Fact Checking the “Shipping Has Ground to a Halt” Meme

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Commerce Ground to a Halt?

Claims have surfaced that not a single transport ship in the North Atlantic is moving.

For example, "Superstation" claims that in a Historic First, hundreds of ships are said to all be anchored along coasts, with nothing moving.

ZeroHedge picked up the story in "Nothing Is Moving," Baltic Dry Crashes As Insiders Warn "Commerce Has Come To A Halt".

Countless others picked up the story from ZeroHedge who "confirmed" the story.

ZeroHedge said "We checked VesselFinder.com and it appears to show no ships in transit anywhere in the world. We aren’t experts on shipping, however, so if you have a better site or source to track this apparent phenomenon, please let us know. We also checked MarineTraffic.com, and it seemed to show the same thing. Not a ship in transit…"

The Real Shipping Story

Let's sort out reality from hype from Marine.Com.

Cargo Vessels and Tankers Anchored
ships anchored

Cargo Vessels and Tankers Underway
ships moving

Tankers Underway
tankers underway

As you can easily see, the numbers vary from chart to chart. Ships are moving.

The first thing I do when I see reports like "No Ships Moving" is look for mainstream news confirmation.

If no ships were moving, this would indeed be news and some reputable news site would have the story. The "no ships moving" story failed the "sniff test" from moment one.

Confirmation of economic stories is different than confirmation of political stories. Coverups of sex attacks in Germany and Sweden, and police killings in Chicago and other US cities highlights the difference.

Other Shipping Measures

Let's now investigate other indicators of slowing shipments Including the Baltic Dry Index and the Harper Petersen shipping Index.

Baltic Dry
Baltic dry
Source: Bloomberg

The Baltic Dry index measures shipping rates for dry goods.

The problem with Baltic Dry is the index is a function of excess shipping capacity and volumes shipped. It provides little information on shipping container sizes. Rates can sink because of increased shipping capacity (new ships) or sinking demand, or both.

Week after week I receive emails telling me the Baltic Dry Index is plunging. Stop the Emails! I know.

Harper Petersen provides much more information.

Harper Petersen Shipping Index - 10 Year History
1-11a

Harper Petersen Shipping Index - 2 Year History
1-11b

Harper Petersen Vessel Size Rates - 2 Year History
1-11d

TEU

TEU stands for twenty-foot-equivalent unit. It's an imprecise term because lengths have a 20-foot long (6.1 meters) standard but heights vary. Heights range from 2 feet three inches to 9 foot six inches. The most common heights are 8 feet 6 inches (2.6 m) and 9 feet 6 inches (2.9 m).

TEU

Myth vs. Reality

Contrary to popular myth, shipping has not ground to a halt. However, shipping volumes and shipping rates have both plunged. 2015 was a disaster by any measure.

There's no need to exaggerate. Reality is bad enough.

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About Michael Shedlock

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