Britain To Build A ‘National Flagship’ To Promote Maritime Trade
by Alistair Smout (Reuters) – Britain is to build a new flagship to promote its business and trade interests around the world, the government said on Saturday, in a move it...
June 3 (Bloomberg) — A freight trader operating more than 40 vessels offered to lease ships for no charter income and pay toward fuel costs as the biggest fleet glut in at least two decades spurs the longest rout in rates since 2005.
GMI Resources U.K. LLP is willing to contribute $2,000 a day to take Australian or Indonesian coal on a Panamax ship to Atlantic buyers, Steve Rodley, the company’s London-based co- chairman, said by phone today. The equivalent route was assessed at $32 today and it was last lower than minus $2,000 in October. Alternatives include staying in Asia or sailing without cargo to South America to seek grains, he said.
Rates for Panamaxes globally slumped 1.2 percent to $6,252 a day today, according to data from the Baltic Exchange, a publisher of freight prices on more than 50 maritime routes. Today’s decline is the 28th in a row, the longest reversal since one ended August 2005. The fleet expanded more than 50 percent in the past five years, when rates were as much as 14 times higher than now, the bourse’s data show.
“It’s a result of chronic over-ordering of ships,” Rodley said, adding that the vessel surplus is “comfortably” the biggest since he joined the industry in 1994. “Demand has not kept pace.”
A Panamax burns 27 tons of fuel daily at 12 knots, meaning it’s unfeasible to sail without cargo to Europe from Asia, Rodley said. Fuel costs about $600 a ton today, according to data compiled by Bloomberg from 25 ports worldwide. GMI can profit by subsidizing the voyage if vessel earnings in the Atlantic are high enough to compensate for the loss.
Panamaxes needed $6,606 daily in 2011 to cover operating costs including crew and repairs, according to the most recent data from Moore Stephens LLP, a London-based accountant that tracks industry expenses.
Three of the four vessel classes tracked by the Baltic Exchange declined today. Capesizes, which have about twice the capacity of Panamaxes, fell 0.08 percent to $5,167 a day. Handysizes, the smallest tracked, slid 0.7 percent to $7,847. The only vessel class to gain was Supramaxes, which rose 0.3 percent to $9,132.
– Alaric Nightingale, Copyright 2013 Bloomberg.
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