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Costs of bulk transport by sea are skyrocketing
It is not only sea container transport that has risen sharply in price in the past year. Transport of dry bulk products has also become considerably more expensive in recent months. This increase is due to additional trading in the currently volatile commodity market. At the same time, shipping companies are investing less in new ships.
The Baltic Exchange's main sea freight index – one of the most important measures of the transport costs of products such as grain, fertilizer and coal – has skyrocketed since February and is at its highest level in 11 years. According to experts, the capacity of the dry bulk fleet is not growing sufficiently in line with the increasing demand. Capacity is expected to grow by 2,0% this year and 0,8% in 2022. By comparison, growth was 2019% and 2020% in 4,1 and 3,2, respectively, according to data from market analysis firm Refinitiv.
Uncertain requirements
"We will not see the extra orders for new ships this year that we would otherwise see if transport prices rise," Jan Dieleman, director of Cargill's maritime division, told Reuters news agency. It takes an average of 3 years from placing the order until the new vessel is delivered. The service life is usually more than 20 years. According to experts, what plays a role is the discussion about the reduction of CO2 emissions and climate-neutral shipping. Shipowners are not quite sure what the requirements for ships will be in 10 or 20 years' time. That is why they are cautious about investing.
Jurphaas Lugtenburg
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