Empty Containers At Port Not A Healthy Indicator!

Busan, South Korea.

Empty boxes pile up at Busan port

• SEOUL: South Korea's biggest port is running out of room to store shipping containers, said Park Jung Ho, an official at one of Busan's nine operators. The bigger concern is that the boxes are almost all empty.
  
  Container trade at Busan, the world's fifth-largest port, has fallen about 40 per cent in recent months, said Park, at Busan International Terminal Co. Even by stacking boxes five deep and leasing a nearby lot, he barely has room for the 31,700 containers that have piled up on his wharves.
  
  "We are spending half of what we earn from our main business for storage space," said Park, who is responsible for placement of equipment and containers for the company.
  
  Empty containers, idled dockworkers and laid-up vessels have become a hallmark of ports from Singapore to Rotterdam that six months ago were straining to meet the flow of electronics, toys, cars and equipment. For Busan, surrounded by the world's five biggest shipyards, the outlook is even bleaker after the glut of vessels caused a record decline in global orders for new ships in January.
  
  "I've never experienced anything like this before," said Ryoo Chi Ho, manager at a shipping company in the port. "It's far worse than what we went through during the 1997-98 Asian crisis, since the biggest consuming nations were still doing fine then. Now, everyone's hit."
  
  Singapore, the world's biggest container port, handled 1.97 million 20-foot containers in January, 20 per cent less than a year earlier. In Shanghai, the second-largest, traffic was down 19 per cent, while Hong Kong, the No. 3, suffered a 23 per cent drop, according to the websites of the port authorities. Busan handled 894,172 20-foot standard containers in January, the fewest since February 2005, the Busan Port Authority said on its website.
  
  "Things have really started to get bad - labourers spend their entire day waiting for a call from the docks that they have a job," said Kim Sang Cheul, a dockworker at Busan. "People spend all day staring at their phone as if staring at it can make it ring. You're lucky if you get a call."
  
  Kim said most workers' earnings have fallen by half and some were taking home less than 1 million won (US$672) a month.
  
  The dockworkers' troubles may herald a similar fate for employees at the shipyards in Gyeongsang Province, where Busan is located, including Hyundai Heavy Industries Co, Samsung Heavy Industries Co and Daewoo Shipbuilding & Marine Engineering Co.
  
  While global shipyards are still working through contracts placed since 2006, new orders have plummeted in the past four months. Hyundai Heavy, the world's largest shipbuilder, said on February 27 that orders dropped 54 per cent in January, mostly for equipment such as marine engines and oil rigs. The company said it has had no orders for new ships since September.
  
  "It's pretty tough now," said Lee Jong Chul, vice-president of STX Group, owner of the world's fifth-largest shipyard. "There have been requests for cancellations, but we persuaded owners to revise orders to a different vessel type or contract terms." - Bloomberg