CONTAINER shipping rates will only begin to recover towards the end of 2014 despite increases in ship scrapping and slow steaming - because overcapacity is likely to be a dominant factor in this year's market.
That's the prediction from shipping trust Rickmers Maritime, which owns a fleet of containerships on charter, reported Seatrade Communications Limited.
It attributed the weakness in freight rates to the high number of new containerships, most of which are 10,000 TEU and above, due for delivery over the next 12 months, making it unlikely that demand will keep up with supply.
Trade growth is forecast to reach six per cent this year, up from an estimated five per cent growth in 2013. While uncertainty in the global economy remains, there are signs that a recovery in the shipping industry could begin this year, the Singapore-listed shipping trust said.
Rickmers Maritime saw earnings drop by 15 per cent in 2013 to US$23.48 million in 2013 compared to $27.62 million in 2012, largely the result of a $18.4 million non-cash impairment charge booked in the fourth quarter.
Charter revenue for the year remained stable at $143.49 million. The company's owned a fleet of 16 containerships that at the end of 2013 were fully chartered out on fixed-rate time charters.
WORLD SHIPPING
27 February 2014 - 23:07
Overcapacity stalls rate rebound till year's end: Rickmers Maritime
CONTAINER shipping rates will only begin to recover towards the end of 2014 despite increases in ship scrapping and slow steaming - because overcapacity is likely to be a dominant factor in this year's market.
WORLD SHIPPING
27 February 2014 - 23:07
Overcapacity stalls rate rebound till year's end: Rickmers Maritime
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