Conditions in the global shipping business are enough to make the toughest sailor seasick: a glut of new ships, financiers who've stopped issuing letters of credit and shipping rates that have plunged so low that some container ships are tied up at ports.
The ripple effects are many and could include fewer bargain-priced electronics and other consumer goods at your local department store in coming months.
"Basically, people are afraid to lend," says George Stalk, a senior partner with the Boston Consulting Group in Toronto. "The flight to quality is so great that letters of credit appear to be right up there with subprime mortgages."
With banks reluctant to issue letters of credit - bank-backed guarantees that smooth the flow of goods between importers and exporters - all but the biggest and most established exporters are finding it tough to ship their wares.
"What it could mean is that some products could be harder to get," Mr. Stalk said. "The availability of lower-cost, lower-priced goods is at risk."
Morley Strachan doesn't know what's in the thousands of containers handled by Vancouver-based TSI Terminal Systems, and so can't speculate whether there will be fewer flat-screen televisions heading to retailers' shelves.
But he knows TSI is handling fewer containers at its two terminals: Deltaport, at Roberts Bank south of Vancouver, and Lynnterm, in Vancouver's inner harbour.
"We have seen a drop in imports," said Mr. Strachan, executive vice-president of TSI. "There is less than anticipated for this time of year."
As consumer demand slows or threatens to slow, Canadian importers are cutting orders of goods from overseas, resulting in fewer containers landing at terminal docks.
On the export side, a slowdown in China's formerly red-hot economy means less demand for commodities, such as wood pulp, sometimes shipped in containers.
In yet another ripple effect, slowing consumer demand in North America for televisions, hair dryers and running shoes means a corresponding drop in demand for pulp from North American trees, because manufacturers need fewer boxes for packaging.
Containers are still moving on both export and import routes and the slowdown at Canadian ports is not as pronounced as it is in the United States, Mr. Strachan said.
"They have pneumonia; we have a cold."
On the bulk-shipping side of the business, rates for shipping commodities such as coal, ore, grains and building materials have plummeted.
The Baltic Dry Index, which tracks the cost of shipping bulk goods by sea, is at its lowest level in nearly a decade, resulting in some ship owners "laying up" ships rather than operate them at a loss, and cargo piling up at ports.
Lower shipping rates can be an advantage for some. As rates tumble, Canadian wheat headed for Asia becomes more competitive with grain from Australia, said David Przednowek, senior manager for ocean freight with the Canadian Wheat Board.
"Compared with where we were previously, it's a lot cheaper to ship goods from where we were even a couple of weeks ago," Mr. Przednowek said.
The shipping sector in general is plagued by a self-destructive pattern of overspending and collapse that was masked in recent years by China's economic boom, Mr. Stalk said. Now that growth in China has tempered, the familiar cycle is back, this time aggravated by a global financial crisis that has skittish lenders battening down the hatches.
"The advent of China in the last decade looked like it broke the shipping cycle," Mr. Stalk said. "So people forgot about it. But it's always been there."
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