An oversupply of vessels may obstruct a recovery of the shipping industry, putting pressure on freight rates, Moody’s Investors Service said in a report.

Ships currently on order to be built make up about 60 percent of the existing fleet for dry bulk carriers, or those that transport iron ore, coal and grains, 30 percent for tankers and 40 percent for container vessels, Marco Vetulli, a vice president for the US ratings agency, said in a report e-mailed Wednesday.

“Modest gross domestic product growth globally will help volumes in the dry bulk and tanker segments,” Vetulli said. “However, freight rates are likely to remain under pressure, especially for dry bulk.”

New ships were delivered at a record pace during one of the world’s worst recessions because orders for the vessels were placed when global trade in commodities boomed in 2007-08, led by China, India and Australia. The Baltic Dry Index, a measure of shipping costs for commodities, has plunged to 2,711 on Feb. 25 from 11,793 in May 2008.

Shipping finance will remain “tight” and banks will stay selective in disbursing loans, Moody’s said.
Order books for the tanker segment at the end of 2009 represented about 132 million deadweight tons, or about 30 percent of the current fleet on the water at 432 million deadweight tons, Moody’s said. About 27 percent of the new orders are expected to be delivered in 2010 and 2011.

Weakening freight rates and constraints on bank financing are forcing tanker owners to delay or cancel their orders, Moody’s said. Clarkson Research Services estimates that about 25 percent of the vessels originally scheduled for delivery in 2009 have not been delivered, and this trend could continue in 2010, according to the report.

“Rates in 2010 will be stronger than in 2009, although they will remain well below their long-term averages,” Vetulli said. “Recovery will be slow and the healthy earnings reported by tanker companies in the 2000s will remain elusive for many years.”

Oversupply in the dry bulk segment may be mitigated by stable Chinese demand, port congestion and scrapping of old vessels, Moody’s said.

The slippage rate was 36 percent for bulk carriers with 385 actual deliveries versus 602 scheduled as of end-October 2009, Moody’s said. The number of delivery delays may accelerate this year, it said.

Slippage implies a renegotiation of a contract to deliver a ship that may result in delivery postponement and cancellation. (Bloomberg)