Are Israel's manufacturers slamming on the brakes? Yes, according to Gad Schaefer, chairman of the Israel Shippers Council.

Many industrial manufacturers have been halting shipments to Israel because of the drastic drop in local purchasing power, Schaefer said yesterday. From conversations with shipping companies, Schaefer said, he learned that industrialists have asked to cancel shipments already ordered, mainly of raw materials. The phenomenon is significant, he added.

The global financial crisis has made it harder for companies to borrow money to develop. Demand is expected to diminish, here and around the world - and companies are preparing ahead of the slowdown, by scaling back their investments, including in raw materials, Schaefer says. The upshot is that they're canceling shipments.

The global shipping index has been hit hard, and a global economic slowdown would indeed change the face of maritime transport to and from Israel. The Zim shipping company, which belongs to Israel Corporation, has been turning Haifa into its home port - but foreign shippers are planning to stop sailing to Haifa for efficiency reasons, Schaefer says.

From May 2008, the maritime transport index has fallen by about 90%. The index is considered a benchmark of demand for commodities. In Asia, the value of shipping companies has dropped by half and more, on fears that client companies might go bankrupt.

In response, shipping companies have begun to collaborate in order to cut costs, or are simply anchoring their ships. If ships to Israel can't be filled, they won't come. Large ships that had used Israeli ports will simply turn other areas into their "home ports," and transfer cargo to Israel on smaller boats. That, says Schaefer, will delay Israel's foreign trade by at least a week and increase costs for local companies.