Average earnings for the benchmark Middle East Gulf to Japan export route has tumbled below the $10,000 operating cost level for a Very Large Crude Carrier (VLCC), trading at a five-month low of $3,659 on Monday. A VLCC typically transports 2 million barrels of crude oil.

Analysts expect a difficult year not only for the tanker industry, but also for dry bulk owners, as a large surplus of tonnage keeps freight rates low and profit margins tight despite strong global demand for oil and commodities.

“We catch the doom and gloom of the industry,” Andrew Lockie, director of International Shipcare told reporters at the firm’s formal launch.

“I don’t think it’s going to be too long now (for a pick-up in layup business). Banks are knocking at the doors of shipowners.”

The Singapore-based maritime firm was purchased for an undisclosed sum from BP at the end of last year by Lockie and other former shipping executives of the British oil major.

International Shipcare currently provides maintenance and anchorage services to 20 vessels, ranging from crude and LNG tankers to dry bulk carriers and offshore service vessels, at its facility in Labuan, Malaysia.

About three percent of the 5,388 tankers in the global fleet are believed to be idle, and that should rise “exponentially” in the next two to three years, executives said.

Utilization rates for tankers were seen declining sharply from its current 85 percent if shipowners do not lay up or scrap their vessels, Lockie said.

The average cost of laying up a vessel is around $1,500 per day.