LONDON: Sea freight transport, the lifeblood of trade and a bellwether of the global economy, has been blown off course by the new corona virus, sparking general alarm. As analysts pore over charts to gauge just how badly Chinese mega-factories have been hit, figures provided by cargo ship traffic paint a gloomy picture.
The Baltic Dry Index (BDI) reflects the daily price of moving goods such as coal, rice and wheat along routes deemed representative of the global market. Some call it the canary in the coal mine for the economic world.
The BDI has now reached lows last seen in early 2016, when the shipping sector was suffering a supply and demand imbalance in the wake of the 2008-09 global economic crisis. Its "capesize" index for the largest category of ships -- ones that cannot even squeeze through the Suez or Panama Canals -- is at historic lows.
"The latest slump is directly related to the coronavirus epidemic in China and the subsequent restrictions on activity," London's Capital Economics consultancy said in a research note.
"Given that China accounts for about 40% of global seaborne trade, it is not so surprising that freight rates have tanked."
Lars Bastian Ostereng, an analyst with Norway's Arctic Securities, said the outbreak "basically led to full stops in many ports in China".
