Today’s Business Day column of The New York Times features a front line article, Cargo Ships Treading Water off Singapore, Waiting for Work. I found this a rather sobering reminder for our community as to how much of supply has been taken from global supply chains.
The article provides a picture depicting 735 cargo ships sitting idle off the coast of Singapore, awaiting some form of cargo. It also points to 300 idle ships outside the port of Rotterdam and around 150 in the Straits of Gibraltar. So many ships have congregated around Singapore, that shipping lines are becoming rather concerned about the potential for collisions. This is sobering news when you consider that many of these vessels had facilitated a rather robust global movement of goods from manufacturing centers in Asia to North American and U.S. ports. The manufacturing engines of Asia has stalled, and we have a long way yet to go toward full recovery.
I suppose we can take a glass half-full view of this situation. As the article points out, shipping lines have no choice but to dramatically reduce their rates in order to just cover their fixed expenses. An example cited, the cost of shipping a 40 foot container from southern China to Europe has tumbled from $1400 to as little as $300 USD. If you are still importing goods from China, that is good news for your transportation budget. From a sustainability view, we also have up to 1000 ships limiting their greenhouse emissions.
On the other hand the news does not bode well for future capacity. The article notes that eight small shipping companies have gone bankrupt in the last year and one industry observer believes that at least one of the major carriers is likely to fail.
Let’s hope that recovery comes soon, for everyone’s sake.