Fearnleys had an interesting commentary posted on their website concerning the newbuilding order book for bulk carriers. [If you have never gone to their website I can highly recommend it. They post quite a bit of free material and market information.]
In part they said, "Despite the fact that almost no bulk carriers have been ordered since
August, the “official" order book still numbers almost 3,000 vessels,
or 267 mdwt. About 90% of these ships are scheduled for delivery during
the coming 36 months. If all these ships were to be delivered, this
would, in our opinion, become a major catastrophe for the dry bulk
market and result in a structural oversupply situation similar to what
we experienced in the 1980s."
That they will all be delivered is highly unlikely. As a friend of mine said, when shipowners are talking to the yards these days about their current new building orders, they are having a hard time looking the yard guys in the eyes and have that furtive "wish I was anywhere but here" kind of look. The assertion in the article and one in which I see a lot of truth is that there are going to be massive cancellations as a result of the financial crash. In this Fearnley's sees the financial crash as a benefit, it being better to lose a deposit on a ship rather than build it and have no way to employ it.
The aspect of this that interests me the most is the inclination of shipowners generally to behave like lemmings. If memory serves, in the beginning years of this century when the markets first began to improve the only thing that saved the freight market from having the bottom dropped out of it when it first picked up is that when the bulk owners rushed to the yards to order new tonnage the tanker owners were already there. Since nobody could get a ship built the market actually stayed up for awhile.
In his book, "Risk, Uncertainty, and Profit," the great economist Frank Knight listed 11 different conditions that had to be met before perfect competition was established. Shipping meets most if not all of the conditions, one that is particularly applicable; "There must be perfect, continuous, costless intercommunication between all individual members of the society. Every potential buyer of a good constantly knows and chooses among the offers of all potential sellers, and conversely.
There is such a volume of information about ships and cargoes that in aggregate it's hard to say that owners can't see the demand, and charterers too. The question is, having this near perfect competition, when the rates have climbed up and up and up, to levels never seen before (remember the Cape size rates of only a few months ago) and the yards fill up till there isn't a slot left until sometime in the future well after the demise of fossil fuels, shouldn't we all be able to read the signs before the creative destruction of capitalism is brought down on our collective heads?