Tramp. shipping has had a boom year. Theèfirst three quarters saw freight rates at unusually good levels, and at present a recovery from the recession of the last quarter is visible. Further improvement is generally expected before long, states the "Financial Times."
The factors causing the sharp rise in freight rates towards the end of 1986 were accentuated during last year, With the result that the industry has been unusually prosperous.
While general trade recovery caused increased imports of raw 294 materials by manufacturing coduntries, the supply of tonnage had been steadily reduced by the sale of cargo vessels for scrap. In addition, the construction of new tramp tonnage has for some years been abnormally low. Consequently, there was no reserve tonnage available to meet the additional demand during 1937.
Poor European harvests in 1936 led to heavier importation of grain, particularly by Germany and Italy. There was also a big expansion in coal shipments by the chief European exporting countries, The shipping activity itself led to increased movement of coal supplies to the various bunkering stations abroad.
In these circumstances, freight rates rose sharply and were maintained at a high level over the greater part of the year. The average level was approximately 50 per cent. higher than that of 1936, but in certain trades rates at some periods were more than twice the averages for 1936.
Earnings of tramp shipping companies have consequently been substantial. Some companies have been able to eliminate from their balance-sheets such burdens as arrears of depreciation and mortgages, and have even resumed payment of divid ends.
A sharp reaction from the peak levels of September has occurred, but it is generally believed that there will be a substantial recovery early in the New Year.
A recovery, in fact, is already in evidence.
Text read from the printed page and cleaned; old type leaves the occasional error.