A study by Deutsche Bank has concluded that shipping rates could decline by up to 7.5 per cent annually during the next two years as the global fleet of vessels expands.

The recent boom in newbuilding orders made by major shipping companies has been fuelled by high freight rates that are a result of sustained demand from China and the US.
Indeed, London-based broking group Clarksons estimates that orders placed for new ships currently stand at around $77 billion, an all-time record.
Using data supplied by Clarksons, the bank predicts that the global fleet of oil tankers is set to increase 5.7 per cent in 2006 and a similar 5.7 per cent the following year.
These increases are because deliveries of new tankers in the next two years will be about three times higher than the number of older vessels that will be scrapped.
Furthermore, according to Deutsche Bank, oil tanker demand should grow by between 2.8 per cent and 4.8 per cent in the same period, with about 12 per cent of the global tanker fleet comprising ships aged 20 years or more, down from about one in three ships four years ago.
Similarly, the world fleet of dry-bulk ships is likely to grow by 6.2 per cent next year and 4.2 per cent in 2007, Deutsche Bank said, with demand for the carriers set to increase by just 3.7 per cent and 3 per cent respectively, in the same period.