Shipping firms should be cautious in ordering of new ships: Pradeep Rajan

Says, shipping companies are turning around, with a general increase in capacity utilisation

Shipping companies are turning around, with a general increase in capacity utilisation and freight rates steadier. Pradeep Rajan, senior managing editor, Asia Pacific Shipping & Freight, S&P Global Platts, talks to Rajesh Bhayani on the outlook. Edited excerpts:

Which factors are driving recovery in shipping freight rates?

Euronav Shipping, Frontline and Navig8 have acquired huge capacities in the tanker segment while the shipping industry was passing through huge consolidation. Now, 45 per cent of the world's tanker capacity is controlled by five players. At the same time, demand for crude oil has increased, either for refining or commercial as well