News

November 10, 2008

Financial Crisis Knocks Shipping Rates For Six

Sally White

Shipping rates had been expected to come under pressure last week, with the deepening of the financial crisis, but the ferocity of declines in the dry and container markets took brokers by surprise as severe lack of cargoes took rates tumbling even further. The Baltic Dry Index, which tracks the cost of shipping bulk goods by sea, is at its lowest level in nearly a decade, with ship owners "laying up" ships rather than operating them at a loss, and cargo piling up at ports.

Capesizes (large) ships remain paralysed, says brokers Braemar Seascope, and the question is for how much longer owners and even operators will continue to trade at current rate levels. The disastrous fall in cargoes on lack of trade credits still remains the primary concern, with rates tumbling across all the routes as a consequence. Overall the BCI index was down 218 to 1307 for the week with the average of the 4t/c routes standing at 6365, a fall of 2299. The average 4t/c routes rate...