How have shipping rates developed as per the recession?

The timing of the current recession could not be worse for the shipping industry. Booming market conditions in recent years led to an ordering boom, being delivered as of 2009. At the same time, demand for shipping services plummeted. As a result, shipping rates dropped strongly, particularly for large bulk carriers and container vessels.

Volatility in shipping rates is in our view high at dry cargo (Capesize up to handy-size bulk carriers), containers, and offshore. Rate fluctuations are more moderate at the transportation of liquids (crude oil, products, chemicals, LPG) and at multi-purpose (except for the last few months), and low at specialized reefers.

Compared with the volatile shipping rates, the new build price of vessels is relatively stable despite of the booming order intake in recent years. The fluctuations of the steel price seems to have a larger impact