Archives for posts with tag: general cargo

Changes in the composition of the world fleet are nothing new, and have been a recurring theme throughout the history of the shipping industry. The twenty-first century has been no exception. At the start of 2000 the world fleet totalled 788 million dwt, but today’s fleet and orderbook combined total more than 2.0 billion dwt, and alongside this expansion the make-up of the fleet has also continued to change.

Bulk Boom Bulge

Clarkson Research tracks the world fleet and orderbook of over 90,000 ships. The Graph of the Week shows the difference in each vessel sector’s share of the total fleet in terms of both vessel numbers and dwt capacity, comparing start 2000 to today’s fleet and orderbook combined. It comes as no surprise that the clearest gain in share belongs to the bulkcarrier sector. During the ordering boom of the mid-2000s bulkers were often the investors’ ship of choice, spurred on by ramped up earnings and dry bulk trade growth averaging 7% during the period 2003-07. On the basis of today’s fleet and orderbook, bulkers account for a 11% greater share of world fleet dwt than at start 2000, and a 4% larger share of fleet numbers.

The tanker fleet meanwhile has seen its share of the world fleet decline over the same period; the overall tanker fleet saw its share of dwt capacity fall by 8%. Although 317m dwt of tanker tonnage was ordered in the years 2003-08, activity in other sectors has seen the tanker tranche slim down. Crude oil trade growth this century has been limited to an average of 1% per annum, although more positive growth in oil products volumes (5% per annum on average) has driven requirement for product tankers, helping maintain the tanker share of vessel numbers.

Liner Alignment

On the liner side, the containership sector has seen a significant growth in its share of tonnage. Robust trade volume growth of an average of 8% per annum this century has ensured a requirement for rapid growth in capacity. However, that has not been the only factor. In capacity terms container tonnage has also benefitted over the period from the increasing containerization of general cargo trade. Whilst the containership share of global tonnage has increased from 8% to 13%, the shares constituted by general cargo ships, MPPs, ro-ros and reefers have all decreased in dwt and number terms.

What’s Next?

The world fleet product mix continues to evolve. The consensus view seems to be that the more rapid growth in requirement for more specialised tonnage will see the share accounted for by, for example, gas, container and offshore units expand. In the period shown here, the offshore sector, led by the numerically strong OSV fleet, has already increased its vessel number share by almost 3%.

However ‘wildcards’ also come into play(few foresaw boxships as large as 18,000 TEU back in 2000) and ordering patterns are determined by a range of factors not just demand fundamentals. If prices look attractive, shipping investors often turn back to the sectors in which they are comfortable, and the composition of the fleet doesn’t always evolve as it seems it logically should. So, for the latest trends, watch this space. Have a nice day.

SIW1118

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SIW1084It has been well documented that for the last few decades container trade has been one of the fastest growing parts of world seaborne trade. In tonnage terms it has grown from an estimated 237 million tonnes in 1990 to 1.5 billion tonnes in 2012, increasing its share of global seaborne trade from 6% to 15%. Like any emerging phenomenon the early years of containerization were marked by rapid growth, following the inaugural voyage of the Ideal-X in 1956.

Great Expectations

The next question was how long it would take the industry to mature and what growth rates could be ex-pected in each phase. We now have plenty of data to examine the progression. The graph shows the historical growth rate of container trade back to 1974, based on estimated ‘A to B’ trade from 1997 onwards and global container ports lifts (a useful available proxy) prior to that. It also shows the growth rate of the volume of world trade in goods (not just those in containers) back to 1980.

Early Growth Phase

The 70s and 80s were really still part of the early phase, and the conversion of the carriage of goods from general cargo to containers sustained rapid growth. In the 70s/80s the average annual growth rate in box volumes stood at 11.7%, and in the 80s the average rate was more than double that of world goods trade.

By the 90s, although many commodities had been container-ised, the trend continued and equally importantly the commodi-ties forming the bedrock of box cargo were representative of the fastest growing part of world trade (i.e. manufactures). In the 90s the average growth rate stood at 9.3%.
Phasing East

In the 2000s the pace of the growth was bolstered by a key trend – the outsourcing of production from developed to developing economies, notably from the US and Europe to China. As western companies rushed to set up shop in or source production from Asia, this boosted volume growth. In the 2000s average box trade growth stood at 7.8%, but prior to the downturn in 2008 it was 10.3%, 1.4 times the growth in world goods trade. The average rate in the 2010s so far has slowed (7.0%) on the back of the downturn, but not (yet) quite as heavily as some expected.

That’s A Lot of Boxes

What’s next? For a new transporta-tion technology, 57 years old is still young, and there’s still non-containerized general cargo out there. But the outsourcing boom and the peak of containerization have passed, and a betting man might expect growth to mature to 5-6% pa in the next decade. Though it’s hard to predict precisely, a lot of capacity will likely be required. Boom period deliveries have ranged between 1.0 and 1.5m teu, but with today’s fleet and orderbook totalling 20m teu, 6% pa growth would soon require 1.2m teu of extra capacity every year just to keep up, before the replacement of old and obsolete tonnage. That’s a lot of food for thought for the shipping industry’s builders and financiers.