Ships Tread Water, Waiting for Cargo

Cargo ships at anchor off the east coast of Singapore, marooned by slowing global trade

To go out in a small boat along Singapore’s 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 world’s busiest port, 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 — 100,000 to 300,000 tons each, with the larger ones weighing more than the entire 130-ship Spanish Armada — bob so empty that they 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 that shipping lines are becoming concerned about near misses and collisions in the Strait of Malacca, one of the world’s most congested waterways.

The root of the problem lies in an unusually steep slump in global trade, a problem confirmed by trade statistics announced on Tuesday.

China said that its exports nose-dived 22.6 percent in April from a year earlier, while the Philippines said that its exports in March were down 30.9 percent from a year earlier. The United States announced on Tuesday that its exports had declined 2.4 percent in March.

“The March 2009 trade data reiterates the current challenges in our global economy,” said Ron Kirk, the United States trade representative.

Even more worrisome, despite some positive signs, including a Wall Street rally and slower job losses in the United States, many in the shipping business say the current level of trade does not suggest a recovery soon.

“A lot of the orders for the retail season are being placed now, and compared to recent years, they are weak,” said Chris Woodward, the vice president for container services at Ryder System Inc.  the big logistics company.

Western consumers, still adjusting to losses in value of their stocks and homes, are in little mood to start spending again on non-essential imports, said Joshua Felman, the assistant director of the Asia and Pacific division of the International Monetary Fund. “For trade to pick up, demand has to pick up,” he said. “It’s very difficult to see that happening any time soon.”

The current downturn has so badly battered shipping that it makes the auto industry look healthy by comparison. For example, 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, according to Clarkson Plc, a London ship brokerage.

The rate has rebounded to nearly $25,000 in the last several weeks, and some bulk carriers have left Singapore. But ship owners say that this recovery may be short-lived because it mostly reflects a rush by Chinese steelmakers 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.

The cost of shipping a 40-foot steel container full of merchandise from southern China to northern Europe tumbled from $1,400 plus fuel charges a year ago to as little as $150 early this year, before rebounding to around $300, which is still below the cost of providing the service, said Neil Dekker, a container industry forecaster at Drewry Shipping Consultants in London.

Eight small companies in the industry have gone bankrupt in the past year and at least one of the major carriers is likely to fail this year, he said.

So many vessels have flocked to Singapore because it has few storms, excellent ship repair teams, cheap bunker fuel from its own refinery and, most important, proximity to Asian ports that might eventually have cargo to ship.

The gathering of so many freighters “is extraordinary,” said Christopher Palsson, a senior consultant at Lloyd’s Register-Fairplay Research, a London-based ship tracking service, “we have probably not witnessed anything like this since the early 1980s,” during the last big bust in the global shipping industry,

The world’s fleet has nearly doubled since the early 1980s, so the tonnage of vessels in and around Singapore’s waters this spring may be the highest ever, he said, cautioning that detailed worldwide ship tracking data has only been available for the last five years.

The Greeks and Persians had more vessels — around 1,000 triremes — at the Battle of Salamis in 480 B.C., Kublai Khan had more boats during his attempted invasion of Japan in 1281 and the Allies assembled more ships for the D-Day invasion in 1944. But those vessels were mostly tiny compared with the behemoths here.

These vessels total more than 41 million tons, according to Lloyd’s Register. That is nearly equal to the entire world’s merchant fleet at the end of World War I, and represents almost 4 percent of the world’s fleet today.

Investment trusts have poured billions of dollars over the past five years into buying ships and leasing them for a year at a time to shipping lines. As the leases expire and many of these vessels are returned, losses will be very heavy at these trusts and the mainly European banks that lent to them, said Stephen Fletcher, the commercial director of AXS Marine, a Paris-based consulting firm.

During previous shipping downturns, vessels anchored for months at a time in Norwegian fjords and other cold-weather locations with almost no one aboard. But stringent environmental regulations in practically every cold-weather country are forcing idle ships into warmer anchorages.

But that raises security concerns. Plants grow much faster on the undersides of vessels in warm water. “You end up with the hanging gardens of Babylon on the bottom and that affects your speed,” said Tim Huxley, the chief executive of Wah Kwong Maritime Transport, a Hong Kong-based shipping line.

One of the company’s freighters became so overgrown that it was barely able to outrun pirates off Somalia recently, Mr. Huxley said. The freighter escaped with 91 bullet holes in it.

Another of the company’s freighters was hit close to Singapore on Christmas Day by a chemical tanker that could not make a tight enough turn in a crowded anchorage; neither vessel was seriously damaged and there was no spill.

Captain M. Segar, the group director of Singapore’s port, said in a written reply to questions that many vessels are staying just outside the port’s limits, where they do not have to pay port fees.

Singapore has complained in the past two weeks to the home countries where ships are registered in the cases of 10 to 15 ships that have anchored in sea lanes in violation of international rules, Captain Segar said.

With fewer ships needed on the high seas, they are piling up at ports around the world.

There were 150 vessels in and around the Straits of Gibraltar on Monday, and 300 around Rotterdam, according to Lloyd’s Register.

But Singapore, close to Asian markets, has attracted far more.

“It is a sign of the times,” said Martin Stopford, the managing director of Clarkson Research Service in London, “that Asia is the place you want to hang around this time in case things turn around.”

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Full article and photo: http://www.nytimes.com/2009/05/13/business/global/13ship.html?hp

Escaped Bali Terror Suspect Is Caught in Malaysia

A man walks past a poster for a local newspaper in Singapore, featuring its front page story of the capture of Mas Selamat Kastari and his portrait, Friday.

A suspected terrorist leader who took off his pants, wriggled through a bathroom window and escaped from a high-security prison in Singapore last year has been caught in Malaysia, officials said Friday.

The fugitive, Mas Selamat bin Kastari, 47, was arrested early last month after Singapore had failed to capture him in a huge manhunt that in effect turned the country’s entire population into a posse of four million empty-handed informants.

The escape and the fruitless all-points pursuit were an embarrassing demonstration of fallibility in a nation that prides itself on efficiency, competence and rigorous law enforcement.

The government had described Mr. Mas Selamat as one of the most dangerous terrorists in the region, the local leader of the Islamist group Jemaah Islamiyah, which carried out the deadly bombings in Bali in 2002. It said he had planned to crash an airplane into Singapore’s airport and had coordinated a failed plot to bomb the U.S. Embassy and several other targets in Singapore.

“How he got from the detention center to Malaysia without anybody seeing him is extraordinary after the biggest and most expensive manhunt ever taken by Singapore,” said Sidney Jones, a leading terrorism expert who is senior adviser to the Asia Program of the International Crisis Group, an independent conflict monitoring agency.

Singaporean and Malaysian officials said he had been captured April 1 in southern Malaysia, across the Johor Strait from Singapore, in an area that is home to sympathizers of Jemaah Islamiyah.

“Mas Selamat is under our detention and is being investigated right now,” Hishamuddin Hussein, Malaysia’s home minister, said at a news conference in the capital, Kuala Lumpur. “We are becoming an expert on him, so hopefully this time he won’t escape us, and the Singaporean experience will help.”

In Singapore, Deputy Prime Minister Wong Kang Seng said at a news conference that Mr. Mas Selamat had swum across the Johor Strait — which varies in width from a half mile at its narrowest point to two miles — using an “improvised flotation device,” evading a frantic search that had begun as soon as his escape was discovered.

“The Malaysian authorities want to interview him, and we will let them do their job, and when they feel it’s time to send him back to us, we will be happy to receive him back,” Mr. Wong said.

After Mr. Mas Selamat’s escape on Feb. 27, 2008, the entire city-state was put on high alert, with the police setting up checkpoints, sealing borders and patrolling parks, marinas and shorelines. People were even urged to keep an eye on their bicycles to keep the fugitive from pedaling to freedom. Singapore was papered with wanted posters, and mug shots were sent to millions of cellphones.

An official investigation found that by letting the water run in the washroom and hanging a pair of pants over a ledge above the cubicle door, giving the impression he was still there, Mr. Mas Selamat gave himself 11 minutes to make his getaway, even as a guard waited just outside the door. The prisoner squeezed through the window, shinnied down a drainpipe onto a cushion of rolls of toilet paper, climbed a fence and disappeared.

The escape took place before one of Mr. Mas Selamat’s weekly visits with his wife and children. Prisoners were allowed to change into civilian clothes to meet their relatives, and Mr. Mas Selamat had asked for privacy in a bathroom as he changed.

The report said the escape had resulted from a confluence of factors. It held no single person responsible and said Mr. Mas Selamat had received no inside help.

“We consider him to be a key trigger in the terrorist network,” Mr. Wong said after he had delivered the Singapore government’s report on the escape to Parliament. “If he could leave Singapore and connect back with his friends, they could well launch a revenge attack.”

At first, Singapore was filled with false sightings of Mr. Mas Selamat, a round-faced man described on wanted posters as 5-foot-2 , weighing 139 pounds, and walking with a limp.

In the months since then, said Ms. Jones, “all there’s been is rumors.” Mr. Mas Selamat was reported to be at various locations in Indonesia, where he was born and where the Islamist movement is strong, she said, “and there were all sorts of rumors that he had been killed or had died in the forest while escaping — that’s the only way his complete disappearance could be explained.”

Now that Mr. Mas Selamat has reportedly been found in what is essentially the hometown of the regional terrorist movement, Ms. Jones said, “All the conspiracy theories, of which there were many, are put to rest.”

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Full article and photo: http://www.nytimes.com/2009/05/09/world/asia/09bali.html?ref=global-home