Falling Baltic Freight Indices.

There are more ships out there plying the oceans these days, larger and more efficient ones than the ships they were  supposed to replace.  According to Drewry's, since the number of ships have risen, tonnage supply grew by more than 14% in 2010 and will probably at least grow by that sum this year, when the year is over. 


"At the end of the first quarter of 2010 the global fleet was just over 470 million dwt and at the end of the 1st quarter of this year it was 550 million dwt!!!..."


What the ships can earn has plunged. Two weeks ago, there was a 20% increase in Baltic freight indices which was insignificant given the low levels to which rates has fallen. 


Let‘s look at the decline, stunning indeed. For example, back in ’07, the  average day rate over the course of the year for Capesize ships was nearly $115 thousand; which has fallen to less than $10 thousand this year!  Back in ’07, the average day rate for Panamax ships was approximately $55 thousand/day; which is now down to $12 thousand/day.  Supramax ships earned, approximately $47 thousand/day on average in ’07; now they earn $12 thousand/day. Handysize ships earned just a bit more than $30 thousand daily; now they are barely earn $10 thousand/day.