The 140 capesize bulk carriers estimated as waiting to berth at Australian, Brazilian and Chinese ports, equivalent to 11% of the global fleet, are having a "diluted" impact on the charter market compared with two years ago when this number of ships would have sent freight rates rocketing.
With 1,248 capesize bulkers over 100,000dwt in service, after 96 newbuildings have been delivered so far this year, factors such as congestion that would have been extremely positive for the market back in 2009, and even 2010 have little impact on market fundamentals, according to figures from London-headquartered shipbroker Simpson Spence and Young.
"Back in 2009 and 2010 when the congestion really did affect the capesize market, the number was more in the region of 18% of the fleet being tied up, but now the fleet is so much bigger the effect is diluted,"SSY COnsultancy & Research director Derek Langston said.
"The oversupply issue is a much bigger factor these days and the market is definitely characterized by it. We've already got capesizes slow steaming and the big shock of the drop down in cargo availability at the beginning of the year really helped accelerate the capesize market's decline. In that sense, the congestion story has taken a bit of a back seat."
Two years ago it was reported that 154 capesizes were waiting to berth globally as Chinese iron ore demand surged, which tied up 18% of the fleet then of 860 vessels, 50% less than the current number on the water.
Although capesize rates have crept up over the last few months, having reached a two-year low at the start of the year when disruption to Australian cargoes swamped the spot market with tonnage and saw rated at around $6,000 per day, they are still not as high as other dry bulk vessel sizes.
The Baltic Exchange's average capesize time charter rate closed last week at $11,723 per day, the first time it had been higher than the handysize average time charter rate, which slid to $11,365, but the former is for ships around 172,000dwt compared to the latter's size around 30,000dwt.
By comparison, 72,000dwt panamax average rates were higher at $14,360 per day and 52,000dwt supramax prices averaged $15,004 according to the freight indices provider.
The SSY Australian Coal Port Congestion Index also shows that panamaxes and some capesizes waiting to berth to load Australian coal are being delayed by between eight to nine days in mid-February, Mr Langston said. But compared with 2007 when delays were running this high, there has been a fundamental difference in the market in 2011.
"Congestion can act as a positive for the freight market if it ties up tonnage in queues, however, this year the number of force majeure declarations in Queensland effectively released ships back on to the market, so the overall effect was negative for freight rates," he said.
Regarding Australian coal exports volumes following flooding to the mines and railways earlier in the year, Mr Langston added: "We can see from port throughput data that volumes are recovering but are not back to normal levels for this time of the year."