The economic slowdown in China and the effects of rapid expansion through cheap debts has put the shipping industry in its worst crisis ever.
The Baltic Dry Index fell by more than 20% this year lowest level since 1985. This gives the real picture of the world’s financial fortunes. Debt repayment is now a big question in shipping that is still damaged by the zombie fleet.
A zombie ship is one that can just about repay interest on its debts but has no hope of repaying the capital.
- The Baltic Exchange has set shipping rates for more than 2 ½ centuries.
- Global economy have seen the Baltic Dry Index fall by more than 20% this year, to 369.
- Immediate problem has been the slowing of the Chinese economy.
- The world fleet doubled in size from 2010 to 2013.
- The world shipping fleet is drowning in debt.
- The glut of oil on world markets has led to one of the busiest tanker markets for years.
“Ship owners and people who are still in the market presumably still think there is hope, and that the market turnaround will come before they are completely desperate,” Penn said.
“But there is widespread depression in the market at the moment.”