Why Shippers Hate Recessions, But Love Crises
A spike in rates provides a short-term boost to the maritime industry, but there are bigger geopolitical factors at play.
Good in a crisis.
Photographer: Jeppe Boje Nielsen/BloombergGlobal shippers are enjoying a sudden boom in rates, especially in moving raw commodities like iron ore and crude oil. Any improvement would be welcome news for a fleet that’s been suffering since Covid-19 receded and demand returned to pre-pandemic levels. History suggests that no turnaround is near — it is likely these latest spikes are merely the result of short-term shocks and cannot be sustained.
Indices that track the cost of moving oil and bulk goods have posted big gains over the past few weeks. The Baltic Dry Index, the most-widely followed gauge of prices to ship dry goods like coal and iron ore, has almost doubled since the start of September. The Baltic Dirty Tanker Index, its crude oil counterpart, is up 50% this month.