[MOCKBA]

$this->bbcode_second_pass_quote('IslandCrow', 'A') couple of weeks ago I wondered here who long it would be until transport of cars to Russia would tank. Today's online report in one paper has the following:

$this->bbcode_second_pass_quote('', 'A')ccording to estimates made by Finnish Customs, a total of 350 truckloads of cars will leave the Port of Kotka for Russia this week. In comparison, in the current year the average number of cars shipped eastwards through Finland in transito traffic has been more than 200 truckloads a day.

[catbox]

We ship internationally every day...so far everything is making to all corners of the globe. Did have a few customers call today asking why their govt's are charging so much on import taxes....(UK and Canada)....otherwise, all's well. We're actually shipping about 200 packages a day and the number is rising...we do snowboard, skateboard, and surf related goods.

Let it snow!

[MrBill]

$this->bbcode_second_pass_quote('catbox', 'W')e ship internationally every day...so far everything is making to all corners of the globe. Did have a few customers call today asking why their govt's are charging so much on import taxes....(UK and Canada)....otherwise, all's well. We're actually shipping about 200 packages a day and the number is rising...we do snowboard, skateboard, and surf related goods.

Let it snow!

[Cid_Yama]

I agree Mr Bill,

If this is going to be our last good Christmas, let it be like the ones of our youth. I'll meet you at the Lodge for a hot toddy.

Let the New Year be the end of the world party, then we can set to work on the business of survival in the new year.

[Cid_Yama]

<b>Ocean trade choked as credit notes dry up</b>

There is growing evidence the global credit crisis is stifling seaborne trade as banks become more reluctant to honour crucial letters of credit between buyers and sellers who ship goods and resources, analysts say.

"With reports of sellers' banks deciding they don't trust the financial institutions named in buyers' letters of credit, have come alarming anecdotes of cargo ships being stuck in home ports," Matt Robinson, an economist at Moody's Economy.com, said.

"With ships not moving, stocks have been piling up and exporters have grown desperate for income from idle inventory," Sydney-based Robinson said in a report published on Wednesday.

In the Moody's report, entitled "Crisis of confidence hits global shipping", Robinson said there was growing anecdotal evidence the financial crisis was hitting the real economy and suffocating trade.

Around 90 percent of the world's traded goods by volume, including key raw materials, are shipped by sea.

In the last few months main sea freight indices, barometers of global demand, have been hit by the deepening financial crisis, falling commodity prices and slowing economic growth.

The Baltic Exchange's Dry sea freight index <.BADI> a proxy for future demand growth in raw materials except oil, plunged to a six-year low this week from a record hit in May.link

<b>Dry Bulk Shippers Foundering</b>

Dry bulk shippers are going the way of the global economy: under water. Among the shippers, DryShips and Excel Maritime Carriers have been hit particularly hard because of their large debtloads and significant spot market exposure.

For the 13th straight day, the Baltic Dry Index, which measures dry bulk shipping rates on 40 routes across the world, tumbled Wednesday, falling 71 points to 1,221.

Jeffrey Landsberg, a freight options broker at Imarex, a shipping-related derivatives exchange, said that financing has become a huge problem and has pushed freight rates down to break-even levels.

“Day rates have fallen below costs for some ship owners,” Landsberg said. “Rather than take inadequate fixtures, they are anchoring their vessels and letting them sit idle.”

Most observers thought the dry bulk market would worsen in 2009 and 2010 because of the substantial number of new vessels due for delivery, but the downturn in the global economy has brought the good times to a quicker end than anyone expected.

Even the last-ditch scenario of scrapping ships to sell for steel is not an option anymore as buyers of scrap have had difficulty getting letters of credit to do so, Landsberg said. With steel prices lower, ship owners are also less inclined to scrap their ships.

“Everything’s at a standstill,” Landsberg said.
link

[MrBill]

Cid Yama wrote:
$this->bbcode_second_pass_quote('', 'O')cean trade choked as credit notes dry up

There is growing evidence the global credit crisis is stifling seaborne trade as banks become more reluctant to honour crucial letters of credit between buyers and sellers who ship goods and resources, analysts say.

"With reports of sellers' banks deciding they don't trust the financial institutions named in buyers' letters of credit, have come alarming anecdotes of cargo ships being stuck in home ports," Matt Robinson, an economist at Moody's Economy.com, said.

[Twilight]

If you think LOCs are bad, how about accounts payable?

EURCNY

EURUSD

You get the idea. You buy, ship, sell, but can't pay the supplier.

You know how Christmas gives everyone indigestion. Catch my drift?

Oh yeah, you can hedge so someone else loses the money.

If there is anything you need, buy it in the sales next year. That will be the deflationary cash is king bit. After that, **** it.

[galacticsurfer]

http://www.bloomberg.com/apps/news?pid= ... refer=news

$this->bbcode_second_pass_quote('', '
')Oct. 28 (Bloomberg) -- The Baltic Dry Index, the benchmark for commodity shipping costs, fell below 1,000 for the first time in six years as the lack of credit curbed global trade and shipowners threatened to shun orders.

The index, watched by banks including UBS AG as an economic indicator, fell 66 points, or 6.3 percent, to 982 points, the lowest since Aug. 8, 2002. The gauge has dropped 89 percent this year, driving down the combined market capitalization of the 12- member Bloomberg Dry Ships Index, led by Athens-based Diana Shipping Inc., to $5.5 billion from $32 billion a year ago.

``You are getting very, very close to the cost of just crewing and running a ship,'' Richard Haines, a senior director at London-based shipbroker Simpson, Spence & Young Ltd., said in an interview today. ``It can't go much lower than this without owners deciding they don't want their ships employed.''

[Tanada]

$this->bbcode_second_pass_quote('galacticsurfer', 'h')ttp://www.bloomberg.com/apps/news?pid=20601085&sid=aV66nrns9zEg&refer=news

$this->bbcode_second_pass_quote('', '
')Oct. 28 (Bloomberg) -- The Baltic Dry Index, the benchmark for commodity shipping costs, fell below 1,000 for the first time in six years as the lack of credit curbed global trade and shipowners threatened to shun orders.

The index, watched by banks including UBS AG as an economic indicator, fell 66 points, or 6.3 percent, to 982 points, the lowest since Aug. 8, 2002. The gauge has dropped 89 percent this year, driving down the combined market capitalization of the 12- member Bloomberg Dry Ships Index, led by Athens-based Diana Shipping Inc., to $5.5 billion from $32 billion a year ago.

``You are getting very, very close to the cost of just crewing and running a ship,'' Richard Haines, a senior director at London-based shipbroker Simpson, Spence & Young Ltd., said in an interview today. ``It can't go much lower than this without owners deciding they don't want their ships employed.''

[Cid_Yama]

<b>World trade grinds to a halt as letters of credit vanish</b>

Lack of trade finance is having a disastrous effect on shipping. In a report issued on Friday, Maersk Broker, a subsidiary of the Danish shipping group, blamed logjams in the banking system for the slump in the dry bulk cargo market: “Banks’ refusal to offer letters of credit has resulted in very few fresh cargoes reaching the market, which is adding to the owners’ woes.” A collapse in the trade of raw materials such as grain and iron ore, after years of frantic activity, is causing havoc. The Baltic Exchange Dry Index, which measures the price of voyages and the cost of chartering vessels, has plummeted. Rates for the largest transporters, known as Capesize, peaked in May at $230,000 a day. It is estimated that the daily cost of running the ships, including depreciation, is about $15,000 but at the end of last week, rates had fallen to $5,982 a day.

link

[Cid_Yama]

<b>Dry-Bulk Shipping Slips Underwater</b>

With credit drying up, asset values falling and loan defaults surfacing, dry-bulk shippers now bear an eerie resemblance to the subprime mortgage market.

Without demand for goods from Europe and the U.S., emerging markets are having trouble sustaining growth, and dry-bulk shipping companies, which move commodities such as grain and metals, are getting hurt. China is slashing steel production, for example. Letters of credit, which keep cargo moving, are almost nonexistent.

At the same time, the net asset values of dry-bulk ships have fallen roughly 50% in the last four months, but outstanding loans for ships and contracts remained static, tearing shippers and their creditors. None of this is a surprise to investors. In the last six months, dry-bulk shipping stocks tumbled 74.8% (see "High And Dry In Dry Bulk").

"The whole thing is eerily similar to the subprime fiasco," says Jeffrey Landsberg, a freight-options broker at Imarex, a shipping-related derivatives exchange. "No one imagined home prices could come down, but as the value of this asset did come down, loans were unable to be repaid."

link

[ohanian]

And today

. . . the stock markets

. . . . . are sailing in a sea of red.

[MrBill]

I agree, Cid. The drop-off has been much faster than anyone could have imagined. Truly scary. In 9-18 mos. there will be real bargains to be had in ships. On the brighter side this should be a good incentive to take older, single-hulled vessels that are less fuel-efficient out of service. And as vessels are sailing slower they use less fuel.