Weak voyage numbers on trans-Atlantic coal routes mean that some Panamax owners are choosing to idle vessels for a few days rather than accept current levels, sources said.

Trans-Atlantic voyages from the US East Coast to the UK Continent have been very weak compared with 2014 levels and the coal route from Hampton Roads, Virginia to Rotterdam, basis 70,000 mt, was assessed by Platts at $7.75/mt on Tuesday.

The same route was assessed at $11.50/mt on March 10, 2014, a difference of $3.75/mt.

Excess tonnage has been an issue in the North Atlantic for the last two months and rates have moved in a narrow range of $8.75/mt to $7.25/mt between January 2 and March 10 on this route, as a result.

Many owners are idling vessels for up to a week on UK Continent while they wait for stronger freight rates to be paid on trans-Atlantic cargoes.

A lack of coal requirements on trans-Atlantic routes has led to depressed freight rates, due to weak coal demand from European buyers, sources said.

Some of this decline in rates has been blamed on cheaper bunkers in Rotterdam, with IFO 380 CST bunkers valued at $574.50/mt on March 10, 2014, against a value of $290.5/mt on March 10 this year, a drop of $284/mt.

Idling costs on a Panamax, which cover insurance, crew costs and auxiliary power, typically cost around $9,000/day, which is significantly less than the cost of ballasting, sources said.

By contrast, if an owner were to ballast over to the US East Coast from UK Continent seeking a cargo, the cost in fuel alone would come to $127,197.

The voyage would typically take 12 days and this takes into account that the vessel will have to burn marine gasoil ex-Rotterdam for five days due to IMO emissions regulations in the North Sea and in a 200 mile zone off the coast of the US, and IFO 380 CST ex-Rotterdam for seven days, with a typical Panamax burning 25 mt of fuel per day when unladen at a speed of 12 knots.

Other owners are electing to take low-rated coal or iron ore cargoes from the Russian Baltic to the UK Continent or Mediterranean, and use the opportunity to fill up their fuel tanks with cheap bunkers, sources said.

These cheap bunkers reduce their costs on subsequent voyages, according to a Switzerland-based shipbroker.

Bunkers in St Petersburg are significantly cheaper than Rotterdam and Platts valued St Petersburg IFO 380 CST at $252.5/mt March 10, which is $38/mt cheaper than Rotterdam.

These fuel savings make a huge difference to shipowners’ profit margins, sources said.