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Baltic Exchange CEO Penn Sees Ship Rates Unaffected by New Speed

Following are comments from Jeremy Penn, chief executive officer of the Baltic Exchange, about the assumptions shipbrokers should make when submitting rate estimates for Capesize vessels that carry iron ore.

The bourse said today brokers should assume vessel speeds of 12 knots with a cargo and 13 knots without, for fuel consumption of 44 metric tons a day. Guidance in its manual for panelists currently stipulates 14.5 knots and 15 knots, respectively, giving daily usage of 56 tons. Slow-steaming denotes speed cuts aimed at curbing use of fuel, the industry’s biggest expense.

“The panelists report the prevailing market rate for Baltic ships on Baltic routes. Increasingly, that’s been a slow-steaming market, and they have been reporting rates that reflect that.”

There shouldn’t be a “significant” alteration to the exchange’s published Capesize rates as a result of today’s guidance to assume lower speeds and fuel consumption.

To contact the reporter on this story: Alaric Nightingale in London at anightingal1@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net

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