Ship industry talks targeting counter-party credit risk were being held in London Nov. 19 in a bid to stem the slide in dry commodity freight markets and kick-start trade, organizers said.
Bill Lines, spokesman for the Baltic Exchange, the world’s leading maritime marketplace, said the hastily convened talks were being held to restore confidence in the complex global chain of physical freight that had stalled.
“There will be a number of actions, solutions given, to current counter-party risks that will come from this. It’s about a freight market that has collapsed 95 per cent,” Lines said.
Many big players involved in the shipping of dry commodities are unwilling to trade with some parties – fearful of their financial footing.
“Another problem is that there are quite a significant number of players walking away from cargoes at the moment.
“So anyone who has taken cargoes to hedge the vessels they have chartered is now finding themselves with the ship without the cargo to carry,” said Alan Cumming, a broker with London-based freight futures player Freight Investor Services.
The Baltic Exchange’s chief dry sea freight index for global dry commodities trade is at a nine-year low.