TelegraphUK: "Shipping rates (from Asia to Europe) hit zero as trade sinks"

[zazen]

I don't know how to read implications of this for our imports. Interesting comments about Baltic Dry Index, about which I posted in early December, in third paragraph.

Shipping rates hit zero as trade sinks
Freight rates for containers shipped from Asia to Europe have fallen to zero for the first time since records began, underscoring the dramatic collapse in trade since the world economy buckled in October.

By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 5:53AM GMT 14 Jan 2009

They have already hit zero," said Charles de Trenck, a broker at Transport Trackers in Hong Kong. "We have seen trade activity fall off a cliff. Asia-Europe is an unmit igated disaster."

Shipping journal Lloyd's List said brokers in Singapore are now waiving fees for containers travelling from South China, charging only for the minimal "bunker" costs. Container fees from North Asia have dropped $200, taking them below operating cost. Industry sources said they have never seen rates fall so low. "This is a whole new ball game," said one trader.

The Baltic Dry Index (BDI) which measures freight rates for bulk commodities such as iron ore and grains crashed several months ago, falling 96pc. The BDI – though a useful early-warning index – is highly volatile and exaggerates apparent ups and downs in trade. However, the latest phase of the shipping crisis is different. It has spread to core trade of finished industrial goods, the lifeblood of the world economy.

. . . .
He said it was "illogical" for shippers to offer zero rates, but they do whatever they can to survive in a highly cyclical market. Offering slots for free is akin to an airline giving away spare seats for nothing in the hope of making something from meals and fees.

[rockymountaindem]

1. I guess this is the "hard landing" my econ. professor talked about when I was a freshman

5.5 years ago.

[lostnotforgotten]

2. KaBoom! - So Much For Globalization

eom

[RedEarth]

3. Trade has fallen off a cliff .... it's very alarming what's going on world wide

...more from the article you posted....

Trade data from Asia's export tigers has been disastrous over recent weeks, reflecting the collapse in US, UK and European markets...

A report by ING yesterday said shipping activity at US ports has suddenly dived. Outbound traffic from Long Beach and Los Angeles, America's two top ports, has fallen by 18pc year-on-year, a far more serious decline than anything seen in recent recessions.

"This is no regular cycle slowdown, but a complete collapse in foreign demand," said Lindsay Coburn, ING's trade consultant....

........

A few days ago I posted a chart showing trade cliff diving....

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x53817

[TomClash]

4. The BDI has begun to bounce back a little

It's closing in on 1,000 after falling to nearly 600. So there has been a slight uptick in bulk cargo, which is consistent some anecdotal evidence.

[Joanne98]

5. K&R