Hiring canal boats in London costs more than supertankers earn from shipping Saudi Arabian crude to Japan as a glut of the oil transporters cuts freight rates on the industry’s most important trade route.
Returns from the 1,000-foot long tankers plunged 99 percent to $585 a day over the past year for single-trip charters to deliver 2 million barrel cargoes, according to the London-based Baltic Exchange. Hiring a 57-foot pleasure craft on the Grand Union Canal that links London to Birmingham costs 395 pounds ($646) a day, the holidayuk.co.uk website shows.
The surplus of supertankers vying for Middle East cargoes has more than doubled to 23 percent this year as ships hit the water that were ordered in 2007 and 2008 when returns were higher, according to Bloomberg News surveys of shipowners and brokers. Ship fuel prices, representing owners’ single-largest expense, have climbed 28 percent in 2011, tracking crude oil.
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