High Shipping Costs Are Here to Stay, Says Bloomberg
By Henry Ren (Bloomberg) Stubbornly high shipping expenses for businesses are getting sealed into contracts for the next 12 months, forcing companies to pass the extra costs on to consumers....
The index climbed 1.1 percent to 751, according to the London-based Baltic Exchange, an assessor of freight costs. Average hire costs for Panamax ships, which comprise about 26 percent of the dry-bulk fleet’s capacity and are the largest to transit the Panama Canal, climbed 5.3 percent to $5,978 daily.Panamax ships booked for trans-Atlantic voyages gained the most since Nov. 20, rising 7.3 percent to $7,183 daily.
“We witnessed a busy day in the Atlantic with many fresh inquiries entering the market especially out of east coast South America,” ICAP Shipping International Ltd., a London-based shipbroker, said in an e-mailed report yesterday.
The Baltic Dry Index has risen 7.4 percent this year after it averaged the lowest in 26 years in 2012 as slowing global demand for seaborne commodities and record deliveries of new vessels from shipyards in Asia depressed vessel earnings below break-even levels.
Average hire costs for Capesize vessels, the largest tracked by the index, declined 1 percent to $6,123 daily, ending a five-day advance, exchange data show. Supramax vessels, which carry about two-thirds less than Capesizes, advanced 0.3 percent to $7,773 daily, while Handysizes, the smallest in the gauge, were unchanged at $6,586, according to the exchange.
The fleet of 2,270 Panamaxes represents 177.4 million deadweight tons, from the 687.2 million-ton capacity of the four ship types tracked by the exchange, according to data from Clarkson Plc, the biggest shipbroker.
Capesizes, which averaged $7,680 daily in 2012, needed $16,400 to break even, according to Pareto Securities AS. Panamaxes, which averaged $7,684 last year, need to earn $12,000 to cover operating costs, excluding fuel, and repay loans, according to the Oslo-based investment bank.
– Michelle Wiese Bockmann, Copyright 2013 Bloomberg.
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