Excellent article in the Wall st Journal regarding some of the big issues facing dry bulk shipping rates going into 2010.
Freight rates are subject to supply and demand - we know that. What many people outside shipping dont realise is that there are a number of unusual factors that are skewing freight rates.
1. Port congestion is still a huge problem. Most shipowners acknowledge that if the world ports worked efficiently the market would be halved. Port congestion takes ships out of the market and thus limits supply.
2. New Ships coming on stream. The subject of the attached article. New ships (all built during the boom) will increase supply and possibly kill the market.
3. Chinese governement stimulus packages. How long can this go on?
Imagine if we had lots of new ships, leess congestion and a chinese recession? Then again lets not.
- The Virtual Shipbroker
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