The freight rates for shipping lines are dropping despite record rise in commodity prices. Leasing costs for capesizes, 1000-foot-plus ships, which haul iron ore and coal may go down 34% to their lowest prices since 2002 in the present year as per a survey conducted by Bloomberg.
MV Berge Athene, a capesize bulk carrier of 225,200 DWT.
A daily average of $22,000 is expected for ships in 2011 as 200 new ships are due to leave shipyards during the year. The extra ships will lead to a surplus in vessels that will lead to lower shipping charges. The Baltic Dry Index also has been dropping steadily since the end of October 2010 adding to the woes of the shipping companies.
The Round Table of International Shipping Associations has announced that the slump in rates was being caused by a vessel surplus and not a contracting world economy.
As of now shipping moves 90% of the global trade. There is an expected 2 billion metric tons of dry and wet trade available in the coming year. So clearly the facts support the theory.