THERE has been another bout of calls for increased scrapping activities in the shipping industry to reduce oversupply.
Over the last few years, repeated exhortations by shipowners and shipping lines have mostly fallen on deaf ears, exacerbating the problem of low returns and putting pressure on shipping rates.
Even when rust-buckets are sold to scrap-yards, some of them - including tankers, and medium-sized to small vessels - manage to find their way back to the sea.
Some businessmen persuade the scrap-yards to part with the sub-standard vessels by paying them a higher price than the price the scrap-yards paid for them.
As there is no rule or regulation to prevent rust-buckets from going back into circulation, the shipping industry is now facing a gross oversupply.
The problem is already bad in the tankers sector and is likely to hit the dry-bulk carriers sector too, unless, as suggested by a Hongkong Bank report on shipping, more vessels are scrapped.
But, will it happen? The report suggests that shipyards should call for scrapping before construction of new vessels begin. But it is easier said than done, because shipbuilders are not likely to sit around and wait for vessels to be scrapped before accepting business as the sector is highly competitive.