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With over 80 per cent of world merchandise trade by volume being carried by sea, maritime transport remains the backbone of international trade and globalization. During the past three decades, the annual average growth rate of world seaborne trade is estimated at 3.1 per cent…
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Download file to see previous pages This report is a short study of some of the recent developments in international trade and finance and their impact on maritime transport, suggesting ways how shipping can weather the storm and manage itself financially to remain the most viable and popular mode of international transport.
According to International Chamber of Shipping, the international shipping industry is responsible for the carriage of about 90 percent of world trade. Intercontinental trade, the bulk transport of raw materials and the import/export of affordable food and goods would simply not be possible without shipping. Notwithstanding the recent contraction in trade resulting from the present economic downturn, the world economy is expected to continue to grow and shipping will need to respond to the demand for its services.
“Capesize Vessels” weigh from 175,000 tons to 400,000 tons and count as some of the largest craft in the World. They typically carry raw materials such as Iron ore, Steel, Coal and other raw commodities. Where you used to pay up to $230,000 per day to rent one, now you can have one for a measly $2800 per day. Lloyds even reported yesterday that one Capesize vessel was going for $1000 per day. These levels of payment are crippling the Shipping Industry and leading to cancelled orders with Shipyards where it is cheaper to let the shipbuilder keep the deposit. More and more older carriers are being scrapped as their value decreases. In October alone, more shipping tonnage was scrapped than in the previous 2 years. The inevitable result of this will be less tonnage available to transport raw materials. From an economic standpoint, supply will decrease thus theoretically lead to a commensurate increase in leasing prices, thus forcing the Baltic Dry Index up again.
In the meantime though, there will be a large increase in job losses in the shipping ...Download file to see next pagesRead More
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