The early weeks of 2011 have witnessed a number of natural disasters causing misery and financial hardship for many. Floods in Australia, Brazil and Sri Lanka have forced large communities to flee, with whole townships under water and personal fortunes radically altered in a matter of hours.

But natural disasters are not the only ones heralding the early weeks of 2011. For shipping, it is man’s folly in the form of over-ordering that looks likely to make 2011 a very difficult year in a number of key sectors. A flood of bulk carrier deliveries, for example, is undermining the dry market where demand is still relatively buoyant but is being swamped but the sheer volume of new ships joining the fleet. In the container sector, a wave of deliveries has forced lines to postpone rate restoration plans on some of the world’s most important liner trades.

For the moment, though, it is the dry bulk market that is hardest hit. An average of more than 30 bulk carriers will be commissioned each week of this year, according to industry statistics, and of these, around seven will be Capesize units. Brokers warn that however healthy the world’s underlying commodity markets may be, absorbing deliveries on this scale and finding suitable employment for unfixed tonnage working spot will present owners and operators with some of the worst headaches anyone can remember.

There are likely to be casualties along the way: some owners may well be able to draw down on healthy reserves built up during the dry bulk boom, but others are thought likely to have used much of their spare cash to invest more equity in newbuildings, as banks have imposed tougher lending criteria. Corporate casualties are likely to result in distressed tonnage becoming available at deep discounts to current values and a fraction of the record prices paid when these ships were ordered at the peak.

This may offer an interesting opportunity for owners who have accumulated war chests in preparation for circumstances such as these, but it will do nothing to improve the environment for solid owners whose operating economics are based on more expensive vessels requiring higher rates for debt service. Once again, it is likely to be prudent owners who have locked tonnage away on medium- and long-term charters, probably well below the peak rates that were available on short-term deals, that will prove the most resilient.

This week, Capesize rates plunged to a two-year low as floods in Queensland caused disruption at coal loading ports on Australia’s eastern seaboard and Brazilian miners focused on annual maintenance programmes. But smaller bulkers were hard hit too; with brokers forecasting no bounce back soon as new ships just keep on coming. Rates in the Pacific have suffered most, with Baltic Exchange rates on key handymax and supramax routes falling steadily since mid-December.

The cessation of cargo coming out of northern Queensland is certainly exacerbating the problem but owners hauling iron ore out of India and coal from Indonesia to China and India, trades that are relatively healthy in volume terms, are facing a flood of new vessels which brokers warn could depress the market for some time. Others were hoping that the Chinese New Year, due to start on February 3rd, could prove an important watershed, with renewed activity thereafter soaking up some of the excess shipping capacity.

Meanwhile hawkish banks are likely to be watching the performance of certain clients more closely than usual, according to some experts. Shipping accountant and consultancy firm Moore Stephens expects to see banks commission more independent business reviews assessing the future viability of poor performers this year, as owners come under constant pressure from falling freight rates and crew costs that continue to climb. “The emphasis this year will be keeping the cash flowing,” the firm’s shipping industry group head, Julian Wilkinson, wrote this week in the firm’s newsletter.

“The banks know that shipping operations with strong leadership, governance and risk management that have survived the downturn deserve continuing support. They will listen to those with robust investment plans, who in turn will be encouraged by low interest rates. Prudent owners will keep their bankers sweet and their financial advisors close at hand,” said Wilkinson.

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