The following two web sites track ships around the world:

https://www.vesselfinder.com/

http://www.myshiptracking.com/

We should be seeing ships all over the globe, moving. As of the time I write this, I only see one ship out at sea. What I heard today is, it has been this way for two weeks. Goods are not being shipped.

Jeanette Isabelle

The Baltic Dry Index is at record lows. Investment Tool's chart goes back far enough that the current low is evident. Just my layman opinion, but the top chart on that page says a lot about the state of International trade -- tanking.

I heard three theories on why this is happening. Regardless of the reason, if you're not stocked up, what are you waiting for? Store shelves will be bare.

Jeanette Isabelle

Looking at your first link (vesselfinder.com), if you read the "about" link at the bottom, it says it is using AIS terrestrial stations to track ships. AIS (Automatic Identification System) uses VHF to transmit vessel location, identification, etc. If the website is only using terrestrial stations, it won't show any ships beyond VHF range from shore. For big ships with high antennas that might be only 100 miles or so from shore. If you look at the map, it only shows vessels near shore and near various islands. Zoom in and you will see lots of ships at sea coming and going near big ports.

A more recent development called "S-AIS" uses satellites to receive data from ships, but it doesn't appear that this website is using that. And I don't know if all vessels are using S-AIS either.

Bottom line is that the absence of vessels at sea is due to an absence of data, not an absence of ships at sea. Trade may be declining somewhat, perhaps related to China's economic downturn, but I'm not too worried that "Store shelves will be bare."

AKSAR's post makes sense. I looked at some of the ships, and they were moving. If we're faced with some sort of global economic collapse that we haven't somehow heard of, the ships would be immobile.

But maybe I should still stock up on those iPhones in case China stops shipping them.

Plenty of ships moving: http://www.marinetraffic.com/en/ais/home/centerx:-69/centery:39/zoom:2

Russ is correct. The Baltic Dry Index is at a record low.

http://shipandbunker.com/news/world/584482-baltic-dry-index-doesnt-fall-for-first-time-in-2016

http://splash247.com/baltic-dry-indexs-three-week-rout-comes-to-a-halt/

http://gcaptain.com/2016/01/25/baltic-dry-index-ends-losing-streak/#.VqefhvEdf8c

http://uk.reuters.com/article/baltic-index-idUKL3N1594QA

http://www.afr.com/business/transport/sh...20160124-gmd2iu

These are just five of web pages on the Baltic Dry Index. The following web pages repeat some of what the previous link said regarding "zombie ships."

http://www.telegraph.co.uk/finance/12108...ing-memory.html

http://gcaptain.com/2016/01/21/no-calmer...t/#.Vqek1PEdf8c

As for not hearing anything about it, it is in the foreign press. I mentioned in another thread I read the foreign press.

http://www.newindianexpress.com/states/t...icle3225440.ece

Jeanette Isabelle

Be careful of this link. It seemed to have tried to make me download malware.

I had time to read the article though. Its sources of information are random blogs.

I'm puzzled by the contradiction -- the article says the cargo ships are dead in the water, but the first links that Jeanette provides at the start of the thread showed, when I spot checked, individual cargo ships moving. I could see their speed and direction. If they're out of business, why would they be moving?

I don't think shipping has issues at the moment. With the low oil prices the shipping company's are really investing in a lot of things to improve there operations.

(on the other hand, the oil prices causes budget cuts in the oil industy)

No one said anyone is out of business, quite the opposite. Lenders are not wanting or not ready to declare a loss.

In the original post I did say I saw one ship moving at the time I wrote it, meaning not all ships are anchored. Two of links I provided are of "zombie ships." I'm not saying all ships at sea are "zombie ships" but they are out there.

Jeanette Isabelle

Yes, the price of oil is low; the freight rates have taken a dive and it costs money to operate a ship.

Where are you hearing or reading shipping companies are investing to improve operations?

Jeanette Isabelle

I'm employed in the training industry. Traditionally aimed at the fire, medical, police and emergency management sector. But we also doing industry and now are targeting the maritime industry. Maritime is apparently booming in investment, so the boss wants a piece of the pie. I’m not directly involved, but that’s what the maritime people at our place are saying.

As the links I provided indicate, this is a quick turn around as in weeks. How current is the information you are getting?

Jeanette Isabelle

There seems to be some confusion about what the Baltic Dry Index is, and what it means.

It is NOT a measure of how much stuff is being shipped. Rather it is a measure of the price of shipping stuff. Price, as always, is determined by supply and demand. "Supply" in this case is the number of ships available to move stuff. "Demand" is the amount of stuff people want to move. At present, the fleet of dry cargo ships is somewhat overbuilt (particularly by Chinese shipyards). And demand is somewhat down due to the slowing of the growth of the economy in China and other countries. A modest oversupply of ships coupled with a modest economic slowdown leads to a big drop in the index. Because ships are long term investments, it takes awhile before enough of the older ships in the world fleet are retired, so the supply side remains too big for a fairly long time, and hence the index stays low for a relatively long time.

Forbes has a nice article that explains this: Explaining The Baltic Dry Index Plunge: It's Supply, Not Demand.

It is always sensible to keep a good reserve of emergency food, water, fuel, and other essentials. If possible also keep a reasonable stock of useful though not vital goods such as liquor, tobacco, confectionery and non perishable consumer goods in general.

However in this particular case I suspect that ships are idling at sea because the goods that they carry are not much in demand. If fewer consumer goods are being sold, then retailers will delay replenishment and wholesale suppliers will be left with excess stock. Importers may then lack either the money, or the physical storage space to accept more imports.

With the present low shipping rates it may make economic sense for ships to wait at sea until either another buyer for the cargo can be found, or until the original buyer belatedly has the money or the warehouse space to take the goods.

Any disruption to world trade is concerning, but in this case I suspect over supply or a slow down in demand, rather than shortages.
Still a good idea to stock up though, just in case.

Well said.


In a page I linked earlier says:


http://www.afr.com/business/transport/sh...20160124-gmd2iu


http://www.telegraph.co.uk/finance/12108...ing-memory.html

Sixty percent of the cost of a new ship is owed to the banks for ships that may not be worth its weight in steel (if we factor in the cost to scrap the ships). Therefore, shipping companies have to operate at a loss just to contribute to the interest.

Low freight rates are not great for us if the system we depend on can't sustain its self.

Jeanette Isabelle

As the links I provided indicate, that is not the reason ships are anchored. To summarize, ships that are moving are operating at a loss just to contribute to the interest, not the capital, of said ships.

Jeanette Isabelle

Not sure why you are so worried? The weakest shipping companies will go bankrupt, and their assets will be sold. The oldest and least efficient ships will be sold for scrap. The newer and most desirable ships will be sold at a loss. The creditors will take a loss.

Meanwhile, the shipping companies with the strongest balance sheets will ride it out and survive. The strongest of them will pick up some of those discounted ships at a very good price, and use them to replace their older less efficient ships. When enough of the weaker companies go under, and enough of the older ships are scraped, the system will rebalance and rates will go up again. The surviving companies will be profitable again.

That's Econ 101. Welcome to life in the business world.

I see some of that happening some time in the future (I explained why we may not be seeing ships scrapped). What are we going to do in the meantime?

What it will mean for us when banks take a loss is only speculation at this time.

Jeanette Isabelle

We all have the essentials, but it's hard for me to figure out what to stock up in case of a global shipping slowdown. The only thing I can think of is electronics. But I'm just one person. How many iPhones do I need?

Vehicles! You can never have too many Mercedes or BMW's.

How many people do you want to play Exploding Kittens with? A wifi-enabled iPod Touch will also work for this, by the way.

Keep in mind that cars and electronics are not the only things being shipped. Fruit, coffee, spices, at least some medications and other essentials are shipped.

Jeanette Isabelle

Oh no! not coffee! Take anything, but let me have my coffee...

Don't worry, hikermor, there's airmail. You get your fix faster.

Let's make sure we are clear about this. Global shipping volume has not slowed down. The rate of increase in global shipping volume has slowed. This, along with an oversupply of ships, has led to a drop in the cost of shipping. The state of the shipping industry looks like a classic bubble to me.

Reuters Note that trade volume is still growing, it just isn't growing as fast as expected.

The slowing of growth in shipping may or may not be a bad thing in the long run, but I expect that Bingley will continue to get his electronics, Jeanette Isablle will get her fruits, spices and meds, and Hikermor (and me) will continue to get our coffee.

Everyone just take a deep breath and relax. The sky is not falling.

ASKAR, I just want to thank you for your excellent information and crystal clear explanations in this thread. Good job, man!
-Blast

+1 very enlightening indeed!