INTERNATIONAL SHIPPING INDUSTRY
Global ship orders fall to lowest level in 15 years
Ship orders world-wide have shrunk to the lowest level in 15 years as vessel owners struggle with excess capacity that has kept freight rates well below break-even levels. There were 3,200 vessels of a combined 81 million gross tons ordered globally in the first quarter, the lowest figure since 2004, marine data provider Clarksons PLC quoted as saying in a report released Friday.
“The global order book has declined to its lowest level since the early stages of the shipbuilding boom,” George Warner of Clarksons Research said. Crude tankers and bulkers made up around two thirds of all orders a decade ago, Clarksons said, but this year the share has dropped to 42 percent as volatility in commodity markets and changes in global energy consumption have triggered shifts in ocean-going trade.
Ship types like liquefied natural gas, or LNG, carriers now make up a bigger portion of orders. The 141 LNG carriers on order represent 13 percent of the total order book, compared to just 2 percent a decade ago, said Warner. The LNG market is surging on growing demand from countries including Japan, China and India, which are turning to gas rather than coal for power generation and heating. Seaborne LNG cargo markets also are being fueled by growing US gas exports, as extraction costs in the US are about a third less on average than those in other production centers including Russia and the Middle East.
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India shipping firms seek PM’s help to stay afloat
Over two dozen Indian shipping companies have submitted a memorandum to the Prime Minister Narendra Modi, seeking his immediate intervention to scrap a recent notification and a circular which, according to them, would force them to shut down, resulting in heavy job losses.
They said the Indian flag shipping industry was heading for a crisis arising out of Notification No. 2 of ‘Make in India’ dated February 13, 2019, issued by the Ministry of Shipping, and Circular No. 2 of 2019 issued by the Director General of Shipping, Mumbai. These changes would take away business from the Indian shipping companies, they said. The circular equates a foreign ship taken on hire, with a ship actually owned under the Indian flag by an Indian company. Besides it gives priority in government contracts to those ships, just because they were once built in India.
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US-China trade deal seen boosting grain container shipments
A deal ending the trade spat between the US and China would boost container shipments of grain, wheat and soybeans, according to the head of Japan’s largest container-shipping company. While agricultural goods are typically transported in large volumes by bulk ships, there’s a rising trend toward using containers as they can move smaller quantities more efficiently and without the need for storage facilities, Jeremy Nixon, chief executive officer of Ocean Network Express Pte quoted as saying last week.
The US and China are in negotiations to reach an agreement to end the trade war that has roiled markets and threatened global growth. The spat also led to China buying more soybeans from South America, including Brazil and Argentina.
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HK Kwai Tsing Terminal volume falls; Singapore, Shanghai rise
Hong Kong’s Kwai Tsing terminals’ volume fell 1.6 percent year on year in March to 1.23 million TEU while midstream operators handled 350,000 TEU, down seven percent. The cumulative total of containers handled at Hong Kong during the first quarter of 2019 was 4.41 million TEU, down 9.7 percent year on year. Meanwhile, Singapore and Shanghai enjoyed growth in March with Singapore posting 3.16 million TEU, up 3.6 percent with quarterly volumes rising to 8.9 million TEU while Shanghai increased March throughput 12.4 percent to 3.81 million TEU and sent quarterly volume up seven percent to 10.42 million TEU.
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India’s VOC port trust plans third container terminal
The VO Chidambaranar (VOC) Port in Thoothukudi, India plans to have a third container terminal with the current handling capacity at the two private terminals set to reach its maximum by end of this fiscal. However, the Port Trust is in a fix on identifying the right concession model to be offered to the new operator considering that two different models — royalty and revenue share — are already in vogue at the port.
PSA SICAL Container Terminal, which has been running a container terminal since 1992, operates on a royalty-based model while the Dakshin Bharat Gateway Container Terminal (DBGT), operating since 2014, adopts a revenue-sharing model. Together, the two terminals are expected to reach a maximum capacity of 1.2 million TEUs (twenty foot equivalent units) by the end of this financial year, thus warranting a third terminal.