Bulk carrier prices stabilise as world economy improves
THE cost of chartering bulk carriers to transport commodities worldwide has stabilised but looks unlikely to reach the peak hit during 2008, the International Financial Services London (IFSL) body said yesterday.
Duncan McKenzie, director of economics at IFSL, said the Baltic Dry Index (BEDI) – which is based on the average spot price for chartering a carrier – hit an average of 2,362 in the first nine months of the year.
This was up from the lowest reading of 663, but dramatically down from a peak of 11,793 earlier in the year.
The collapse in freight rates in the final months of 2008 reflected the fall in trade, according to the report, which also said seaborne trade would drop by 10 per cent in 2009.
“Last year will be a peak year for BEDI,” the report’s author McKenzie said yesterday.
“We won’t see those levels again for at least five or six years. The industry will recover as the economy and trade starts to improve,” he added.
The report added the global order book for ships reached a peak of 587m dead weight tons at the end of last year, but is expected to decline sharply in 2009 as orders are cancelled in the downturn.
London’s 400 shipbroking firms generated net exports of £948m last year, 23 per cent up on £769m in 2007.
Maritime services contribute to the UK economy through overseas earnings estimated at £2.1bn last year, and over 15,000 jobs.
London is the leading centre worldwide in maritime services.