At current prices, shippers can’t cover their costs. Many are breaching bank covenants and a few have been forced into administration. In a move of sheer desperation, the notoriously secretive London shipping community convened on Wednesday to try to cut their losses. The meeting focused on reducing the counterparty risk involved in the shipping business’ complex chain of long-term agreements, which stretch from shipowners through traders to the operators, known as charters. […] The hard times could get still worse if banks start calling in loans. That would flood the already glutted market with a wave of foreclosed ships. The only remedy is the breaking yard….
A key safety valve for regulating the world’s supply of ships has stopped working in recent weeks, after credit and other problems brought the sale of ships for scrapping to a near halt.
The problems are centred in India, the heart of the world ship-demolition industry, and have prevented owners from selling the thousands of ageing vessels worldwide that are no longer worth keeping afloat, following a collapse in the rates earned by many vessel types.
[…]
Some Indian banks also appear to have refused to honour letters of credit over fears about the value of the ships pledged as security. Vessels were fetching record prices of up to $740 a tonne as recently as September, while the present market price has collapsed to $300.
The ships hit the fan, I guess.
Wonder if this is why the Indian Navy is slowly being deployed to the Somali Coast. In other news –
the pirates have in fact also hit an Iranian ship, after which several pirates became severely ill with hair loss and apparent radiation poisoning. Oh and there was a Ukrainian ship carrying T72 tanks bound for Sudan that also got hit.
So (a) Somali pirates are very P.C., hitting everyone equally (including own-goals against their Islamic brethren Iran, and Saudi Arabia), and (b) this is why they are about to get taken out in a big way. As in no courts, arrests, snivelling Western news anchors, etc. Just several rounds of heavy calibre Naval gunfire, and maybe chemical warhead missile strikes on their villages. Courtesy of some of the planet’s more strategically mature military players….
Glad to see others stepping forward. This should not always be the job of “the West” who have been tarred and feathered repeatedly for any kind of action. Neo Imperialism, Neo Colonialism, Neo Racism yada yada.
ood for the INdians, its their backyard nice to see them willing to protect their pool. Now if only the Euro’s were as stiff spined in Yugoslavia….oh lets get the Americans to deal with it…..
Let sothers spend money, resources, and lives in areas that matter to them. Quite honestly, we have other issues to deal with.
I’m just waiting for some limp wristed leftie to blame the pirates on George Bush. Or global warming for that matter.
Follow the trail of extended credit folks.
How many of these businesses “in trouble” now has expanded on credit or operate debt-leveraged to business loans?
How long has this debt-leveraged enterprise trend been in vogue? last 5-7 years seem about right?
Who was the major proponent for using extended central bank credit to expand domestic and global commerce and expand the enterprises that engage in same? IMF??
Now who is pushing for a global credit (currency?) consolidation to solve the problems caused by over extended nervous corporate investment banks calling in loans? IMF?
Just sayin’ – IF I was a calculating omnipotent globalist finance consortium to which many international central banks rely upon for forecasting, trend validation and bankruptcy insurance, and I wanted to consolidate more power and control in my operation, I would encourage those who trust me to freely spend the credit I extend and get them comfortable with over extended credit economics, then use a larger than normal retraction cycle from an overheated credit market in the US economy to spread panic and to collapse global markets by calling in debt. just sayin’
The outcome of this “panic” G20 meeting sounds suspiciously like a Bretton Woods II but with the IMF making overtones about going to a differnet currency other than the US greenback as the stabilized international trade currency/credit system.
I now see inside reports saying US economic power will wane by 2020. With the US dollar defrocked as the international “pegged” trade currency, this seems probable.
how come when other countries ritly beat up the bad guys they get properly lauded and when Americans do it were called bullies?
Is this only from the cancer within?
Or is this really a problem.
btw, I recall from history “Q ships” worked surprisingly well.
Another job opportunity for saskatchewan: Prairie Schooner Scrapping & Salvage.
Why not buy some old tramp steamers or freighters and make them into condos? Sail them up the Mississippi river to NOLA and keep the Katrina folks happy.
Q ships. I love that concept. Quoth the pirate, “Imagine my surprise when the container ship turned out to have me out-gunned.” Makes for really short battles.
Too bad the idea is to get the pirates to steal your boat for the insurance. Q ship is kinda backwards to the whole purpose.
Unless they are not allowed to be armed, I have a hard time understanding how a large ship like an oil tanker could be taken by pirates in the first place. A dozen or so guys with AKs and RPGs should have little trouble fending off pirates. Mounted chain guns would turn any attempted boarding into a turkey shoot.
There is no way to sneak up on a large ship like a tanker. They all have radar that can spot a row boat from miles off. During daylight, you can see someone approaching from roughly the same distance. At night, high powered spot lights could light up hundreds of yards of water in all directions.
For starters, large circumference rail capping to prevent grappling hooks from actually getting a grip on anything.
Second; mandatory security squads, mercenaries, whatever you want to call them, on all shipping passing through the area. Way cheaper than a million or more in ransom.
My personal favorite; aggressive action against the home bases of the pirates. No pirates=no problem…probably the cheapest solution in the long run.
How about boarding their ships with an in-house swat team, preceeded by little deck gun attack? Oh, and while we’re at it, we could splash their attack boats.
Well, because the vast majority of the shipowners are cheap b******s flying flags of sweatship convenience. But, sorry, these guys don’t work for subsistence wages, so no can do.
Somebody else has to protect them. A quality tactical team with small arms, 50 calibre machine guns and attack boats would cream these pirates, particulary the ones that try to speed away.
OTOH, a destroyer blowing them out of the water is not a bad idea. I think the pirates know this and will likely withdraw and regroup in the months at least it will take to organize a proper force against them.
There is no way to sneak up on a large ship like a tanker. They all have radar that can spot a row boat from miles off.
IF it is working, IF the guy manning it actually knows how to use it, AND if anyone is paying attention!
This ships are often crewed by semi-literate south asians who are paid the princely sum of @ $1200/month for their trouble. A large cargo ship might have A functioning radio, A radar and A GPS and pretty much bugger all else. Even if the sparse nav aids are working, these guys often put the ship on autopilot as soon as it gets away from the shore and go to sleep or whatever else they do to pass the time. You’d get a sense of the absence of seamanship or attentiveness if you listened to a VHF tuned to the marine traffic frequencies on either coast. You’ll hear some pretty scary stuff, particularly if you’re a fisherman and you’re out at night with your gear out and can’t move very fast while these buggers are churning past in the dark and the fog.
reminds me of the ship Matilda Briggs…and the giant rat of Sumatra…..a story for which the world finally appears to be ready….
“Wonder if this is why the Indian Navy is slowly being deployed to the Somali Coast.”
Well, it is in the Indian Navy’s declared Zone of Interest (Straits of Mallaca in the east to the Persian Gulf in the west). Part of the credit has to go to the wife of an Indian merchant marine captain who started an all out campaign that forced the government to really get tough. Nothing like good old democratic protests and campaigns to force the governments arm.
I m surprised those Saudi shams aren’t sending their hordes of state of the art aircraft that they have bought from the US to tackle this problem. What is a speedboat against a supersonic jet? Unless the Indians deploy their aircraft carrier, which is unlikely (too expensive), the pirates are going to have a pretty easy time. I expect the Indians will send another couple of frigates to the region.
Just some quick comments about some of the other comments. Merchant ships can technically carry arms, but companies are unwilling to arm them. Part of the reason is a genuine fear of mutiny, which happens very often. Most of the ships crews are poorly paid recruits from third world countries. Giving them access to arms is rarely a good idea, since they could, in theory, hijack the ship themselves. That is, of course, an extreme, but there are crew-officer disputes on board these ships on many many occassions, often over unpaid wages etc.
Secondly, the crews are skeletal and essential. They all have specific vital duties that cannot be dropped to man a gun. Unlike combat ships, they don’t carry a gun crew. They can, but they are unlikely to. And of course theres the execs who are keen on keeping operating costs down. Put guns on a ship and insurance goes up (not down). Its cheaper to risk the lives of 20 odd crew members, than it is to pay insurance for an entire fleet.
“At night, high powered spot lights could light up hundreds of yards of water in all directions.”
This suggestion got a laugh out of me. No navy or merchant ship would ever light itself up in ‘dangerous’ waters. Its akin to painting a bullseye on yourself. You are far safer, and often better off, maintaining an all out blackout, so that nobody can see you.
“For starters, large circumference rail capping to prevent grappling hooks from actually getting a grip on anything.”
Most, if not all, ships have ladders (in the form of those bracket protrusions) running along various parts of their hull – for repair work etc. In theory this would be a good idea. In reality, ships are built with these access points – in some cases to escape the ship (ironic, eh).
“Second; mandatory security squads, mercenaries, whatever you want to call them, on all shipping passing through the area”
Try getting insured with a bunch of armed mercenaries on your ship. These merchant ships handle cargoes worth in the millions. Whats to stop a bunch of mercenaries from taking over? Mandatory? No shipping company will accept anything other than soldiers, only because then they can force the government to pay up if anything goes wrong.
“This ships are often crewed by semi-literate south asians who are paid the princely sum of @ $1200/month for their trouble.”
Yep, but the officer corp is usually hugely professional, and much better paid. Its true the guy turning oiling the engine is semi-literate, but the guys in charge are not. Put it on autopilot and let it coast? Thats just bullshit, plain and simple.
xly it is considered very do-able….the ‘global hawk’ takes off and lands while staying aloft 30 or more hours(and killing bad guys) without an onboard pilot.
the same could be done and is considerd being done today(on dedicated track of course) on railroads.
yup…with dedicated sea lanes some guy sitting at a desk at LLoyds in London maneuvering a joystick could do it all….
@bob c:
“Unless they are not allowed to be armed”
Right you are! There’s the rub. Commercial ships are not allowed to be armed. They’re prohibited from most western ports if they’re armed.
Good new for Somalia. They can buy up new Pirate vessels on the cheap for a new fleet.
The ships hit the fan, I guess.
🙂
how come when other countries ritly beat up the bad guys they get properly lauded and when Americans do it were called bullies?
Is this only from the cancer within?
Yup. Socialism, everyone needs to be a victim or they are bad. When everyone is on welfare then things will run smoothly.
How many of these commenters have actually sailed to sea, Billy? Any of you?
Take a good look at any of the crew members of a “foreign-flagged” ship. Trust ’em with your daughter? Last dollar, or your life?
More than likely some of the “pirates” were already on the ship.