Freight shipping service prices for bulk cargo have sharply declined in November under the burden of the global financial crisis, economic growth slowdown, and falling commodity prices, experts warn.
The Baltic Dry Index (BDI), which tracks the prices of ocean transport for goods such as coal, iron ore, and grain, has significantly weakened over the past five months, dropping to just 815 points last week, the lowest level since the end of 1999. For comparison, it was a record 11,793 points in May. “The freight shipping market has simultaneously been burdened by the crisis in the financial sector and the economic slowdown that followed,” emphasize analysts from the British emerging markets bank Standard Chartered.
“It is speculated that this is largely a result of difficulties in addressing trade financing issues due to the credit crisis and only to a lesser extent a consequence of falling demand, although demand for goods has undeniably weakened, particularly Chinese demand for iron ore, which has an extremely strong effect on the bulk shipping market,” they add. An extraordinary meeting will be held in London on Wednesday, where radical measures will be proposed to address the crisis in the shipping industry caused by the collapse of bulk freight prices.
