Cancellation rates for dry bulk vessels on order at the Asian shipyards are much higher than those reported by classification societies, according to Safe Bulkers chairman and chief executive Polys Hajioannou.
He told a third-quarter investor conference call that low orderbook cancellation numbers of 6%-7% were because not everything was immediately reported to classification societies or engine makers.
The main problem the majority of these orders face is a lack of finance, because there was certain parts of the orderbook that were not financed.
Furthermore, there was a huge gap between the contact prices agreed by owners when they placed orders two years ago and the market value of vessels when they were ready for delivery. Owners had to find the money to pay this remaining gap.
"The cancellations will be much higher than all the classification societies expect. And of course, we will see more postponements of deliveries," Mr Hajioannou said.
Earlier this year, the credit crunch and the looming oversupply of dry bulk tonnage had executives forecasting that 30%-40% of the bulk carrier orderbook would be cancelled.
There are around 3,250 bulk carriers ordered or under construction around the world, totalling 283m dwt, according to Clarkson Research Services.
But classification society DNV reported last week that 388 bulk carriers, and 6% of all ship types on order, had been cancelled since the global financial crash just over a year ago.