AuthorTopic: Official Shipping Collapse Thread  (Read 13853 times)

Offline Golden Oxen

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Re: Baltic Dry Index hits NEW All-Time Low
« Reply #15 on: December 16, 2015, 08:50:29 AM »
As a brief addenda to this posting, this is the quarter it is usually the Strongest. The first quarter of the year is it's seasonal Weakest point.  ::)

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Freight Shipments Hammered by Inventory Glut, Weak Demand
« Reply #16 on: December 16, 2015, 09:50:43 AM »
It's not just the bulk commodities.  It's going all across the shipping industry including rail and trucking.

RE

http://wolfstreet.com/2015/12/15/freight-shipments-plummet-as-inventory-glut-bites/

Freight Shipments Hammered by Inventory Glut, Weak Demand
by Wolf Richter • December 15, 2015   

The goods-based economy swoons.

The transportation sector just keeps getting worse. Even after today’s uptick, the Dow Jones Transportation Average is back where it was in April 2014, and down 18% from its peak a year ago. Within this transportation sector is freight, a gauge of the goods-based economy, which is having a rough time.

In November, the number of freight shipments in North America plunged 5.1% from a year ago, according to the Cass Freight Index. It hit the worst level for any November since 2011.

The index is based on $28 billion in freight transactions processed by Cass on behalf of its client base of “hundreds of large shippers,” Cass explains. It covers shipments, regardless of the mode of transportation, including shipments by truck and rail. It does not cover bulk commodities. Shippers include companies in consumer packaged goods, food, automotive, chemical, OEM, heavy equipment, and retail.

This index of shipment volume has been lower year-over-year every month, with the exception of January and February, which makes for an increasingly awful looking year:


Reasons for these lousy shipment volumes are spread throughout the economy, including a litany of big retailers that have come forward with crummy results and disappointing projections.

Yesterday it was Dallas-based Neiman Marcus, which caters to luxury shoppers. It reported its first quarterly sales decline since 2009, down 1.8% from a year ago, with same-store sales down 5.6%. It booked a loss and laid off 500 people. As so many times, there’s a private-equity angle to it: Subject of an LBO in 2005, it’s now owned by Ares Capital and the Canadian Pension Plan Investment Board. They were hoping to make a bundle via an IPO. But now the IPO has been put on hold.

CEO Karen Katz blamed the oil and gas fiasco. Its customers in Texas run and own companies in the depressed energy sector, or they receive royalty checks. Alas… “Business conditions were quite challenging,” Katz said. She also blamed the “strong dollar” that prevented foreign tourists from splurging at its stores in the gateway cities Honolulu, San Francisco, Las Vegas, New York, Washington, and Miami.

This follows the disastrous results at Men’s Wearhouse, which blamed its misbegotten foray into M&A. At the company it acquired, Jos. A Banks, same-store sales plunged 14.6%.

Retailers are lamenting their high inventories. But not just retailers. Total business inventories across the country have piled up to suffocating levels. Given lackluster sales, the crucial inventory-to-sales ratio, which measures inventory turnover, has reached 1.38, worse than it had been in October 2009 during the Financial Crisis:


And Cass issued a warning about this inventory glut:

    The Federal Reserve has held back from raising interest rates, but is expected to announce higher rates in December. This will negatively affect those companies holding record high inventories, as carrying costs will begin to rise more rapidly.

So companies are trying to whittle down their inventories, and since it’s not happening via booming sales, they’re cutting orders. Shipment volume follows. And the Cass index for shipments, including rail and trucking, has been taking a drubbing in November – particularly among railroads. Cass:

    The Association of American Railroads reported a drop of 7.4% and 6.0% in carloads carried and intermodal [containers], respectively.

    The drop in intermodal reflects the high inventory levels faced by retailers and wholesalers and is more reflective of the goods included in the Cass Freight Shipments Index.

    Much of the carload loss is due to drops in bulk commodities such as coal, petroleum products and metallic ores—products not as well represented in the Cass data.

Cass summarized the situation in the economy as it impacts transportation this way:

    Imports have slowed down considerably as retailers and wholesalers have ample supply for the holiday season. The November Institute for Supply Management’s Purchasing Manager’s Index (PMI) declined almost 3%, while production was down 7%, new orders off 7.6%, and order backlog increasing 1.2%. For the first time since August 2012, the PMI Production Index has dropped to a level indicating that it is contracting.

And so the index for freight expenditures, which tracks the money spent on shipping products, plunged 9.1% in November from a year ago, on a combination of lower volumes and lower shipping rates. Except for January and February, the index has been lower year-over-year every month.


And December is going to be even worse: “Expect freight to erode in December following established seasonal trends,” Cass said to soothe our frayed nerves.

Retailers of all kinds in once booming Texas, not just luxury-focused Neiman Marcus, are getting hit as Oil Bust Contagion spreads into the broader economy. Read…  Retail Sales in Texas Plunge
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Online RE

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Re: Official Shipping Collapse Thread
« Reply #17 on: December 30, 2015, 05:52:27 PM »
Lotta guys in truckstops with nuthin' to do.

RE

http://www.zerohedge.com/news/2015-12-30/wheels-just-fell-us-trucking-has-not-been-bad-financial-crisis

The Wheels Just Fell Off: US Trucking Has Not Been This Bad Since The Financial Crisis

Submitted by Tyler Durden on 12/30/2015 19:30 -0500

    Morgan Stanley Wells Fargo
 

Earlier this month, we profiled yet another casualty of slumping trade, falling commodity prices, and mediocre, double-adjusted economic “growth”: trucking.

More specifically, we highlighted the dramatic November decline in Class 5-8 orders. The numbers for Class 8 - those trucks with a gross weight over 33K pounds and which, you’re reminded, make up the backbone of U.S. trade infrastructure and logistics - were a veritable disaster.

“Class 8 orders of 16,600 were below our channel check based 22,000-25,000 expectation, dropped 59% yr/yr and 36% from October (vs. the ten-year average 7% decrease in November from October), and was the weakest order month on a seasonally adjusted basis since August 2010,” Wells Fargo exclaimed, before adding that “clearly, November Class 8 orders slowed to weak levels and were beneath expectations.”

Yes, "clearly":

Bloomberg Sponsored Content

And a bit more from FTR:

    FTR has released preliminary data showing November 2015 North American Class 8 truck net orders at 16,475, 59% below a year ago and the lowest level since September 2012.  This was the weakest November order activity since 2009 and was a major disappointment, coming in significantly below expectations.  All of the OEMs, except one, experienced unusually low orders for the month.

“Based on what we were seeing, we thought freight and truck sales would stay strong through the end of 2015 and into 2016, with a downturn beginning at some point in the second half of 2016,” Kenny Vieth, president & senior analyst with ACT Research Co told FleetOwner. "Falling commodity prices means freight is drying up and that is freeing up [truck] capacity. Meanwhile, exporting less means manufactures like Caterpillar can’t sell as many machines overseas, so they start producing less and that reduces freight further," he added.

Well, don't look now, but Morgan Stanley is out with its latest "truck stop" (i.e. a freight transportation update) and the picture is not pretty. Have a look at the following three graphics for the bank's Truckload Freight Index broken down by flatbed, dry van, and reefer:

In short: this is the worst things have been since the crisis.

Importantly, note that the malaise is widespread. That is, you're seeing the same picture in flatbed, refrigerated, and dry van, which would certainly seem to indicate that demand for everything from foodstuffs, to building materials, to merchandise is simply collapsing. Here's a look at survey respondents' appraisal of the current situation and their outlook for demand going forward:

If, as one might suspect, this is a harbinger of what's in store for the economy in 2016, you can expect the Fed hike to be reversed in short order - with QE4 right around the corner.

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Online RE

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"Nowhere To Hide" As Baltic 'Fried' Index Careens To Fresh Record Low
« Reply #18 on: January 07, 2016, 01:52:41 PM »
The Titanic has hit the Iceberg.


RE

http://www.zerohedge.com/news/2016-01-07/nowhere-hide-baltic-fried-index-careens-fresh-record-low

"Nowhere To Hide" As Baltic 'Fried' Index Careens To Fresh Record Low
Submitted by Tyler Durden on 01/07/2016 15:00 -0500


Another day, another fresh all-time record low in The Baltic Dry Index as Deutsche Bank's "perfect storm" appears ever closer on the horizon. Plunging 4.7% overnight to 445 points, this is 20% lower than the previous record low in 1986 and as one strategist warns, "It’s a brutal start of the year, there’s just nowhere to hide on the market."

 

 

"This looks like a ripple effect from what happened back in August," adds Alexandre Baradez, chief market analyst at IG France, hopefully looking forward, "it might continue for a few weeks, but given China’s central bank fire power, it shouldn’t last for more than that."

But Deutsche's "perfect storm" looms...

    The improvement in dry bulk rates we expected into year-end has not materialized. And based on conversations we've had with several industry contacts, we believe a number of dry bulk companies are contemplating asset sales to raise liquidity, lower daily cash burn, and reduce capital commitments. The glut of "for sale" tonnage has negative implications for asset and equity values. More critically, it can easily lead to breaches in loan-to-value covenants at many dry bulk companies, shortening the cash runway and likely necessitating additional dilutive actions.

     

    Dry bulk companies generally have enough cash for the next 1yr or so, but most are not well positioned for another leg down in asset values

     

    The majority of publically listed dry bulk companies have already taken painful measures to adapt to the market- some have filed Chapter 11, others have issued equity at deep discounts, and most have tried to delay/defer/cancel newbuilding deliveries.

     

    The additional cushion, however, is likely not enough if asset values take another leg down; especially given the majority of publically listed dry bulk companies are already near max allowable LTV levels.

     

    The move to sell assets in unison can lead to a downward spiral, where the decline in values leads to an immediate need for additional equity to cure LTV breaches.

Source: Deustche Bank
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Online RE

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Rail Shipments Plummet to Recessionary Levels
« Reply #19 on: January 08, 2016, 01:44:52 PM »
Choo-choo Trains not doing too good either.

RE

http://wolfstreet.com/2016/01/07/rail-volumes-at-recessionary-levels/

Rail Shipments Plummet to Recessionary Levels
by Wolf Richter • January 7, 2016   

“Weaknesses in energy and manufacturing, as well as world economic softening, had a negative impact on both carload and intermodal traffic in 2015.” Those were the encouraging words of John T. Gray, Senior VP of Policy and Economics at the Association of American Railroads (AAR).

Transportation is a measure of how well the real economy is clicking. Alas rail traffic is getting clobbered.

The deterioration in the second half of 2015 dragged the whole year down from 2014: carloads fell 6.1%, according to the AAR, while intermodal containers and trailers edged up 1.6%, for a total decline of 2.5%. But the deterioration late in the year was a doozie.

In December, total volume dropped 8.9% year over year, with both components down: even intermodal containers and trailers, which had been holding up for much of the year, edged down 0.7%; and carloads (bulk commodities, autos, and the like) plunged 15.6%.

Only four of the 20 carload categories showed gains, and they’re relatively small categories: miscellaneous carloads, up 46.6%; motor vehicles and parts, up 5.2% (that relentlessly booming auto sector); chemicals, up 0.7%; and waste and scrap, up 3.3%.

But the big ones got crushed: carloads of coal, the largest category – done in by the low price of US natural gas emanating from the collapsing natural gas industry – plunged 27.9%; metallic ores, the second-largest category, plunged 39.1%; and petroleum and petroleum products, the third largest category, plunged 20.5%. The commodities rout is tearing into railroads with a vengeance!

And then there was last week’s rail traffic!

Christine Hughes, Chief Investment Strategist at OtterWood Capital, put it this way: “Rail volumes at recessionary levels.”

    Last week rail carload data showed volumes fell 10.1% on a year-over-year basis resulting in the longest period of sustained weakness since 2009. Rail carloads have now fallen 5% on a year-over-year basis for the past 11 consecutive weeks. Over the last 30 years this has only happened five times and each occurrence either overlapped or preceded a recession by a few quarters.

And she added this nerve-wracking chart. Note the steep plunge to -10% at the right edge. The last three times this occurred, the economy was either entering a recession or was already deep into a recession:


Miracles do happen, and rail traffic could turn around on a dime and recover somehow, but it would take a major miracle to get that done, and not an ordinary run-of-the-mill miracle. And those have become exceedingly rare.

For our over-indebted, junk-rated retailers, our favorite LBO queens, it’s going to get very tough. Read…  Defaults and Restructuring Next for Retailers
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Online RE

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"Nothing Is Moving," Baltic Dry Crashes , "Commerce Has Come To A Halt"
« Reply #20 on: January 11, 2016, 01:22:47 PM »
No ships in the North Atlantic!

RE

http://www.zerohedge.com/news/2016-01-11/nothing-moving-baltic-dry-crashes-insiders-warn-commerce-has-come-halt

"Nothing Is Moving," Baltic Dry Crashes As Insiders Warn "Commerce Has Come To A Halt"

The continued collapse of The Baltic Dry Index remains ignored by most - besides we still have Netflix, right? But, as Dollar Vigilante's Jeff Berwick details, it appears the worldwide 'real' economy has ground to a halt!!

Last week, I received news from a contact who is friends with one of the biggest billionaire shipping families in the world.  He told me they had no ships at sea right now, because operating them meant running at a loss.

This weekend, reports are circulating saying much the same thing: The North Atlantic has little or no cargo ships traveling in its waters. Instead, they are anchored. Unmoving. Empty.

You can see one such report here.  According to it,

    Commerce between Europe and North America has literally come to a halt. For the first time in known history, not one cargo ship is in-transit in the North Atlantic between Europe and North America. All of them (hundreds) are either anchored offshore or in-port. NOTHING is moving.

     

    This has never happened before. It is a horrific economic sign; proof that commerce is literally stopped.

We checked VesselFinder.com and it appears to show no ships in transit anywhere in the world.  We aren’t experts on shipping, however, so if you have a better site or source to track this apparent phenomenon, please let us know.

We also checked MarineTraffic.com, and it seemed to show the same thing.  Not a ship in transit…

If true, this would be catastrophic for world trade. Even if it’s not true, shipping is still nearly dead in the water according to other indices.  The Baltic Dry Index, an assessment of the price of moving major raw materials by sea, was already at record all-time lows a month ago... and in the last month it has dropped even more, especially in the last week. Today BDIY hit 415...

 

Factories aren’t buying and retailers aren’t stocking.  The ratio of inventory to sales in the US is an indicator of this. The last time that ratio was this high was during the “great recession” in 2008.

Hey, Ms. Yellen, what recovery? The economy is taking on water at a rapid rate.

The storm has been building for some time, actually. Not so long ago, there was a spate of reports that the world’s automobile manufacturers were in trouble because cars were not selling and shipments were backing up around the world.

ZeroHedge reported on it this way:

    In the past several years, one of the topics covered in detail on these pages has been the surge in such gimmicks designed to disguise lack of demand and end customer sales, used extensively by US automotive manufacturers, better known as “channel stuffing”, of which General Motors is particularly guilty and whose inventory at dealer lots just hit a new record high. 

Here is a photo of unsold cars in the United Kingdom from that article.

The world’s economy seems in serious trouble. You can’t print your way to prosperity. All you are doing is hollowing out your economy. Draining it. And sooner or later it’s empty and you have to start over after a good deal of crisis and chaos.

It’s no coincidence that China is struggling desperately to contain a stock implosion.  Reportedly, banks have been told they are forbidden to buy US dollars and numerous Chinese billionaires have gone missing.  And the markets have just opened on Monday and are again deeply in the red.

Here at The Dollar Vigilante we’ve specialized in explaining the reality of the global faux-economy and why it’s important that you not believe mainstream media lies.

In the meantime, keep your eye on this shipping story!  If it is true and worldwide shipping is disastrously foundering, it’ll only be a matter of days before grocery store shelves will reflect that with increasingly bare shelves.

Are people upset now? Just wait. Interruptions in goods and services, most critically food, almost happened in 2008 during the Great Financial Crisis.  For three days worldwide shipping was stranded due to shipping companies not knowing whether or not the receiver’s bank credit was good.

That crisis was staved off due to a massive amount of money printing.  It was a temporary stay of execution, like bailing out the Titanic with coffee cups, however, and one that may reach much larger proportions in 2016.

Sailors watch the weather to see if it is safe to set sail.  Investors should be watching the economic climate with the same intensity.

We are already sailing through very stormy waters.
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Online Eddie

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Re: Official Shipping Collapse Thread
« Reply #21 on: January 11, 2016, 04:47:36 PM »
Apparently, this story is fairly inaccurate. Not that shipping isn't down.

http://globaleconomicanalysis.blogspot.com
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Re: Official Shipping Collapse Thread
« Reply #22 on: January 11, 2016, 05:35:10 PM »
Apparently, this story is fairly inaccurate. Not that shipping isn't down.

http://globaleconomicanalysis.blogspot.com

Wouldn't be the first time ZH exaggerated a story, and it won't be the last either.

However, looking at those maps, there don't seem to be any ships in the middle of the North Atlantic, they all seem to be nearby ports.  Statistically speaking, there should be a few in transit in the middle of the ocean, but there are none.

I'm not sure Mish's info is all that good either.

In any case, it's obviously a pretty dire situation for the shippers.  Nobody can make a profit with the shipping rates that low.

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Offline agelbert

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Re: Official Shipping Collapse Thread
« Reply #23 on: January 11, 2016, 07:07:13 PM »
Apparently, this story is fairly inaccurate. Not that shipping isn't down.

http://globaleconomicanalysis.blogspot.com

Wouldn't be the first time ZH exaggerated a story, and it won't be the last either.

However, looking at those maps, there don't seem to be any ships in the middle of the North Atlantic, they all seem to be nearby ports.  Statistically speaking, there should be a few in transit in the middle of the ocean, but there are none.

I'm not sure Mish's info is all that good either.

In any case, it's obviously a pretty dire situation for the shippers.  Nobody can make a profit with the shipping rates that low.

RE

Eddie,
I didn't read that story but I have data from shipping sites, which I posted on my channel that confirm the dire shippimg situation. There are TWO indexes that are in the tank, not just one:
1)  The Bulk Dry Index
2) The Capesize Index


Here's the story. Shipping is in deep trouble. That is NOT hyperbole.

Baltic Dry Index Falls Further: Shipping Index Slides 5% to 445 Points!  :o

January 7, 2016 by Reuters

Jan 7 (Reuters) – The Baltic Exchange’s main sea freight index, tracking rates for ships carrying industrial commodities, fell to a record low Thursday on worries over vessel demand from top importer China.

The overall index, which gauges the cost of shipping dry bulk cargoes including iron ore, cement, grain, coal and fertiliser, fell 22 points to 445 points. The near-5 percent drop took the index to its lowest since records began in January 1985.

The dry bulk shipping downturn that began in 2008 after the onset of the financial crisis has worsened significantly in recent months as demand for iron ore and coal has declined in the face of slower economic growth in China.

Analysts also see vessel lay-ups and a higher number of ships dismantled this year if the market does not improve.

“The dry bulk sector will probably have to reduce the new building orderbook and increase ship recycling in 2016 to restore the balance,” Moore Stephens shipping partner Richard Greiner said in a note on Wednesday.

A lay-up is when a ship is taken out of service, with some or all of the crew taken off. In a cold lay-up, a ship is mothballed, with only dehumidifiers to keep it from deteriorating.

The capesize index fell 68 points to 399 points as average daily earnings dropped by $562 to $4,198. Capesizes typically transport 150,000-tonne cargoes such as iron ore and coal.

Rising iron ore supplies from top miners are adding to a glut of the steelmaking raw material, weighing on prices.

The panamax index fell 14 points, a little more than 3 percent, to 450 points.

Average daily earnings for panamaxes, which usually carry coal or grain cargoes of about 60,000 to 70,000 tonnes, decreased $110 to $3,595.

(Reporting By Nallur Sethuraman in Bengaluru; Editing by David Goodman)

(c) Copyright Thomson Reuters 2016.

https://gcaptain.com/2016/01/07/baltic-dry-index-falls-to-record-low-445-points/

Agelbert Comment: Look out below!
« Last Edit: January 11, 2016, 07:17:07 PM by agelbert »
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Offline agelbert

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Re: Official Shipping Collapse Thread
« Reply #24 on: January 11, 2016, 07:19:54 PM »
And here's another story that confirms how WRONG the shippers :iamwithstupid: were to think the economy would get better this year, instead of much worse.

 
More Big Ship Deliveries Set to Boost Overcapacity

January 8, 2016 by The Loadstar
The 199,224 teu capacity MSC Oliver ultra-large container vessel in Okpo, Korea before its delivery in March 2015.

By Mike Wackett

(The Loadstar) – The seemingly never-ending quest by ocean carriers to operate bigger ships was a significant spur for orders for 60 18,000-22,000 teu behemoths in 2015, according to Alphaliner.

Carriers    were apparently undeterred by weakening market conditions last year  and continued their big-ship strategies – ultra-large container vessels (ULCVs) representing 24% of the total cellular orderbook.

The analyst warned that the “ongoing race” between carriers within the four east-west vessel-sharing alliances to have the lowest unit costs, by reason of the highest nominal capacity, would add to further overcapacity pressures, due to the high number of ULCVs to be delivered in the coming years.

Indeed, there are already signs that carriers have too many ULCVs – which, notwithstanding the recent trial on the transpacific tradelane by the 17,859 teu CMA CGM Benjamin Franklin, are generally restricted in their deployment to the Asia-Europe routes.

In order to obtain the holy grail of lowest unit cost, equating to the cheapest rate offers in the market, carriers must achieve high load factors, thus exerting further downward pressure on freight rates as the call goes out to sales teams: “Fill the ship at all costs.”

One carrier told The Loadstar recently that to efficiently service the trade it ideally needed a combination of different-sized ships going between Asia and North Europe, rather than a one-shoe-fits-all ULCV fleet.

Moreover, notes Alphaliner , there were 52 units of 10,000-13,300 teu ordered last year, albeit that these ships could be deployed on services going via the enlarged Panama Canal after it opens.

Meanwhile, according to Alphaliner’s latest data, the world’s cellular containership fleet had by the end of 2015 reached a total slot capacity of 19.94m teu, representing an 8.5% growth over the previous year.

A record 214 new containerships entered the market last year, adding 1.72m teu to the fleet. However, according to data from shipbroker Braemar ACM, there were just 93 vessels, or 213,000 teu demolished last year, as scrapping prices declined as a result of the global steel glut.

The consequence of reduced scrapping for the container shipping industry – as well as other shipping sectors (excluding tankers buoyed by oil storage charters) – is that charter rates have begun the year under severe pressure again.

And in the absence of demand, for many owners and operators there appears no option but to lay-up their own or long-term-chartered ships, continuing the trend of 2015 which saw the idle containership fleet swell five-fold to 1.36m teu – 6.8% of the global fleet.

Alphaliner does not see ‘early light at the end of the tunnel’ for the container liner industry, and notes that in February’s post-Chinese New Year holiday period there are several blanked sailings planned, which it said would lead to several large ships being idled.

“A significant reduction of the idle fleet is thus not expected until April,” it said.
https://gcaptain.com/2016/01/08/more-big-ship-deliveries-set-to-boost-overcapacity/

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http://www.zerohedge.com/news/2016-02-04/worlds-biggest-containership-hard-aground-baltic-dry-crashes-below-300-first-time-ev

World's Biggest Containership "Hard Aground" As Baltic Dry Crashes Below 300 For First Time Ever

Submitted by Tyler Durden on 02/04/2016 16:35 -0500

    Baltic Dry China Germany Global Economy

Before this year the lowest level The Baltic Dry Index had reached was 556 in August of 1986 and the highest was in June 2008 at a stunning 11,612. Today saw the freight index hit a new milestone however, crashing through the 300 barrier for the first time ever - at 298, this is almost 50% below the previous record low.


Commodities obviously are saying something very different from "the market"...


And as Dana Lyons notes, of course much of the input into the BDI comes from the price of raw materials. Considering the deflationary spiral in commodities, the drop in the BDI to all-time lows shouldn’t be a shock.

    However, the depths that the index is now plumbing is quite alarming and suggests trouble in the global trade picture.

     

    It would also suggest perhaps that the deflationary pressure is not just a supply issue. Consider every prior drop in the Baltic Dry Index down to the 500-600 level. Each time, the index immediately jumped as if latent demand was just waiting for those lower prices. That development has not yet occurred this time around, even as prices are reaching 45% below the previous record low.

     

    The Baltic Dry Index has become a trendy thing to mention in recent years when discussing global market and economic conditions. The truth is, nobody really ever knows for sure what the broader message is behind the index’s behavior. That said, this recent plunge is making it quite difficult to conceive that it means anything positive in terms of the global economy and deflationary pressures.

And finally it's not just commodities and the Baltic Dry that stalled, as gCaptain reports, one of the world’s biggest containerships is hard aground in Germany’s Elbe River leading to the port of Hamburg.


The vessel CSCL Indian Ocean ran aground Wednesday night following an apparent mechanical failure.

    An attempt to refloat the ship at around noon local time was unsuccessful.

     

    Germany’s Central Command for Maritime Emergencies (CCME) says it has been in touch with the ship owner and they are in the process of developing a salvage plan. A second attempt to refloat the ship is expected during high tide Thursday night.

     

    An overflight of the area Thursday showed no signs of pollution. There were no injuries reported.

     

    The Hong Kong-flagged ultra large container vessel (ULCV) CSCL Indian Ocean measures 399.6 meters long by 58.6 meters wide. The vessel belongs to China Shipping Container Lines, part of China Shipping Group. It is one of 5 CSCL ships with the capacity to carry a staggering 19,100 twenty foot containers.

     

    The incident has caused minor impacts to ship traffic on the Elbe River.

     

    CSCL Indian Ocean is part of a new breed of giant containerships designed to carry more than 18,000 TEUs and used to transport goods from Asia to northern Europe.

*  *  *

Quite an anology!!
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Online RE

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Shipping Worst since the Vikings
« Reply #26 on: March 03, 2016, 05:35:47 PM »
http://www.zerohedge.com/news/2016-03-03/dry-bulk-ceo-warns-bankruptcy-tsunami-we-havent-seen-market-bad-viking-age

"It Hasn't Been This Bad Since The Viking Age": Dry Bulk CEO Warns Of Bankruptcy Tsunami, Counterparty Risk


[/b][/size]
Submitted by Tyler Durden on 03/03/2016 19:10 -0500

    Baltic Dry

In the past three months we have repeatedly shown that, despite the recent modest rebound off the all time lows, the bottom is about to fall out of the dry bulk shipping market in articles such as these:

    It Is Now Cheaper To Rent A Dry Bulk Tanker Than A Ferrari
    A "Perfect Storm Is Coming" Deutsche Warns As Baltic Dry Falls To New Record Low
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Overnight, the CEO of Dry bulk shipper Golden Ocean Group, Herman Billung spoke before an industry conference in Oslo, and made it clear that our worst-case expectations may prove to be optimistic.

Photo: Golden Ocean Group

He said that Dry Bulk shippers should expect little respite for another two years, adding that an enormous oversupply of vessels isn’t sustainable: "It's a fair assumption to make that only half of the orderbook in 2016 will be delivered."

He warned that "in the coming months there will be a lot of bankruptcies, counterparty risk will be on everybody's lips."

Useful tip: any time a CEO is warning about counterparty risk, it's probably a good idea to listen.

Just to emphasize his point to the local audience he said that "The market has never been this bad before in modern history. We haven't seen a market this bad since the Viking age. This is not sustainable for anybody and will lead to dramatic changes."

Yes, it's that bad.

And what's worse, is that once Billung is proven to be right and the dry bulk bankruptcy tsunami is unleashed sweeping away hundreds of ships with it, the next question will be just which  (mostly European) banks, have the greatest "secured" loan exposure to the dry bulk industry, a sector where we fully expect recoveries on secured loans to be in the pennies on the dollar.
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Offline Palloy

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Re: Official Shipping Collapse Thread
« Reply #27 on: March 03, 2016, 08:05:05 PM »
Quote
... banks, have the greatest "secured" loan exposure to the dry bulk industry, a sector where we fully expect recoveries on secured loans to be in the pennies on the dollar.

Nothing goes downhill faster than a steel-hulled ship at anchor in the sea.  Maintenance is expensive, and compulsory if insurance is to be obtained.  Going into dry dock to have the bottom scrapped and anti-fouled is very expensive.  Getting a ship back into commission after a lay-off is very expensive.  Coming alongside to take on fuel requires certification and insurance.  Never mind recoveries being only pennies on the dollar - owning a ship COSTS money, so there will be NO recoveries.  Cheaper to steam off into the ocean and scuttle them.  Cheapest is to just let them sink at anchor.
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China Ocean Freight Indices Plunge to Record Lows
« Reply #28 on: March 15, 2016, 10:08:06 AM »
Refugee Ships Cheap!

RE

http://wolfstreet.com/2016/03/14/china-ocean-freight-indices-plunge-to-record-lows/

China Ocean Freight Indices Plunge to Record Lows
by Wolf Richter • March 14, 2016   

There’s simply no respite.

Money is leaving China in myriad ways, chasing after overseas assets in near-panic mode. So Anbang Insurance Group, after having already acquired the Waldorf Astoria in Manhattan a year ago for a record $1.95 billion from Hilton Worldwide Holdings, at the time majority-owned by Blackstone, and after having acquired office buildings in New York and Canada, has struck out again.

It agreed to acquire Strategic Hotels & Resorts from Blackstone for a $6.5 billion. The trick? According to Bloomberg’s “people with knowledge of the matter,” Anbang paid $450 million more than Blackstone had paid for it three months ago!

Other Chinese companies have pursued targets in the US, Canada, Europe, and elsewhere with similar disregard for price, after seven years of central-bank driven asset price inflation [read… Desperate “Dumb Money” from China Arrives in the US].

As exports of money from China is flourishing at a stunning pace, exports of goods are deteriorating at an equally stunning pace. February’s 25% plunge in exports was the 11th month of year-over-year declines in 12 months, as global demand for Chinese goods is waning.

And ocean freight rates – the amount it costs to ship containers from China to ports around the world – have plunged to historic lows.

The China Containerized Freight Index (CCFI), published weekly, tracks contractual and spot-market rates for shipping containers from major ports in China to 14 regions around the world. Unlike most Chinese government data, this index reflects the unvarnished reality of the shipping industry in a languishing global economy. For the latest reporting week, the index dropped 4.1% to 705.6, its lowest level ever.

It has plunged 34.4% from the already low levels in February last year and nearly 30% since its inception in 1998 when it was set at 1,000. This is what the ongoing collapse in shipping rates looks like:


China-Containerized-Freight-Index-2016-03-11

The rates dropped for 12 of the 14 routes in the index. They rose in only one, to the Persian Gulf/Red Sea, perhaps in response to the lifting of the sanctions against Iran, and remained flat to Japan. Rates on all other routes dropped, including to Europe (-7.9%), the US West Coast (-3.5%), the US East Coast (-1.0%), or the worst drop, to the Mediterranean (-13.4%).

The Shanghai Containerized Freight Index (SCFI), which is much more volatile than the CCFI, tracks only spot-market rates (not contractual rates) of shipping containers from Shanghai to 15 destinations around the world. It had surged at the end of last year from record lows, as carriers had hoped that rate increases might stick this time and that the worst was over. But rates plunged again in the weeks since, including 6.8% during the last reporting week to 404.2, a new all-time low. The index is now down 62.3% from a year ago:


China-Shanghai-Containerized-Freight-index-2016-03-11

Rates were flat for three routes, but dropped for the other 12 routes, including to Europe, where rates plunged nearly 10% to a ludicrously low $211 per TEU (twenty-foot equivalent container unit). Rates to the US West Coast fell 8.4% to $810 per FEU (forty-foot equivalent container unit). Rates to the East Coast fell 5.2% to $1,710 per FEU. Rates to South America plunged 25.4%.

This crash in shipping rates is a result of two by now typical forces: rampant and still growing overcapacity and lackluster demand.

“Typical” because lackluster demand has been the hallmark of the global economy recently, and the problems of overcapacity have also been occurring in other sectors, including oil & gas and the commodities complex. Overcapacity from coal-mining to steel-making, much of it in state-controlled enterprises, has been dogging China for years and will continue to pose mega-problems well into the future. Overcapacity kills prices, then jobs, and then companies.

The ocean freight industry went on a multi-year binge buying the largest container ships the world has ever seen and smaller ones too. It was led by executives who believed in the central-bank dogma that radical monetary policy will actually stimulate the real economy, and they were trying to prepare for it. And it was made possible by central-bank-blinded yield-chasing investors and giddy bankers. As a result, after years of ballooning capacity, carriers added another 8% in 2015, even while demand for transporting containers across the oceans languished near the flat line, the worst performance since 2009.

“Massive Deterioration,” the CEO of Maersk, a bellwether for global trade, called the phenomenon. Read…  “Worse than 2008”: World’s Largest Container Carrier on the Slowdown in Global Trade
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Offline azozeo

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Re: China Ocean Freight Indices Plunge to Record Lows
« Reply #29 on: March 15, 2016, 02:27:18 PM »
Refugee Ships Cheap!

RE

http://wolfstreet.com/2016/03/14/china-ocean-freight-indices-plunge-to-record-lows/

China Ocean Freight Indices Plunge to Record Lows
by Wolf Richter • March 14, 2016   

There’s simply no respite.

Money is leaving China in myriad ways, chasing after overseas assets in near-panic mode. So Anbang Insurance Group, after having already acquired the Waldorf Astoria in Manhattan a year ago for a record $1.95 billion from Hilton Worldwide Holdings, at the time majority-owned by Blackstone, and after having acquired office buildings in New York and Canada, has struck out again.

It agreed to acquire Strategic Hotels & Resorts from Blackstone for a $6.5 billion. The trick? According to Bloomberg’s “people with knowledge of the matter,” Anbang paid $450 million more than Blackstone had paid for it three months ago!

Other Chinese companies have pursued targets in the US, Canada, Europe, and elsewhere with similar disregard for price, after seven years of central-bank driven asset price inflation [read… Desperate “Dumb Money” from China Arrives in the US].

As exports of money from China is flourishing at a stunning pace, exports of goods are deteriorating at an equally stunning pace. February’s 25% plunge in exports was the 11th month of year-over-year declines in 12 months, as global demand for Chinese goods is waning.

And ocean freight rates – the amount it costs to ship containers from China to ports around the world – have plunged to historic lows.

The China Containerized Freight Index (CCFI), published weekly, tracks contractual and spot-market rates for shipping containers from major ports in China to 14 regions around the world. Unlike most Chinese government data, this index reflects the unvarnished reality of the shipping industry in a languishing global economy. For the latest reporting week, the index dropped 4.1% to 705.6, its lowest level ever.

It has plunged 34.4% from the already low levels in February last year and nearly 30% since its inception in 1998 when it was set at 1,000. This is what the ongoing collapse in shipping rates looks like:


China-Containerized-Freight-Index-2016-03-11

The rates dropped for 12 of the 14 routes in the index. They rose in only one, to the Persian Gulf/Red Sea, perhaps in response to the lifting of the sanctions against Iran, and remained flat to Japan. Rates on all other routes dropped, including to Europe (-7.9%), the US West Coast (-3.5%), the US East Coast (-1.0%), or the worst drop, to the Mediterranean (-13.4%).

The Shanghai Containerized Freight Index (SCFI), which is much more volatile than the CCFI, tracks only spot-market rates (not contractual rates) of shipping containers from Shanghai to 15 destinations around the world. It had surged at the end of last year from record lows, as carriers had hoped that rate increases might stick this time and that the worst was over. But rates plunged again in the weeks since, including 6.8% during the last reporting week to 404.2, a new all-time low. The index is now down 62.3% from a year ago:


China-Shanghai-Containerized-Freight-index-2016-03-11

Rates were flat for three routes, but dropped for the other 12 routes, including to Europe, where rates plunged nearly 10% to a ludicrously low $211 per TEU (twenty-foot equivalent container unit). Rates to the US West Coast fell 8.4% to $810 per FEU (forty-foot equivalent container unit). Rates to the East Coast fell 5.2% to $1,710 per FEU. Rates to South America plunged 25.4%.

This crash in shipping rates is a result of two by now typical forces: rampant and still growing overcapacity and lackluster demand.

“Typical” because lackluster demand has been the hallmark of the global economy recently, and the problems of overcapacity have also been occurring in other sectors, including oil & gas and the commodities complex. Overcapacity from coal-mining to steel-making, much of it in state-controlled enterprises, has been dogging China for years and will continue to pose mega-problems well into the future. Overcapacity kills prices, then jobs, and then companies.

The ocean freight industry went on a multi-year binge buying the largest container ships the world has ever seen and smaller ones too. It was led by executives who believed in the central-bank dogma that radical monetary policy will actually stimulate the real economy, and they were trying to prepare for it. And it was made possible by central-bank-blinded yield-chasing investors and giddy bankers. As a result, after years of ballooning capacity, carriers added another 8% in 2015, even while demand for transporting containers across the oceans languished near the flat line, the worst performance since 2009.

“Massive Deterioration,” the CEO of Maersk, a bellwether for global trade, called the phenomenon. Read…  “Worse than 2008”: World’s Largest Container Carrier on the Slowdown in Global Trade



These ship owners are keeping their fleets at home currently.

http://www.marinetraffic.com/


Gee, I wonder why ?


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