NEW YORK (TheStreet) -- The dry-bulk shipping industry is facing a glut in 2010.

And what the coming oversupply will do to shipping rates next year is anyone's guess -- and everyone's worry.

By many estimates, there are more dry-bulk vessels on order now than there are ships in existence. How did it happen? Easy. The same reason there's a housing-stock glut in places like suburban Las Vegas or Tampa, Fla.: cheap and effortless credit plus human nature equals one potent (and usually disastrous) mix.

During the boom years, with rates higher than a galleon's crows' nest, with financing as easy to come by as a gull on a slop heap, ship owners went nuts with their fleet-expansion plans. They ordered ships by the hundreds.

Eagle Bulk Shipping

(EGLE) - Get Report

, for example, has 12 ships slated for delivery next year (though they're all the relatively small handymax-size ships.)

Navios Maritime

(NM) - Get Report

, for another example, has six capesizes on order.

All across the merchant-shipping world vessels are due for delivery -- mostly in 2010 and 2011, as you'll see from

these dry-bulk shipping sector charts

-- sliding down the shipyard ramps and into the sea, Champagne across the bowsprits. The day of reckoning is nigh.

How will ship owners

handle these (and other matters) in 2010

? Everyone agrees that they'll cancel outright some number of newbuildings and delay others, the delivery dates pushed out by six months or a year or more -- a phenomenon called "slippage" in industry parlance.

Also included in the total industrywide orderbook are newbuildings contracted for construction at so-called "greenfield" shipyards. This refers to shipyards that, like the newbuildings themselves, are under construction

or haven't even been built yet

. It's known in the industry that greenfield yards are highly speculative endeavors. Much of the time the vessels ordered from these places turn out to be little more than fictions -- no boats get built; nothing goes very far beyond an initial handshake.

Excel Maritime


, for instance, has six capesizes on order for next year, though four of those were contracted at a greenfield yard in Korea that has failed to find enough financing to get off the ground. Therefore, those four capesizes will almost certainly never be built.

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Also helping matters will be the natural fleet-pruning associated with scrapping. When a dry-bulk carrier hits 20 years of age, it's time to start thinking about putting her down. (And, yes, some of these decommissioned oldsters are run aground in Bangladesh and India to be picked apart by hand.)

In 2009, another big year for new-ship deliveries, 35% of newbuildings were either canceled or delayed. "People want it to play out that way next year," said one analyst. "Otherwise, they're screwed."

Plenty of bears have raised their semaphores. Robert MacKenzie, a shipping analyst at FBR Capital Markets, believes only 20% of the ships scheduled for delivery in 2010 will come out of the orderbook. He says that since shipping rates remain relatively high and relatively stable, ship owners will be less willing to cancel their orders. They want their boats and the business they can fetch with them.

MacKenzie has built a forecast model using some aggressive assumptions about the growth of the Chinese economy in the next few years -- and the global economy as a whole. Even assuming these optimistic projections, if all of the ships on the orderbook actually hit the water, MacKenzie warns, "the market won't get back into balance until 2013."

As for the bulls, ask a ship owner. John Wobensmith is the chief financial office at

Genco Shipping & Trading

(GNK) - Get Report

(which, for the record, has zero ships scheduled for delivery next year.) "If you look at what happened in 2009," with the percentage of the orderbook canceled and the number of ships scrapped, he says, "even the most optimistic person was wrong." He sees 45% of the 2010 orderbook being either cancelled or delayed. "I just don't see the doomsday scenario," he says.

Still, the bottom line remains: no one can say for sure just how many orders will be canceled or delayed. "Unfortunately there's no way to gauge it," says Jonathan Chappell, a shipping-stock analyst at


(JPM) - Get Report

. "It's going to have to be a wait-and-see approach."

-- Written by Scott Eden in New York


>>Dry Bulk 2010: Five Stocks to Watch

>>Chart Room: Dry-Bulk Shipping's Future

>>POLL: Which Dry-Bulk Shipper Will Win in 2010?

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Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.