Monday, December 8, 2008

Car Carriers not hit as hard

Some "high and heavy"

Fred Fry's Maritime Monday at gcaptain finds some good news - At Breakbulk - Car carriers say they'll weather the storm. -
But because of two major factors, carriers could probably absorb a market shrinkage as high as 20 or even 30 percent without having excess capacity, he said.

First, there has been 10 to 15 percent global under-capacity until just recently, so “the first 10 to 15 percent contraction in the market gets us to a balance in supply and demand,” Connor said.

Second, carriers have operated some vessels beyond their normal economic life — about 25 years for most ships — in order to minimize the capacity shortage, he said. “Now they can be recycled. That’s a nice word for ‘scrapped,’” he said.
I can vouch for the under capacity, the 6000 unit ship I just got off was running full speed in spite of the spike the price of fuel. We were also kept on a tight schedule with full loads, particularly Europe to the Middle East.

With luck the current slowdown won't hurt the car ships too bad.


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