“THE DAYS OF PAPER-BASED WORKFLOWS IN SHIP MANAGEMENT ARE GONE”
The overall global shipping market has deteriorated significantly during the first five months of 2016.
Earnings across most of the segments continued to decline, in many cases representing levels significantly below operational expenses. Even the oil tankers segment, which is still generating income, has experienced softer rates.
The current order book consists of 6,000 ships, corresponding to 191 million GT. However, it’s facing a descending trend since the number of deliveries exceed number of new contracts.
Moreover, a 2015 survey from Moore Stephens International found that vessel operating costs rose by 2.8% in 2015 and are expected to rise by 3.1% in 2016 while the cost of repairs and maintenance escalated by 2.3% in 2015 and was expected to grow by 2.4% in 2016.
After a very weak 2015 for container transportation, in which global trade growth disappointed and freight rates collapsed, the containership sector faces major challenges in 2016.
Two of the most significant changes in 2016 are represented by
• mergers between liner companies and
• the opening of the new Panama Canal
For the full year 2016, total containerized trade is expected to grow by 4%. However, the uncertainty surrounding the predictions is higher than in previous years. A lot will depend on the economic developments in the US, Europe and Asia. In the long run, the contracting is expected to slowly pick up and reach 1.66 million TEU by 2020.
During the last few months dry bulk earnings have hit record lows and asset prices continued to deteriorate. In an attempt to reverse the trend, owners either demolish or lay-up an increased number of ships.
At the same time, the contracting activity has almost stalled. With hardly any signs of an improvement on the demand side, the market seems to have reached rock bottom. The forecasted trends are similar as in the case of containers, perceiving a slow but steady recovery up until 2020.
OFFSHORE SERVICE VESSELS
According to DNV GL, the offshore support vessel (OSV) market has been suffering serious challenges since the oil market drop in 2015.
The overall vessel utilization has fallen significantly over the last year as a consequence of the oil companies trying to adjust to the “new reality” of the low oil prices by announcing further cutbacks in exploration and production. In May 2016 the number of lay-up vessels reached 1400.
Annual OSV fleet growth (based on numbers) has remained above 5% over the last five years. For 2016, the fleet growth is expected to be in the range of 4%, after which it is expected to drop to 2%-3% per annum.
In the case of mobile offshore units (MOU), 2016, will see a total number of newbuilds contracted of around 20 units (compared to 100 in 2014 and 34 in 2015). Deliveries are forecasted to increase from 70 in 2015 to around 120 in the full year 2016. MOU demolitions are expected to remain at a comparable level as in 2015
The most recent newbuilding contracting forecast, according to Clarksons Research, suggest only 934 ships over 2,000 GT for 2016, which is the lowest in 25 years. Considering that the order book for the newbuilding market in the first 5 months has been reaching 300 vessels, it appears that this forecast is still optimistic but in the same time a higher activity in the market it is expected in the second half of the year.
The evolution of the market has led to a decrease in the newbuilding contracts and due to the low prices that the yards are practicing, the competition on the Asian market has increased.
The best industry overview in terms of world fleet by principal vessel types is offered by the United Nations Conference on Trade and Development (UNCTAD) in their 2015 Review of Maritime Transport: