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Global Trade Just Snapped: Container Freight Rates Plummet 70% In 3 Weeks
"This market is looking like a disaster and the rates are a reflection of that," warns one of the world's largest shipbrokers, but while The Baltic Dry Freight Index gets all the headlines - having collapsed to all-time record lows this week - it is the spefics below that headline that are truly terrifying. At a time of typical seasonal strength for freight and thus global trade around the world, Reuters reports that spot rates for transporting containers from Asia to Northern Europe have crashed a stunning 70% in the last 3 weeks alone. This almost unprecedented divergence from seasonality has only occurred at this scale once before... 2008! "It is looking scary for the market and it doesn’t look like there is going to be any life in the market in the near term."
Baltic Dry at record lows...
And Shanghai Containerized Freight collapsing...
Shipping freight rates for transporting containers from ports in Asia to Northern Europe plunged by 27.9 percent to $295 per 20-foot container (TEU) in the week ending on Friday, one source with access to data from the Shanghai Containerized Freight Index told Reuters.
The drop came after spot freight rates on the world’s busiest route dropped 39.3 percent last week, and the current rates are widely seen as loss-making levels for container shipping companies.
The spot freight rates for transporting containers, carrying anything from flat-screen TVs to sportswear from Asia to Northern Europe, has fallen 70 percent in three weeks.
In the week to Friday, container freight rates fell 22.5 percent from Asia to ports in the Mediterranean, dropped 8.6 percent to ports on the U.S. West Coast and were down 8.0 percent to ports on the U.S. East Coast.
But even more concerning is this collapse is occurring just as the containerized freight industry enters its golden seasonal period...
Now where have we seen this massive unprecedented decoupling before?
Of course the clarion calls of the status quo, everything is awesome, optimists is that this has nothing to with demand but is merely due to over-supply of ships...
Supply has indeed surged...
Source: @M_McDonough
But only thanks to totally manipulated and decoupled-from-reality signals from 'markets' that caused firms to massively mal-invest in building ships for the renaissance of global trade... which never happened...
In fact, as the chart above shows, growth in global trade has been slowing down for some time, as Acting-Man's Pater Tenebrarum notes,
But somewhere between collapsing oil prices, dollar strength, and consumer lethargy the economy’s narrative has drifted off plot. The theme has transitioned from one of renewed growth and recovery to one of recurring sickness and stagnation. Mass malinvestments in U.S. shale oil, Brazilian mines, and Chinese factories and real estate must be reckoned with.
Price adjustments, bankruptcies, and debt restructuring must be painfully worked through like a strawberry picker hunkered over a seemingly endless furrow row of over ripening fruits. Sore backs, burnt necks, and tender fingers are what the over-all economy has in front of it. The U.S. economy is not immune to the global disorder after all.
More evidence is revealed each week that the unexpected is happening. Instead of economic strength and robust growth, economic fundamentals are breaking down. Manufacturing is slowing. Consumer spending is soft. For additional edification, just look at copper, iron ore, or aluminum...
Charts: Bloomberg
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We all had a NIRP'n good time. Ya!
" on the flop", kinda like a Texas Holdem hand, huh?
Ding ding ding.
Play or fold.
One good thing about Obama, he is a typical 'whats in it for me' politician. I have little doubt he will continue into Act 3 according to the script. He will continue to spend without regard to any limitations and we can expect calls from him for increased borrowing (to meet those needs) momentarily.
The hyperinflations of the past will be repeated on cue as governments hide their culpability in the confusion of collapse and call for greater funds to 'help the people'.
We are in the deflationary plateau often seen just prior to active price increases. Look at Argentina 2001. Hyperinflation is just like deflation and depression...just with higher prices. Inflation is an all together different thing.
We are at the threshhold of an enormous event. I'm not having fun but I feel a little better thinking that I understand just how fucked we are.
Well, we know the "investor" class sure as hell ain't gonna write off debts until the last of the prols' blood is drained. Poor fuckers one and all . . . almost all, that is.
My own pain is bad enough. It will suck worse, though, when the very bad shit kicks in; the entire world is gonna be in pain.
What do we need oligarchs for, again? Or their institutions like the Fed?
Hillary will fix it.
She will fix it all.
A interest rate hike by the people at the Marriner Eccles Building makes perfect sense under such conditions!
</sarcasm>
I'm shocked ...
Hasn't looked as bad since Lehman (now there's a word we haven't seen in a while).
Stop that. Vomit now. Stop.
black friday?
Lehman Friday.
One thing dosn't fit the dooms day scenerio.
You measure everything in dollars. What is dollar value? Check how usd_index behaved before 2009.
It was droping down since 2005 till 2009. So with collapse we had huge USD value loss.
What we have now: USD_index is spiking.
USD is getting stronger every day, quite an opposite of what happend in 2008 collapse.
Now we have twice the amount of USD in circulation that we had in 2008 and USD has 100% more value than it had in 2008.
Whole USD currency has value 4 times bigger than it had in 2008.
Don't compare what is now to 2008 becouse it won't be anything like it.
It looks much more similar to what was going on before collapse in 1929
The Federal Reserve dollar "value" is the same... Zero. But it's buying power increased in comparison to other fiat trash that has crashed.
The U.S dollar is valued at about one ounce of silver which converts to about $14 FRN's as of now.... even with manipulation.
Not only to fiat trashes.
You can buy more gold, oil, silver, diamonds, copper, iphones, with same amount of dollars. So it's buying power goes up comparing to everything. You think gold is going down? :) think again.
"It is not the spoon that bends" only usd.
Baltic Index is down .... fewer people are stuffing their kid's stockings with lumps of coal .... you can ship a lot of I-Phones in one container .... the cost of shipping nothing .... remains steady .... at Zero ?
At $300 per container, you pay the tax.
http://www.containerhomeplans.org/2015/07/how-much-does-it-cost-to-trans...
Yeah details elsewhere in the thread.
It's just the preparation for the crash of the financial system, officially triggered by some terrorist attacks in Europe of course - so move along, there is nothing to see here!
Could the decrease in the BDI and container freight rates be due to an increase in the number of ships and decrease in price of oil? What are the numbers for actual cargo shipped? I am tired of hearing doom reports just prior to having to watch markets rip higher.
Yeah... definitely... tremendous glut of containerships... there was a recent ZH post on this re: Maersk. So much of a glut that Maersk elected to decline options for the build of more E-class ships (their monster-sized box ships), several large box ships, and a few small feeder ships. The Maersk CEO claims his company's problems are related to the decline in global commerce. Others say his company's problems are related to poor decision making releated to Maersk's decision to build lots of mega-ships. These big box ships were supposed to be so efficient that they would drive lower-efficiency carriers out of the market. They are reportedly much more efficient, however, he has not been able to crush competition... not sure why.
Carriage costs should move with oil price, so that could explain some of the cost drop.
Another confusing data point: Carriage costs for oil is up because bottoms are being used to store oil which reduces the number of ships available. I can't tell if the oil glut is due to decreased demand or Saudi putting much more onto the market at low cost.
That ought to teach the motherfuckers not to count on the Central Banksters once and for all. Clearly, the bean counters are inept, and incompetent, to count beans for the Central Banks or the shipping industry. Frankly, and this is the last time I am going to warn these mofos, the 'economy' is imploding, and will continue to implode, until there ain't no more economy left for the Central Banksters to fuck over, and screw up.
And every so-called 'Economist' in the entire world is now
anathema, and can lick my boots like the lackies they really are.
Up yours, Geithner, you incompetent ignorant fool.
We will all be Yellenized. End of story.
As I predicted in October 2013 when QE3 was announced, right here on Zerohedge
Yup, I remember and you are still a heroin addict, Right?
I like my Baltic dry with a touch of frizzante.
The Baltic Dry will make you cry
as the World's economies fry.
Stirred, not shaken.
It's all transitory.....
HUGELY BULLISH!!!!!!!!! Must be AT LEAST worth 3000+ points on the Dow monday!!!! But the fucking dip, hurry, before Christmas, at least.
Slumlord owner takes on a new meaning.
Habitat for Humanity builds Shipping Container ...
Japan capsule hotels still hold the market on cost per cubic/ft rental ROI.
Tokyo Capsule Hotel Experience WAO RYU!TV ...
Does this effect Kim Kardashian Trucking?
Not my video, but I did see this truck on I-80 in Wyoming earlier this week. I did a WTF?
https://www.youtube.com/watch?v=dWAomp82Rm8
OMG! Why did I click that link?
Im going to throw a bone out and see if anyone else is noticing this. Call it the "Burned Out Bulb Index", sometime around the last market crap out, like overnite I started noticing vehicles with one burned out headlight everywhere. Well I started noticing it again in the last 4-6 weeks. Spotting them is like shooting fish in a rainbarrel. I even brought it up to a AAA road assist guy and he noticed the same....anyway We SHTF'd
You might be on to something. Also, maybe track the number of vehicles with that red 'tail light repair' tape.
Brilliant spot - seriously.
When consumers start to close their wallets restaurant use, and holding off on expenses can be witnessed through mediums like what you are saying.
That's an interesting observation. Such things are far more revealing than any Government or banker statistics.
The scary part is that fixing a headlight on a normal car isn't that expensive.
However, as a friend of mine used to say, five bucks is a lot of money if you don't have it.
$75.00 us F-350
A parts guy told me when I was buying a 2015 truck that the GMC headlight is C$600 and needs the entire thing changed, not just the bulb. The Chev headlight is a little different and just needs the bulb when burn't out. I don't know if it's true or not...just repeating a rumour just like everyone else on the internet.
The response to my "Burn Out Bulb Bubble Index" is interesting. The dead bulbs are a symptom of a "?". I check my bulbs regularly so as not to be low hanging fruit for Five-O but cant remember the last time I changed a headlight. I have even speculated a connection to magnetic field changes / pole shift.
Something else I notice when entering a new region is abnormal vehicle noises ie ticking squeeling etc and oil stains in parking lots... when they become noticeable in an area you have localized economic concerns. You can put lipstick on a pig but from what I see WE SHTF'd
I just told Mrs Vigor your theory, and she said daughter #2 told her last week, "she cannot believe how many cars are on the road with one headlight right now".
The response to my "Burn Out Bulb Bubble Index" is interesting. The dead bulbs are a symptom of a "?". I check my bulbs regularly so as not to be low hanging fruit for Five-O but cant remember the last time I changed a headlight. I have even speculated a connection to magnetic field changes / pole shift.
Something else I notice when entering a new region is abnormal vehicle noises ie ticking squeeling etc and oil stains in parking lots... when they become noticeable in an area you have localized economic concerns. You can put lipstick on a pig but from what I see WE SHTF'd
I had to take my 2008 Chevy Malibu in to the dealership to replace one of the head light bulbs. You have to remove the front bumper to replace the bulb on the 2008 Chevy Mailbu. I had both bulbs replaced at one time. Mileage 122,000.
Nah, its the laziness/distracted drivers.
Who wants to replace a head lamp bulb when they can check their fakebook page instead.
Bullish for retail sales this Christmas.
/sarc.
The US Navy's new littoral combat ships are so fucking useless as warships that they are putting all that modular empty space inside them to good use to ship cheap Chink-a-ling crap to Americans. This is driving global shipping costs way down.
They also plan to use them to store the glut of excess oil when it hits $20/bbl.
I understand the rates, but I would like to see a report on the volumes in trade on those ships in terms of containers.
The figures are distorted by cheap gas and other things.
Has anyone got figures of actual cubic meters / yards or number of containers?
Logistics is a funny thing. This week I priced shipping 1000 lbs of honey 300 miles. The brokers wanted $500...$100 more than last year.
I trucked it myself, plus added two more smaller orders to other customers, in my pick up truck. The fuel cost $150, that used to cost $250. I charged the customers $400...$100 less than the quote. They gave me a bigger order--actually a huge order. They want a shipping container full for a shipment to Korea. The container price in this story is $295.
that's still $295 more for them, so many containers go back to Asia empty.
China is shipping their cheap crappy honey around the world, and countries like Korea want northern Canadian honey. Last week I had a Chinese buyer want my honey to send to China. The wealthy Chinese consumers want Canadian honey...and are willing to pay a premium
I don't know how this is going to end, but I'll take the premiums while I can get it. Everything is certified cheques, FOB at the farm. I like the Koreans to deal with.
I was looking at honey in the grocery stores last week. Name brands with Chinese honey in small print. The North American kitchen is a dumping ground.
The North American kitchen is a dumping ground.
Ain't that the truth
Janet Yellen helicopter ZIRP monetary rescue crash.
Helicopter Crash - Original HD footage
.
Time to carve your kids cute little toys from sticks that fall out of trees. Sorry about that, big corps. Christmas is still the same without you.
Christmas is Better without you.
Fixed it for you. No charge.
Christmas would be so much better without fascism...and black lies matter...
#BlackFridaysMatter
Holly shit.
I just looked up container volume (actual containers not value) and Jesus, they are fucking crashing.
I mean seriously you can candy coat a lot of things and there are several ways to skin a cat when it comes to interpreting GDP and, inflation and BUllshit signs of an "improving economy" all you want...
But goods to and from countries is tanking everywhere - at a time when it should be exploding.
I am not certain I have ever seen such data that is so troubling.
If they don't print a bucket load of money right the fuck now and get it straight to consumers the other option is a massive depression - massive.
What would they do with the money? Pay people to ship crap around the world? I suppose if you can have nagative interest rates you can have negative freight rates.
When it should be exploding?
LINK or gtfo
Sat in a tree stand while it snowed 5 more inches of snow ! I have had 3 family men from church approach me and ask if I had any "extra" venison . WTH? I have never had people ask me for venison. That is a new measure of something . These are all working men. Lower middle class maybe according to government standards: I don't judge anyone. I will be spending more time in the woods than planned. I can take as many does as I want to spend 15.50 for a tag.
Help others. Look around. Plenty of folks need a hand. I think what is coming will be a whirlwind. It will take most by storm. Be rooted. Be grounded. Walk with some integrity. It will be people of character who save this country when SHTF. I am not a doomsayer. I will not however refuse to look around and see what is coming.
How about if you see something lend a hand. The mirror of your character is the kind of people you allow to be drawn into your life .
ahhh, refreshing to see sanity amongst all the conspiracies here! good post
This is a bad time to be a deer in the woods. They don't fear humans anymore. It'll be easy shooting.
Official NORAD Santa Tracker
In Obama's world Santa Claus is politically incorrect. It offends his Islamic brotherhood relatives.
.
has Santa off-shored production from the North Pole to Mexico or China?
CNBC will claim just the opposite to keep the bull porn going.
Cnbs, fixed it for you
Now it is time for China to devalue Yuan again, thus burn its FX reserves.
#containersmatter
Luv ya
but you have to step it up a bit...
#blackcontainersmatter
Read more on UNIAN:http://www.unian.info/society/1190349-russian-occupied-crimea-in-total-power-blackout.html
So they built too many container ships.
yawn.
do you really believe that cpgone? is that your answer to collapsing trade? wow, yes please do go back to sleep under your rock
LOL. What a complete dumb ass!
All I hear is a dull thud...and that is the world economy hitting rock bottom.
you are either prepared for it or not, it is that simple
Oil Tankers coming to a stand-still in the gulf, container ships winding down, consumption is GRINDING TO A HAULT and the fake numbers wont be able to paper everything over for much longer, eventually people will be questioning the numbers when you have rolling blackouts and no food on the shelves.... the warehouses will be empty and the stock market will be at 20,000 and the media will be shouting recovery while people freeze to death in the winter.
World is going to look like the zombie apocalypse happened lol
Global trade is collapsing for about a decade now for many reasons but all a result pre-programmed global policies of massive pauperization of world societies by 0.1% elitists. TPP, TTIP is another nail to the coffin of working people being bury alive.
More about real superinflation and global trade, facts hidden underneath FEDspeak can be found here:
https://contrarianopinion.wordpress.com/economy-update/
If you do not understand economics,Richard Duncan is a very smart man and describes the current global situation in such an easy way for anyone to comprehend.He doesn't want to see the bubble pop.He gave an interview to CNBC a little while ago but it very relevant to what's coming in December:
https://www.richardduncaneconomics.com/new-cnbc-squawk-box-interview/
Duncan knew the IMF policy because he was in it.
So Ducan knows exactly what the Fed will do.
He was hoping the Fed's printed Ponzi money would go to productive purpose.
Of course the government will just use it for social services.
Will lead to a currency crisis.
Next down: Dow Transportation Index.
On the max chart, it looks like it's topping out
https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF...
So what? This doesn't have anything to do with the manipulation of the prices of stocks, bonds, or commodities.
The entire world is in a global depression. There ain't s h i t going on in the world for demand, except for guns & ammo demand.
bullish
this might explain why the Fed is having an emergency meeting.
but my best guess ... is that a major Hedge Fund or Bank is in trouble again.
They check their physical gold vaults Friday night, and they only found JPM paper IOUs on TP.
So another 1% on the dow for the next day is what you are saying, right? At least .5% I'm sure.
Love the ramp when it happens. It's always so obvious when HLF is going up by multiple % points. Japan we are. Says Yoda. So tell us when this can't happen anymre? lol it'll go forever.
Shit show is getting really old.
I'm too cautiuos to invest and too stupid not to in a hyperinflationary stock market. Really don't want any part anymore. Need to leave this blog.
I have to thank you for the insight. Thank you.
Damn...sold my gold stocks and bought shipping stocks...I guess no Christmas presents for me...
Money created has to be directed to support the vent that contains the debts. Yet we are so far into this magic that the debt monster has a life of its own sucking more monies. As for the other vent (the real economy), it is not delinked in its starvation. The parasites in the first vent (financial economy) primarily the lubricants. The spins remain endless when preys are plentiful. Get It, that there is a a time/age for everything and now is for the escape from Predators and bury what is tangible out of their reach/sight.
Base metal Producers operating outside the U.S. and reporting in non-U.S. local currencies are doing just fine. Canadian copper prices are just fine. Same with Latin America and Asia. "King Dollar" is a fucking joke.
I think it is fairly obvious that nobody want to trade with a Terrorist nation.
Donmeh jew in Turkey do. Israel does. Britain does. Saudi Arabia does.
Only the USA and Russia have the land mass and money to defy the killers.
And some wonder why there are lockdowns in cities by the same people who made this wreck of trade. Terror is the only way for the moneychangers to get you to obey, while they burn down the place,, like a criminal cashing in on insurance: derivatives; jewish lightening.
Let me know when they want more than the $50 billion just given by the U.S. taxpayer to 'Israel ', the fake jews, which the Department of Defense says spies and steals from the U.S. constantly...and I'll sign over nothing for .gov
You are on your own, and if your latest escapade in the Middle East kills U.S servicemen...expect a visit to your house.
ZERO HEDGE YOU ARE ON NOTICE. YOU NOW HAVE SO MANY ADS ON YOUR PAGES IT IS CHOKING THE CACHE AND THE PAGE IS FREEZING. IF IT DOES NOT IMPROVE i WILL NO LONGER VISIT
Mr. Coffee
Shut the ads off on all websites with adblock. It is available free at mozilla.com. Simple to download and install.
If you are reading this Tyler, here's some feedback.
Shut the ads off on all websites with adblock.
I certainly do that for my home computer. At work, where I don't have adminstrative rights, zerohedge often locks up my browser.
The worst is the first time when the site opens and the screen goes dark. Then a box opens up urging me to get email updates. I've learned to go to something else for a few minutes until the site is either navigable or locked up.
I understand the need for revenue. But I question if the quantity of ads have become counterproductive.
The owl is wise Mr. Coffee. I did it a few weeks ago when ZH had become literally unusable, and it worked wonders. Quick and easy too. AdBlock Plus.
https://addons.mozilla.org/en-US/firefox/addon/adblock-plus/
There is no adblock for Microsoft Edge...
you reading Zhedge at work don't bitch about ad's..you find a way to read if you don't like ad's dumbass
probably bitch about ad's watching porn too fresh fish
HAHA... made for a good chuckle this early. Caps lock, AND a threat to not visit this site. Download Adblock plus. No more ads. I did.
I adblock also...no problem-o.
The real reason for all this is Christmas. Obama bin Laden has declared war on Christmas. He was heard recently praying for his 72 virgins. (who can blame him with that wife).
The article is a bunch of BS and fear mongering. They talk about COSTS of shipping and give the impression it's the same as VOLUME.
The VOLUME of goods hasn't decreased much, just the COST of shipping. Just like oil prices have dropped, but the volume hasn't changed.
They even say that it's becasue of over-capacity and not because of decreased trade.
dd
The article is thus not BS or fear mongering, but those who have eyes to see and brains to think.
SHIPPING RATES HAVE DECLINED A WHOPPING 70%...IN THE LAST THREE WEEKS.
Pretty clear that the past few years is the new Normal when it comes to trade and economic growth. All that debt needs to be vomited out before it can be created all over again over the next number of decades.
Things have reached that point where Wylie Coyote just looked down....
What are you talking about, you obvioulsy have NO brains and no clue? They are talking about shipping RATES (which means shipping COSTS) not volumes. The VOLUME of shipping only slipped a couple percent, not 70%.
There is huge overcapacity in shipping, so of course the rates plummeted as more (unneeded) capacity was added.
http://www.polb.com/economics/stats/latest_teus.asp
https://www.portoflosangeles.org/maritime/stats.asp
Interesting figures. The amounts are down in LA, but Long Beach is only down 0.8%. However if you look at the longer term figures, 2014 was a record year compared to previous years.
Also, it looks like they are taking advantage of the low shipping rates to send back empty containers, but exports are also down. The high US dollar is making exports more expensive.
so what fill up pickup with $1.70 gas bought a gallon of milk for 2 bucks life is fuckin good whats with all the bicthin and complainin, doom and gloom about
Wait till UBER hits the trucking industry. you have a package to go to Miami.. trucker is going there anyway, pay cash he's got room on the tail
there's an App for that.. rates slightly higher for illicit goods of course..
But how much CandyCrush will fit in a cargo ship?
contango tankers 2 deserves u right
http://www.marinetraffic.com/en/ais/home/shipid:275366/zoom:10