Shipping sails into the slow lane
HUNDREDS of idle tankers, container ships and bulk carriers hoping for cargo are lying off the coast of Singapore.
It is a striking indication, doomsayers claim, of the fragility of the world's economic recovery and world trade.
Adding to the gloom has been the performance of the Baltic Dry Index (BDI) which is a daily measure by London's Baltic Exchange clearing house of the cost of chartering a bulk carrier to transport largely iron ore, coal and grain around the world calculated on four sizes of vessels operating on four or five main trade routes.
The BDI is falling while investors and economists are saying it is the end of the recession. Unlike other markets, it is not influenced by speculators.
When the commodities boom was in full swing and exporters were scrambling to ship raw materials to a voracious China, the BDI soared to peak near 11 700 in mid-2008 before a 95percent-odd crash to 666 by year's end.
The BDI started an upward march this year to reach 4 100 in June followed by a spasmodic slump to its current 2 175 as Chinese inventory building has slowed.
And the bottom has still to be reached according to the Baltic Exchange. - Jim Jones