Shipping rates could be fragile ‘for years’

A slowdown in global trade growth combined with anticipated expansion of the available shipping fleet could mean the downturn in the shipping markets could last beyond 2025, according to a consultant.

The tanker segment is likely to recover sooner, but bulkers and container liners could suffer from overcapacity for many years to come, according to Robin Meech, managing director of Marine & Energy Consulting.His predictions follow analysis of the anticipated increase of available tonnage in the world fleet up to 2025 versus possible growth in trade ranging from 3-5% per year.Meech analysed an index based on available shipping tonnage for all tankers, bulkers and liners as of 1/1/2008. He made a baseline for each segment to demonstrate the expected growth in the fleets based on newbuild orders, taking recent significant increases in cancellations, delays and scrapping into account.He then plotted the capacity increase for each segment against simple possible growth in trade from the start of 2008 at 3%, 4%, 5% per annum. The analysis assumed that there was approximate supply/demand balance for the three types of vessel at the beginning of 2008.

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