03 May 2013 15:13 [Source: ICIS news]
LONDON (ICIS)--European shipping routes are experiencing an oversupply of vessel space, as the average volume and frequency of cargoes has decreased, sources said on Friday.
Furthermore, the cessation of ice-class requirements in the Baltic Sea in April has freed up many vessels, increasing the total volume of tonnage available in Europe.
While some sources were optimistic that the current decrease in enquiries was related to various regional holidays over the past two weeks, others took a more a negative view and considered the situation to be part of a longer-term trend.
One broker went so far as to suggest the market had never recovered from a summer-season downturn that began in July 2012.
However, despite the increase in available tonnage, there has been no clear decrease in freight rates.
A broker explained that because cargoes have tended towards a smaller size, vessels must carry combination cargoes to make trips worthwhile. This makes organising the full loading of a vessel more complicated and increases the rigidity of the dates during which a vessel can load.
The decrease in cargo size and volume has not only impacted the spot market. Operators dealing with contractual business are also seeing a decrease, and as such are struggling to find additional cargoes to fill up vessels.
One broker estimated that regular cargoes that were traditionally 3,000-4,000 tonnes in size have decreased by 30-50%.
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