Falling dry-bulk rates claims a carrier

Falling freight rates seems to have claimed its first victim. According to reports, Ukraine's Industrial Carriers Inc, Marshall Islands-based company that is headquartered in Odessa, has filed for bankruptcy after it ran up debts of $33 million. The plunging of freight rates has said to have squeezed daily income from the chartered fleet.

The carrier, which had booked revenues of $1 billion in 2007, is said to have been operating profitably until July with a fleet of around 50 bulk carriers. The company had many well-known names, including Greek-owned Star Bulk Carriers as its customers. Its fall has started fueling concerns that other big operators could go bust as freight rates test new lows.

During the market's free-fall that began this summer, rates for 150,000-165,000-tonne Capesize ships crashed by 50% as of last week to just over $12,000 a day compared with a peak of $233,000 in late May.

"Earnings have fallen off a cliff," said London shipbroker Clarkson.

The carrier, founded in 1999, operated Capesizes as well as smaller Panamax and Handymax vessels which saw average daily rates plunge by 27% and 24%, respectively, last week.

While the company has settled with its creditors before filing for bankruptcy, there are growing fears of defaults by individual charterers. There is also concern over possible serial defaults as many deals involve several charterers of the same ship, where a lead charterer sublets a vessel to another charterer who has also hired the ship on.