Shipping rates hit zero as trade sinks

[Donnachaidh]

http://www.telegraph.co.uk/finance/4229198/Shipping-rates-hit-zero-as-trade-sinks.html

Freight rates for containers shipped from Asia to Europe have fallen to zero for the first time since records began, underscoring the dramatic collapse in trade since the world economy buckled in October.

"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.

Industry sources said they have never seen rates fall so low. "This is a whole new ball game," said one trader.


MORE at the link above --

[CoffeeCat]

1. Could the info in the OP, be the reason behind...

...the problems that stores, such as Target, are having. They can't get product into the stores to fill the shelves.

It sounds like the Target pipeline is working. They're ordering product. However, it's not being delivered.

This is an incredibly compelling real-life example of what is going on in retail...written by a DUer, who is
experiencing this first hand. We rarely get such a glimpse of what is really happening.

Here's part of his post. More at link: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4828061

-----------------------------------------


"This year so far has been a joke. I work at a multi-billion dollar retailer and I can not even get product from our distribution centers anymore for the departments I manage. I am talking the little product that we KNOW will sell at least some what. I try to order more on the PDA every day because 50% of electronics, toys, sporting goods, seasonal is blown. Distribution center sends a date saying I'll get the product on the 11th. It's now the 14th and I've gotten 5% of what I tried to get in.

I send an email up to corporate escalating the instock issue. The response? Essentially "you are shit out of luck because the distribution centers can't get it to send to you".

To make it even more nuts... we just set our new line of seasonal product this last week. The company just sent direction to EVERY STORE to immediately activate clerance prices of 30% on all of it. I have never EVER EVER EVER EVER in my years working retail at this company seen that happen before. We NEVER do that. The product was already marked down a HUGE percentage from what it was last year.

To make matters worse all that mark down has resulted in ZERO sales increase. Wonderful."

[Hawkowl]

4. THIS is the credit crisis

This is the real manifestation of the credit crisis. All these businesses depend upon credit guarantees from financial institutions to both purchase and insure goods for resale. No credit-No purchase-No shipping-No retail sales.

The banks are still insolvent and hiding their bad assets and true losses. Until the banking industry gets sent to the woodshed or waterboarded and straightened out, the economy CAN'T recover. It is just impossible. This is another reason why it will get worse before it gets better. Obama really has only one chance to set this right before he runs a real risk of a self perpetuating deflationary cycle and semi-permanent liquidity trap.

[tosh]

5. And so the dreaded shortages begin.

It is one thing to read of and imagine the spiral, quite another to actually see it.

[CoffeeCat]

6. I suppose you're right...

We heard there was a credit crisis, but at the time, I don't think most people understood
what that meant.

People rarely mention a "credit crisis" anymore. I think most people do not understand
the macro-ramifications of what this means.

Like you said, it's happening. These overseas businesses are no longer willing to extend credit to
American businesses. I've been watching the Baltic Dry Index drop like a hot rock.

You know what this feels like? A rising river that you just sit and watch for a long time. You're not sure
what's going to happen. You know it isn't good, but you hope that the water will crest and then drop. Right
now it feels like the waters have risen and are spilling out of the river banks and it's apparent that
waters are coming toward us.

If Target truly is unable to get product and fill shelves, due to this credit crisis--then this is serious...so very serious.
Wouldn't you agree? Because if this is happening to Target, then it's happening to many retail outlets. Target
is a multi-billion dollar corporation. If they're having problem getting credit, then many others are too.

Interesting that we know about this--due to the OP/employee who is talking about this. However, not a damn word
from the media. They're mum--while the waters swirl down our streets.

Another important question to ask is...If Target is unable to get "credit" to obtain product to fill their shelves--are
they having a cash-flow problem? Do they have NO money to purchase new product? From what the OP says, product on
the shelves now--is NOT moving; not even with an additional "30 percent off clearance items" promotion. This could
indicate that they have no money to buy additional product--but I'm not sure.

Possibly their inability to get product is simply due to the credit situation freezing up.

You never really believe that the river is going to rise up and engulf YOUR living room. It sure seems as though
America's living room is going to be filled with raging waters fairly soon.

This is not a good sign. That's why I'm interested in what this employee has to say, because it is such good
and valuable information that we are not getting from the MSM.

[dixiegrrrrl]

7. How do we know it is Target mentioned in Twixvoy's post?

I am very supportive of keeping his/her ID quiet, since in previous posts TVoy has repeatedly stated concern over being identified and suffering job loss, while at the same time the information in the posts is very important to us.
I just sent T.Voy a pm in support of him/her writing more and my willingness to not try to ID the store.
We know it is one of 3 largest ones, I am happy leaving it at that.

and yes, the Baltic Dry Index has been crashing for some months now, kudos to those DU people who introduced me to the name and existence of it.

All together many rising rivers of concerns...

[ayeshahaqqiqa]

2. We are not experiencing problems--yet

We sell supplements out of our clinic. Shipping rates are far from zero--in fact, they have gone up! But we get product in a timely manner--maybe because it is health related and made in the
USA by and large?

[Greyhound]

3. This is the hard evidence that the system has collapsed. We must

institute a currency system based on assets, production, something that exists. Fiat currencies will and have always failed.