Australian distributors and vendors who are expecting their biggest shipments of the year over the next two months have told ChannelNews that they are aware of the problem but are still waiting on shipping advice from their parent Companies or overseas vendors.

Alan Kohler of the ABC and a writer for Business Spectator said that he was alerted to this by TJ Marta, of RBC Capital Market's New York-based fixed income strategist on the weekend, during an interview for the ABC's Inside Business program.

He said that the Baltic Dry Index of bulk shipping rates has collapsed by 89 per cent – from 12,000 in May to 1355 last night. In October alone it has fallen 61 per cent.

In his column in the London Telegraph last night, Ambrose Evans-Pritchard wrote that he believed shipping was now slowing as fast as it did in late 1931.

The Business Spectator went on to say that Khalid Hashim, managing director of Precious Shipping, Thailand's second-largest shipping company, was quoted in the Taiwan News yesterday as saying: "Letters of credit and the credit lines for trade currently are frozen. Nothing is moving because the trader doesn't want to take the risk of putting cargo on the boat and finding that nobody can pay."

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