High Shipping Costs Are Here to Stay, Says Bloomberg
By Henry Ren (Bloomberg) Stubbornly high shipping expenses for businesses are getting sealed into contracts for the next 12 months, forcing companies to pass the extra costs on to consumers....
By David Tweed and Kristine Servando
(Bloomberg) — As China spends billions to upgrade and reorganize the People’s Liberation Army, the deficiencies in competing Asia-Pacific militaries are coming into focus. And even some of China’s much heralded military advances are drawing attention for their shortcomings. Here is a snapshot of some of Asia’s less illustrious military kit.
Nothing illustrates the disparity of power in the South China Sea more than the Philippine ex-naval vessel, the BRP Sierre Madre, run aground on the Second Thomas Shoal in the Spratly Islands in 1998. The ship, so rusted it’s impossible to walk over parts of the deck, is manned by a handful of marines and sailors. Its dilapidation contrasts with the 3,200 acres of land reclaimed by China, creating seven islands in the same archipelago.
Big Number: It reportedly costs the Philippine government 3.6 million pesos ($76,900) in fuel each time it has to resupply troops on the Sierra Madre, who are replaced every three to five months. Each mission comes with the risk of run-ins with the Chinese coast guard.
The Philippine Navy frigate is a former destroyer with the U.S. navy, launched in 1943. Her weapons systems are of World War II origin and have barely been upgraded, according to Wu Shang-Su, a research fellow in the military studies program at the S. Rajaratnam School of International Studies.
Big Number: Maintenance of the ship which patrols the South China Sea—or as Manila calls it, the West Philippine Sea—can cost up to 20 million pesos ($428,000), according to government tender notices in 2012.
The outsize ambitions of the Royal Thai Navy are on display at a dock at the Sattahip naval base, south of Bangkok. The aircraft carrier HTMS Chakri Naruebet has no aircraft and has mostly been consigned to port since the 1997 financial crisis led to a funding shortfall. The ship is sometimes used in disaster relief, transporting the royal family, and in May this year participated in anti-submarine drills alongside the U.S. Navy.
Big Number: Thailand bought it for $230 million in 1997. The Spanish-made aircraft carrier’s runway is too short for any aircraft other than helicopters and Harrier planes that can take off and land vertically.
China’s WS-10 Taihang jet engine is considered to be its best, yet it still disappoints, according to Richard Bitzinger, coordinator of the military transformations program at the S Rajaratnam School of International Studies in Singapore. It is underpowered and reportedly lasts only 30 hours before it needs an overhaul, he says. Consequently, most modern aircraft in the People’s Liberation Army are powered by engines mostly from Russia or Ukraine.
Big Number: Last year, state media reported that China earmarked $16 billion in special funding for jet engine development.
The Liaoning is China’s first aircraft carrier. Even when it is fully operational, it isn’t expected to be able to execute long-range power projection similar to U.S. NIMITZ class carriers, according to the Pentagon. Liaoning’s smaller size limits the number of aircraft it can embark, while the ski-jump configuration limits aircraft fuel and ordnance loads, the Pentagon said. In other words, the carrier-based J-15 aircraft has to be so loaded with fuel to take off that it is essentially a flying gas tank, incapable of carrying much in the way of weapons or operating off a carrier for long periods of time, according to Bitzinger.
Big Number: The carrier was bought at a bargain price of $20 million from a Ukrainian shipyard in 1998, according to media reports.
Debuted with fanfare at the Zhuhai Air Show as China’s fifth-generation jet fighter, the J-31 stealth fighter attracts skepticism about its technical prowess. Richard Aboulafa, an analyst at aerospace and defense consultant Teal Group, based in Virginia, says that of 11 criteria to qualify as a fifth-generation fighter, the J-31 possess at best two.
Big Number: At a reported cost of $75 million each, the J-31 is certainly a cheap option—half the price of the U.S. F-35 stealth plane.
China’s so-called “carrier killer” ballistic missile created a stir when displayed for the first time in the 2015 military parade in Beijing. With a range of 2,500 miles, the missile could potentially target a U.S. aircraft carrier. But fear not yet: the DF-26 is unproven against a moving target at sea, according to the U.S.-China Economic and Security Review Commission.
Big Number: The U.S. is concerned about the development of the “carrier killer.” The John F. Kennedy aircraft carrier that is destined for Asia will cost about $11.5 billion, not to mention the lives of its crew of more than 4,000.
The state of some of Indonesia’s military was highlighted when a 51-year old Lockheed C-130 aircraft crashed into a hotel, killing at least 150 people in July last year. The accident raised questions about the military’s reliance on old aircraft and spending that prioritized the army over the air force. A Hercules plane carrying military personnel and their families crashed on Java island in 2009, killing around 100 people, and another went down shortly after takeoff in Jakarta in 1991, leading to over 130 deaths.
Big Number: Indonesia had at least 30 Hercules C-130s under its wing as of 2014.
The U.S. Navy’s new Littoral Combat Ships are designed to plow shallow waters, hunt submarines and chase pirates in small, fast boats: perfect for the South China Sea. Except they keep breaking down. The USS Fort Worth was sent back to home base in San Diego from Singapore after a botched maintenance procedure crippled the ship in January. Another of its class broke down in December and had to be towed to shore.
Big Number: Repairs to the ship are estimated to cost between $20 million to $30 million, according to the Navy Times newspaper.
Join the 67,627 members that receive our newsletter.
Have a news tip? Let us know.