There are countless methods entrepreneurs and investors use to gauge their decisions and make informed choices regarding their investments. Although the use of some of these informational tools may not affect the decisions of every business owner, there are some systems such as the Baltic Dry Index that can provide a useful glimpse into the global trade economy.<\/p>\n
The Baltic Dry Index<\/a> is an amalgamation of shipping costs calculated by international shipping brokers.\u00a0It is seen by many investors and stock traders as an economic barometer, informing their financial decisions by providing information on the strength of demand for global trade. The index provides a sense of the global economy\u2019s pulse, contrasting the amount of cargo space on shipping vessels with the demand for that space. Because new ships are a substantial investment, there are very few built every year, and therefore the amount of cargo space remains relatively static. The BDI contrasts the (mostly unvarying) variable of cargo space with its demand. Throughout history, the BDI has fluctuated significantly<\/a>. For example, in 2008 the Baltic Dry Index fell over 90%, from its all-time high of over 11,000 to less than 700.\u00a0Although it has rebounded since then, it hasn\u2019t come close to its pre-2008 numbers. This year, it dipped to a new all-time low, indicating that shipping demand must have dropped considerably from years past.<\/p>\n