On the surface, transportation companies like airlines and shippers are the most obvious beneficiaries of the 46% plunge in crude oil prices in mid-June, since one of their biggest expenses – fuel – is falling fast. Alas, shipping companies have bigger problems beyond just fuel costs.

Even as fuel prices decline, the Baltic Dry Index, the global benchmark for dry bulk freight rates, has fallen 40% since the start of November and is down 62% this year. Freight rates for Capesize ships – huge cargo tankers lugging coal or iron ore that are too big to pass through the Suez or Panama canals, and which must sail around the Cape of Good Hope or Cape Horn – have sunk nearly 50% in the past three months.

Their problem goes beyond supply and demand, although the challenges with both are daunting. Energy costs aren’t the only thing coming down; iron ore prices are down nearly 50% this year, thanks to a glut of iron ore, and as a result there is no rush to order new shipments. “Low iron ore price will put the Brazilian iron ore export story at risk,” note Jefferies’ analysts. There’s no urgency to order shipments from Australia and Brazil, and China’s iron ore inventories at port are piling up to multi-year highs.

Also, China’s coal imports are down 13% year to date, according to Jefferies, and restrictions on the quality of imports could also limit coal shipments into China as Beijing looks to help the domestic sector.

Freight rates for the Australia-China route have for the last five years averaged between 5% to 10% of the iron ore price, according to J.P. Morgan, making it difficult to see significant upside for dry-bulk carrier revenues as iron ore supplies look to outpace demand.

Slackening freight demand would be less problematic if supply was tight, but it isn’t. The dry-bulk fleet is projected to expand between 5% and 6%, according to Bloomberg Intelligence. And because most of these ships are relatively new, ordered during the golden age for shipping between 2007 and early 2008 and delivered just two or three years after that, the need and potential for scrapping is low. That does not even include Vale’s ( VALE ) recent sale-and-leaseback agreement with China COSCO ( 1919.HK ), which may now allow several “Valemax” vessels – massive ore carriers that are larger than Capesize, built by Brazil’s Vale to efficiently send iron ore to Asia – to dock in China. As Barclays noted in a recent report, the industry “remains deeply over-supplied.”

Meanwhile, declining crude oil prices also aren’t the salve investors hope. As fuel costs come down, tankers are picking up speed and arriving at ports sooner, which, ironically, exacerbates the problem of over-capacity. Over the past three years, average speeds for bulk carriers have come down from 8.6 knots to 7.1 knots as bunker fuel prices stayed high around US$600 to US$700 a ton. But as fuel prices began to collapse recently, average speeds have reversed direction and recently ticked up to 7.4 knots. It’s too soon to declare a new trend in shipping speeds, but if this uptick keeps up, the increased speed will make more ships available at ports, adding to the market’s supply.

Then there’s the new development starting in 2015, where ships traveling within 200 miles of shore in Northwest Europe or North America are required by the International Maritime Organization to burn cleaner – but more expensive – gasoil instead of traditional bunker fuel. Yet these shippers can’t easily avoid or bypass these new so-called emission control areas. North America, for one, is producing more oil and gas from its shales, and, as a result, exporting more of the coal it does not consume itself. Bulk carriers servicing North America could see their operating costs go up thanks to these newer emission control standards.

The top three global capesize fleet owners are the Japanese Nippon Yusen ( 9101.JP ), Mitsui O.S.K. Lines ( 9104.JP ) and Kawasaki Kisen Kaisha ( 9107.JP ). Between them, the trio controls about 11% of global capesize capacity. However, all three shipping companies are diversified across dry bulk, tankers, container and other types of ships. Brokerage analysts are almost universally bullish on the three stocks, in itself a red flag for contrarians.

Until freight rates recover, China COSCO is another diversified shipping name to avoid, thanks to its weak balance sheet. China Shipping Development ( 1138.HK ) also has a big share in the bulk sector, and should be avoided too.