International cargo prices jumping
Costs for international exporters and importers have more than doubled in recent weeks. Demand has dropped to a point where biggest bulk cargo vessels are losing their owners up to $9,000 a day. Stephen Beard reports.
Shipping containers stacked on docks in the Port of Los Angeles in San Pedro, Calif. (David McNew/Getty Images)
More on International
TEXT OF STORY
Renita Jablonski: Now, that recession theme is also in effect overseas. The European Commission said today the Eurozone was in a technical recession. The credit crunch is certainly biting deeper into global trade. There's been a big jump in financing costs for shipping international cargo. Stephen Beard reports from London.
Stephen Beard: The cost of finance for exporters and importers has more than doubled in recent weeks. And often, the finance is not available at all.
The World Trade Organization is so alarmed it's called a meeting of major banks in Geneva next week. International trade is undoubtedly shrinking. Many of the big, dry bulk cargo ships that usually carry raw materials, like iron ore and grain, lie idle.
There's little doubt, says shipping broker Tony Westbrook, the slump is mainly due to lack of credit:
Tony Westbrook: We are seeing factories in China needing less raw materials because demand of some of their finished goods is slowing. But that would not have had the effect on the market that the credit situation has had. It is primarily a credit crunch situation.
There is now so little demand for shipping that the biggest bulk cargo vessels are losing their owners up to $9,000 a day. Many are trying to pull their ships out of service and into mothballs.
In London, this is Stephen Beard for Marketplace.
Comments
Comment | Refresh
Post a Comment: Please be civil, brief and relevant.
Email addresses are never displayed, but they are required to confirm your comments. All comments are moderated. Marketplace reserves the right to edit any comments on this site and to read them on the air if they are extra-interesting. Please read the Comment Guidelines before posting.
You must be 13 or over to submit information to American Public Media. The information entered into this form will not be used to send unsolicited email and will not be sold to a third party. For more information see Terms and Conditions and Privacy Policy.