Off Singapore in the South China Sea, off the isles of Greece in the Aegean Sea and in dozens of major ports around the world, vast armadas lie inhabited by nothing more than the ghosts of the global recession.

The idled ships, known as lay-ups, have created silent fleets that can stretch across the horizon as far as the eye can see. They include oil tankers, bulk carriers and container ships sailing under flags of nations around the world.

While the talk on the docks has been about the drop in sales of recreational boats, and the glut on the used market, the big boys have problems of their own.

RICHARD JONES - SINOPIXSome observers say the fleet of idle commercial vessels is bigger than the largest navies.  Trade levels still far below normal, shipping analysts say, and the proportion of laid-up ships has reached levels not seen in decades. One analyst says the number of idled ships is even higher than the 5 percent seen in 1986 when U.S. Lines shut down its fleet following bankruptcy.

Some observers say they dwarf the planet's largest navies.

THE SLOWDOWN

With the slowdown in trade, shipping companies have been forced to leave thousands of vessels inactive, their plimsoll lines bobbing high above the water line, empty except for skeleton crews to fend off pirates, run equipment and avoid collisions. Witnesses have reported that the enormity of the fleet becomes most apparent when the ships' lights go on at night, as if the city of Atlantis had reemerged from the sea.

"Basically, you find places where there aren't any pirates and the like," said Christian Michael Storgaard, a spokesman for the Danish shipping company A.P. Moller-Maersk.

The decision to idle the ships is dictated by the market, and it's not taken lightly, because it of course costs the firms money. "When they're laying still, they're not trading,' Storgaard said.

The idled ships can be found anywhere, but shipping experts say the ghostly fleets are largest in Southeast Asia and other major shipping lanes. Maritime nations such as Greece, which owns a fifth of the world's fleet and owes 7 percent of its GDP to shipping, have been hit hardest. (Panama has the most merchant marine vessels flying under its flag, but the vast proportion – 5,394 of 6,323 – are foreign owned.)

Consider that the Baltic Dry Index, a market indicator analyzing shipping rates, recently crashed from a high of nearly 12,000 in May 2008 to 3,154.

RICHARD JONES-SINOPIXTwo container ships are tied together off the coast of Sunghai Rengit, southern Malaysia.BIGGER THAN THE NAVY

In response, shipping companies stockpile their vessels at sea. Some run engines and other systems while moored, known as warm layups. Cold layups occur when captains shut all systems down. Shipping companies prefer to anchor idled ships in cooler waters rather than warmer ones, because they are less hospitable to parasites and marine growth that can damage ships' hulls.

But they also moor them near active shipping hubs, which is why the largest fleet appears to be between Singapore and Hong Kong. Hundreds of laid-up vessels also ride the waves outside the Greek port of Pireaus.

"There's just been a huge decline in orders from the U.S. and other ports," said Helane Becker, a transportation analyst with Jesup & Lamont. "So shipping companies have just literally grounded their fleets. They have to store them some place, so they put them in the ocean."

The largest ghost fleets are in the South China Sea perhaps for the simple reason that that they are close to China, where a lot of goods for export are produced, Becker said. And the size of the idle fleet overall is enormous, considering that even in the 21st Century, only 20 percent of goods move by air, Becker said.

The London Daily Mail newspaper, which sent a reporter floating past a fleet 50 miles off Singapore, said the fleet might be larger than the U.S. and British navies combined.

GLOBAL RECESSION

The reason, of course, is that the global recession has brought trading to a virtual standstill. Chinese exports slowed, beginning in spring 2008, partly because of the weakening U.S. consumer market and partially because of industrial restrictions in China ahead of the Beijing Olympics. The credit freeze, which reached its climax with the collapse of Lehman in the U.S., also harmed trade as companies lacked the credit to finance shipments, cutting traffic between the Far East and Europe alone by 22 percent.

RICHARD JONES-SINOPIXThere are hundreds of container ships and oil tankers moored together in southern Malaysia, disrupting the livelihoods of many fisherman.Ships that once earned $50,000 a day may have trouble finding bidders at $9,000 a day. With a 10-year-old bulk carrier vessel that might have fetched $75 million last year now worth only $25 million or so, some companies find themselves selling vessels for scrap.

At the same time, shipbuilders turned out new vessels to fulfill orders entered before the slowdown, contributing further to the glut in shipping. In 2005, for example, demand for new vessels reached a peak as surplus levels declined to 0.7 percent of shipping, the Daily Mail reported. The oversupply has prompted some shipping companies to cancel shipyard orders for new vessels and even forfeit advance payments on existing orders, analysts say.

And the outlook for the future virtually ensures that these ghost fleets will be riding high on the water for some time.

The Alphaliner Weekly Newsletter recently reported that 16 of the top 22 liner shipping companies had lost $9 billion in the first three quarters of 2009, compared with an operating profit of $5.3 billion last year.

Drewry Shipping Consultants, a maritime consulting and publishing company, said in published reports that 2010 will see only marginal improvement, predicting that more companies will fail, more will merge, and some parts of the market may take years to recover. The firm estimated that as much as 8 to 10 percent of the entire global fleet may be in hot or cold lay-ups.

And even though the firm anticipates some slight improvement in trade flows next year, by perhaps 2.4 percent, shipping companies and boatbuilders must also factor in an estimated 8 percent increase in new shipping capacity. The firm also notes that any recovery must be set in the context of an enormous hit on the industry the past two years, including a 29 percent drop in shipping rates in 2009.