Slow steaming in the dry bulk is coming to an end, adding an alarming surge of capacity to a still fragile sector. That’s the view of Pankaj Khanna, CEO and founder of Singaporean dry bulk line Pioneer Marine.
Khanna revealed his concerns about bulkers speeding up while issuing the company’s first quarter results, during which the line made a net loss of $4.9m.
“As freight rates rise, fleet speed comes into consideration,” Khanna noted, adding: “Vessels are speeding up from the 12 knots they have been trading at for most of the last 2-3 years, resulting in increased supply and thus capping freight rates.” The ex-DryShips employee said that the market would need “some time” to absorb this additional capacity.
Nevertheless, Khanna predicts an improving freight rate situation for dry bulk in the coming 12 to 18 months.