ships in maritime history. Their numbers are
equivalent to the entire British and American navies
combined; their tonnage is far greater. Container ships,
bulk carriers, oil tankers - all should be steaming fully
laden between China, Britain, Europe and the US, stocking
camera shops, PC Worlds and Argos depots ahead of the
retail pandemonium of 2009. But their water has been
They are a powerful and tangible representation of the
hurricanes that have been wrought by the global economic
crisis; an iron curtain drawn along the coastline of the
southern edge of Malaysia's rural Johor state, 50 miles
east of Singapore harbour.
'We don't understand why they are
here. There are so many ships but no one seems to be on
board,' said local fisherman Ah Wat
It is so far off the beaten track that nobody
ever really comes close, which is why these ships are
here. The world's ship owners and government economists
would prefer you not to see this symbol of the depths of
the plague still crippling the world's economies.
So they have been quietly retired to this equatorial
backwater, to be maintained only by a handful of bored
sailors. The skeleton crews are left alone to fend off
the ever-present threats of piracy and collisions in the
congested waters as the hulls gather rust and seaweed at
what should be their busiest time of year.
Local fisherman Ah Wat, 42, who for more than 20 years
has made a living fishing for prawns from his home in
Sungai Rengit, says: 'Before, there was nothing out there
- just sea. Then the big ships just suddenly came one day,
and every day there are more of them.
'Some of them stay for a few weeks and then go away.
But most of them just stay. You used to look Christmas
from here straight over to Indonesia and see nothing but
a few passing boats. Now you can no longer see the
The size of the idle fleet becomes more palpable when
the ships' lights are switched on after sunset. From the
small fishing villages that dot the coastline, a
seemingly endless blaze of light stretches from one end
of the horizon to another. Standing in the darkness among
the palm trees and bamboo huts, as calls to prayer ring
out from mosques further inland, is a surreal and
strangely disorientating experience. It makes you feel as
if you are adrift on a dark sea, staring at a city of
Ah Wat says: 'We don't understand why they are here.
There are so many ships but no one seems to be on board.
When we sail past them in our fishing boats we never see
anyone. They are like real ghost ships and some people
are scared of them. They believe they may bring a curse
with them and that there may be bad spirits on the ships.'
Two container ships tied together
in southern Malaysia, waiting for the next charter
As daylight creeps across the waters, flags of
convenience from destinations such as Panama and the
Bahamas become visible. In reality, though, these vessels
belong to some of the world's biggest Western shipping
companies. And the sickness that has ravaged them began
far away - in London, where the industry's heart beats,
and where the plummeting profits and hugely reduced cargo
prices are most keenly felt.
The Aframax-class oil tanker is the camel of the world's
high seas. By definition, it is smaller than 132,000 tons
deadweight and with a breadth above 106ft. It is used in
the basins of the Black Sea, the North Sea, the Caribbean
Sea, the China Sea and the Mediterranean - or anywhere
where non-OPEC exporting countries have harbours and
canals too small to accommodate very large crude carriers
(VLCC) or ultra-large crude carriers (ULCCs). The term is
based on the Average Freight Rate Assessment (AFRA)
tanker rate system and is an industry standard.
A couple of years ago these ships would be steaming
back and forth. Now 12 per cent are doing nothing
You may wish to know this because, if ever you had an
irrational desire to charter one, now would be the time.
This time last year, an Aframax tanker capable of
carrying 80,000 tons of cargo would cost £31,000 a day ($50,000).
Now it is about £3,400 ($5,500).
This is why the chilliest financial winds anywhere in
the City of London are to be found blowing through its
400-plus shipping brokers.
Between them, they manage about half of the world's
chartering business. The bonuses are long gone. The last
to feel the tail of the economic whiplash, they - and
their insurers and lawyers - await a wave of redundancies
and business failures in the next six months. Commerce is
contracting, fleets rust away - yet new ship-builds
ordered years ago are still coming on stream.
World shipping is tracked by
satellite service Vesseltracker
Just 12 months ago these financiers and brokers were
enjoying fat bonuses as they traded cargo space. But
nobody wants the space any more, and those that still
need to ship goods across the world are demanding vast
reductions in price.
Do not tell these men and women about green shoots of
recovery. As Briton Tim Huxley, one of Asia's leading
ship brokers, says, if the world is really pulling itself
out of recession, then all these idle ships should be
back on the move.
'This is the time of year when everyone is doing all
the Christmas stuff,' he points out.
'A couple of years ago those ships would have been
steaming back and forth, going at full speed. But now you've
got something like 12 per cent of the world's container
ships doing nothing.'
Aframaxes are oil bearers. But the slump is industry-wide.
The cost of sending a 40ft steel container of merchandise
from China to the UK has fallen from £850 plus fuel
charges last year to £180 this year. The cost of
chartering an entire bulk freighter suitable for carrying
raw materials has plunged even further, from close to £185,000
($300,000) last summer to an incredible £6,100 ($10,000)
earlier this year.
Business for bulk carriers has picked up slightly in
recent months, largely because of China's rediscovered
appetite for raw materials such as iron ore, says Huxley.
But this is a small part of international trade, and the
prospects for the container ships remain bleak.
Some experts believe the ratio of container ships
sitting idle could rise to 25 per cent within two years
in an extraordinary downturn that shipping giant Maersk
has called a 'crisis of historic dimensions'. Last month
the company reported its first half-year loss in its 105-year
Martin Stopford, managing director of Clarksons,
London's biggest ship broker, says 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
eight per cent. If it costs £7,000 a day to put the ship
to sea and if you only get £6,000 a day, than you have
got a decision to make.
'Yet at the same time, the supply of container ships
is growing. This year, supply could be up by around 12
per cent and demand is down by eight per cent. Twenty per
cent spare is a lot of spare of anything - and it's come
out of nowhere.'
These empty ships should be carrying Christmas over to
the West. All retailers will have already ordered their
stock for the festive season long ago. With more than 92
per cent of all goods coming into the UK by sea, much of
it should be on its way here if it is going to make it to
the shelves before Christmas.
Lights from the fleet of ships
illuminate the night-time horizon
But retailers are running on very low stock levels,
not only because they expect consumer spending to be down,
but also because they simply do not have the same levels
of credit that they had in the past and so are unable to
keep big stockpiles.
Stopford explains: 'Globalisation and shipping go hand
in hand. Worldwide, we ship about 8.2 billion tons of
cargo a year. That's more than one ton per person and
probably two to three tons for richer people like us in
the West. If the total goes down by five per cent or so,
that's a lot of cargo that isn't moving.'
The knock-on effect of so many ships sitting idle
rather than moving consumer goods between Asia and Europe
could become apparent in Britain in the months ahead.
'We will find out at Christmas whether there are
enough PlayStations in the shops or not. There will
certainly be fewer goods coming in to Britain during the
run-up to Christmas.'
Three thousand miles north-east of the ghost fleet of
Johor, the shipbuilding capital of the world rocks to an
unpunctuated chorus of hammer-guns blasting rivets the
size of dustbin lids into shining steel panels that are
then lowered onto the decks of massive new vessels.
As the shipping industry teeters on the brink of
collapse, the activity at boatyards like Mokpo and Ulsan
in South Korea all looks like a sick joke. But the
workers in these bustling shipyards, who teem around
giant tankers and mega-vessels the length of several
football pitches and capable of carrying 10,000 or more
containers each, have no choice; they are trapped in a
cruel time warp.
There have hardly been any new orders. In 2011 the
shipyards will simply run out of ships to build
A decade ago, South Korean President Kim Dae-jung (who
died last month) issued a decree to his industrial
captains: he wished to make his nation the market leader
in shipbuilding. He knew the market intimately. Before
entering politics, he studied economics and worked for a
Japanese-owned freight-shipping business. Within a few
years he was heading his own business, starting out with
a fleet of nine ships.
Thus, by 2004, Kim Dae-jung's presidential vision was
made real. His country's low-cost yards were winning 40
per cent of world orders, with Japan second with 24 per
cent and China way behind on 14 per cent.
But shipbuilding is a horrendously hard market to plan.
There is a three-year lag between the placing of an order
and the delivery of a ship. With contracts signed, down-payments
made and work under way, stopping work on a new ship is
the economic equivalent of trying to change direction in
an ocean liner travelling at full speed towards an
Thus the labours of today's Korean shipbuilders merely
represent the completion of contracts ordered in the fat
years of 2006 and 2007. Those ships will now sail out
into a global economy that no longer wants them.
Maersk announced last week that it was renegotiating
terms and prices with Asian shipyards for 39 ordered
tankers and gas carriers. One of the company's executives,
Kristian Morch, said the shipping industry was in