Fall in hire rates anchors more ships

Supertanker owners are leaving more ships at anchor after rising fuel costs and the biggest weekly slump in hire rates for at least a decade made it less attractive to deliver cargo.

The number of very large crude carriers, or VLCCs, at anchor climbed to 91 yesterday from 82 on Saturday, according to AISLive ship-tracking data compiled by Bloomberg. The overall average speed of the global fleet fell 1.7 per cent to 9.65 knots.

The benchmark hire rate, for cargoes to Japan from Saudi Arabia, plunged 46 per cent last week to 123.13 Worldscale points, the fastest one-week drop since at least March 1998, according to data from the London-based Baltic Exchange. That represents earnings of about US$59,461 a day after fuel costs.

Frontline Ltd, the world's largest owner of such vessels, and other 'major owners' slowed the fleet by 20 per cent towards the end of last year, curbing vessel supply by 10 per cent, according to a May 2 regulatory filing from the company.

The possibility of another go-slow is 'soon again emerging' because of rising fuel costs, Jens Martin Jensen, CEO of Frontline's management unit, said in an e-mailed note on July 10.