Global shipping is in one of its "deepest lulls in a long time" from which it could take years to recover, head of BP Shipping John Ridgway says.
BP Shipping is one of the world's largest tanker operators with a fleet of 53 vessels ranging from huge crude carriers to shuttle tankers and LPG carriers.
On any one day the company also has up to 1000 charter ships and barges on the water around the world carrying its products.
Shipping lines made huge losses last year and had already applied for bankruptcy protection in the United States as banks called in loans on ships.
The industry has been hit by falling rates as shipping lines added too many ships in anticipation of a global economic recovery, creating an oversupply of capacity.
The world's biggest container shipping line, Maersk, last week said it would make another loss this year due to lower freight rates and slower market growth.
British-based Ridgeway said shipping was traditionally a boom and bust market as investors poured money into new ships, which led to over supply.
This time that cycle had been exacerbated by the global economic downturn as well as issues like piracy and geopolitical concerns in the Middle East.
As a result "not only have you got oil shipping down, you have got bulk shipping down, you have got containers down and passengers ships in the doldrums," Ridgway said.
"We are probably not quite at the low point yet of the damage that is going to be done," Ridgway said.
Shipping company failures did not deal with the huge over-capacity in supply. "Until either trade picks up, or people decide to lay off ships, which is to take them out of service . . . it is going to be a difficult few years."
New ships were at anchor at Korean ship building yards and for sale as owners walked away from purchase contracts by not paying the final instalment.
It was cheaper for them to give up the ship and the money already paid than to take delivery of a ship they had no business for, Ridgway said.
High fuel prices of US$700 a tonne, two to three times normal, had led to an increase in "slow steaming" which reduces fuel burn and carbon emissions while the slower voyage times also helped to take some capacity out of the system, he said.