Toro's Running of the Bulls Market Blog

Shipping Rates Hit Zero

From The Telegraph

"They have already hit zero," said Charles de Trenck, a broker at Transport Trackers in Hong Kong. "We have seen trade activity fall off a cliff. Asia-Europe is an unmit­igated disaster."

Shipping journal Lloyd's List said brokers in Singapore are now waiving fees for containers travelling from South China, charging only for the minimal "bunker" costs. Container fees from North Asia have dropped $200, taking them below operating cost. 

Mr de Trenck predicts Asian trade to the US will fall 7pc this year. To Europe he estimates a drop of 9pc – possibly 12pc. Trade flows grow 8pc in an average year.

He said it was "illogical" for shippers to offer zero rates, but they do whatever they can to survive in a highly cyclical market.

Offering slots for free is akin to an airline giving away spare seats for nothing in the hope of making something from meals and fees.

It looks like one will soon be able to buy tankers real cheap.

The US Airline Industry - RIP

From The Fox Street Journal.

The chief culprit of the current woes is a fuel bill [for the airline industry] that could total $60 billion this year -- a remarkable $18 billion to $20 billion higher than it was last year. The industry earned just $3.8 billion in net profit last year.

This is simply untenable.

Airline ticket prices are going up.