Update On The Baltic Dry Index

Time to update the BDI.

My last posting on BDI: Sesa: The Market Is Stabilizing

• Yeah, as mention in the posting, Baltic Dry Index Stages Strong Rebound ( see also Baltic Dry Index May Surge More Than 80 Percent! ).

Here's an interesting article: Shipping firms to raise freight rates to cover loss

• By Sunil Kumar Singh on Monday, November 09, 2009
  
  A few shipping lines carrying cargo from the Middle East are expected to raise freight rates in the next few months to cover losses suffered by the slowdown this year, said industry analysts.
  
  On November 2, Maersk Line, one of the biggest global shipping companies, announced a rate increase from November 15 for dry cargo going from South Asia and the Middle East to European destinations.
  
  "Trading conditions for carriers operating in these markets are still subject to unacceptable rate levels and the situation is unsustainable in the longer term. The rate increase is necessary to continue to operate our services with the high level of reliability our customers have come to expect from Maersk Line," Maersk Line said in a press release.
  
  Industry players in the shipping and logistics sector do not rule out the possibility of upward freight revision by other shipping lines in the coming months.
  
  "Shipping cargo rates have already reached their bottom this year, and there is a greater possibility that many other shipping lines in the region will revise their freight rates in the coming months," said Shankar Subramoniam, General Manager for the UAE at Clarion Shipping.
  
  However, the rate increase does not mean the volume of cargo movement is rising or there is a significant spurt in demand from overseas markets, said industry players. On the contrary, carriers may just cash in on the coming festive months and apply the rate increases to improve their freight earnings.
  
  "November to March is generally the peak season for shipping lines, because of Christmas, New Year and other festivities. Therefore, seaborne freight rate increase during this period is more of a seasonal factor than an evidence of a significant economic recovery and a rebound in cargo movement to earlier levels," Subramoniam told Emirates Business.
  
  Biji Thomas, Transport Manager at Schneider Electric FZE, Dubai, said: "Some shipping lines are increasing freight rates as they are trying to cover the losses suffered this year due to lower cargo volumes.
  
  "However, this is just a temporary measure.
  
  "If the cargo volumes go down further, which is quite expected because of the current lean season, we may see an increase in shipping freight rates as many carriers are downsizing and cutting down their operating expenditure."
  
  Different shipping lines charge different freight rates depending on the origin and destination of the cargo.
  
  However, Baltic Dry Index, a bellwether index for the cost of shipping dry bulk globally, has dived sharply from its peak last year, as economic slowdowns in major economies has led to a significant drop in demand for dry cargo globally.
  
  London-based Drewry Shipping Consultants, in its insight into the dry bulk shipping market for the month of October, also noted: "Europe and Japan witnessed stronger iron ore demand over the month, but it was seen mainly as a temporary restocking phase rather than an upturn in market sentiments. It also phased out as the month came to a close."