GENEVA (Dow Jones)–The newbuild delivery of panamax vessels is expected to continue well into 2013, keeping a lid on sea-borne freight rates, Tom Cutler, Analyst at SwissMarine said at a conference in Geneva.
Excess shipbuilding capacity has grown each year since 2009 by 25%, and is a painful process to reverse, Cutler said.
Panamax vessels traditionally haul dry bulk cargo–such as coal, grains and iron ore–and are mostly 70,000-75,000 deadweight tonnes.
Dry bulk freight rates have fallen in recent months as slower demand triggered by economic concerns and vessel oversupply took their toll on shipping rates.
“Long-term recovery in freight is only possible if ship owners exercise restraint with new buildings,” Cutler said.
-By Neena Rai, Dow Jones Newswires