The widely reported letter of credit (L/C) shortage may be easing according to a report from Australia.

But according to some shipping services providers, L/Cs are no longer available and some marine services companies are demanding cash up front from customers.

Optimism

According to the CEO of Australia's Dampier Port Authority, Steve Lewis, shipping is returning to normal, following a period during October and November last year when some vessels struggled to get credit because of the global financial crisis.

Rio Tinto reportedly turned away around 20 vessels from Dampier in that period because the ships did not have acceptable L/Cs.

Caution

Marine services executives elsewhere, however, remain very cautious. According to Inchcape Shipping Services chief executive Claus Hyldager, the banks are "still not open for business" as far as issuing L/Cs is concerned.

Marine services provider ISS meanwhile is reportedly demanding cash payments in advance from ship owners rather than risk having to untangle credit arrangements should a ship owner or charterer collapse.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.