The economic impact of the coronavirus is taking a strong toll on the shipbuilding industry according to a new analysis from BIMCO. While the orderbook is at its lowest point in 17 years, BIMCO however reports that even with increasing demolitions fleet volumes are continuing to rise based on deliveries of existing orders.
“Contracting activity has been quick to feel the effects of the pandemic with owners and investors showing little appetite for new ships,” says Peter Sand, BIMCO’s Chief Shipping Analyst.
Looking at the orderbook for commercial shipping consisting of container ships, dry bulk, and tankers, BIMCO reports in total orders have declined by 50 percent. Hardest hit has been the dry bulk sector followed by container ships. Tanker orders have not fallen as dramatically largely because they had already been at lower levels over the past two decades.
In the first seven months of 2020, orders for dry bulk vessels were down by 65 percent versus the prior year. At just over 63 million DWT, the dry bulk order book is at its lowest level in sixteen years according to BIMCO. Further, with the decline in trade volumes and an expected long road to recovery, they do not expect the orderbook will rebound quickly.
Orders for new container ships also were down significantly in the first part of 2020. According to BIMCO’s data, container ship orders have fallen nearly 40 percent so far in 2020. That places the total volume for the container ship orderbook at its lowest level since September 2003.
The overall tanker sector is showing the smallest declines due in large part to the fact that orders for new tankers were already at lower levels. BIMCO reports that orders for crude oil tankers were down just over four percent in total DWT while product tanker orders fell 12 percent from year-ago levels. In fact, BIMCO reports that product tankers were the only segment to have reported an increase so far in 2020, up nearly three percent in the first seven months of the year. Orders for crude oil tankers however are down more than 40 percent so far in 2020.
While new orders have been greatly impacted, the long lead-time in construction helped to maintain new ship deliveries. BIMCO reports that new ship deliveries have been more resilient falling just two percent in 2020. Deliveries of new dry bulk carriers were actually up 40 percent in DWT volume so far in 2020 while container ship deliveries were down by nearly the same percentage so far in 2020. Crude oil tanker deliveries are also down 40 percent while product tankers are down by 46 percent so far in 2020.
Efforts by shipowners and operators to manage their fleets and lower costs are also reflected in a strong recent increase in demolition activity. Demolitions measured in DWT were up 50 percent in July versus the year-earlier and 400 percent versus April 2020 when many yards were idled by the pandemic.
As would be expected, the largest increases in demolitions also came in the dry bulk sector up 80 percent year over year while container ship demolitions also increased by a quarter so far in 2020. Product tanker demolitions also increased, 10 percent in DWT, but only two crude oil tankers have been sold for demolition so far in 2020 represented a dramatic decrease versus the year ago.
“The sharp uptick in demolitions following the reopening of yards is entirely expected due to the demand shock from the Covid-19 crisis and expectations of a long road to recovery ahead of us. This is reflected in both the higher demolition numbers, with owners pushed to act on older and substandard ships that they had kept sailing until now, as well as the drop in contracting as the outlook for the next few years has become much gloomier than it was at the start of the year,” says Peter Sand.
As deliveries continue to outpace the demolition activity, BIMCO reports that in the near term fleet volumes have continued to rise. With trade volumes expected to decline significantly this year and not recovering possibly until 2022, BIMCO however predicts that balance in the shipping markets may be hard to achieve.
A massive fire broke out at the Port of Beirut on Thursday, incinerating a warehouse full of tires and oil within the port’s free zone. The same area was heavily damaged in the ammonium nitrate explosion that leveled the central port area and the adjacent waterfront on August 4. According to Lebanon’s civil defense agency, […]
Over the course of the past five days, the Australian Maritime Safety Authority arranged a medical intervention for an injured aboard a freighter in the Indian Ocean. On Saturday evening, the Spliethoff tweendecker Dolfijngracht called for assistance while under way about 1,000 nauical miles off the coast of Western Australia. A crewmember had sustained serious […]
The naval forces of the US and Bahrain recently staged a joint force training exercise which showcased the interoperability between coalition warships operating I the Arabian Gulf. Coalition Task Force Sentinel executed combined exercise Sentinel Shield supporting Sentry and Sentinel patrols in the coalition’s area of operations. The guided-missile destroyer USS John Paul Jones and […]
The U-Freight Group (UFL), with its considerable involvement in eCommerce logistics, says that the latest statistics showing that global e-commerce sales hit $25.6 trillion in 2018 are a further vindication of its decision to enter this sector of the international freight market several years ago. The latest available estimates, up 8% from 2017, were recently […]
DSV Belgium has solid experience in the transport of pharmaceutical products for different customers. With a pharma hub based at Brussels Airport a lot of experience and know-how has been built up over the years. Last weekend, the forwarder handled one hundred million mouth masks, an important milestone for its Belgian organisation that has put […]
The UK government’s new post-Brexit tariff regime will result in both winners and losers. The new regime is set to replace the European Union’s Common External Tariff from the end of the Brexit Transition Period on December 31, 2020. The UK’s commitment to the ongoing Brexit process and ending the UK’s transition from EU membership […]
The National Transportation Safety Board (NTSB) has released a Marine Accident Brief about an accident that occurred on April 15, 2019, involving the towing vessel DeJeanne Maria which struck the end of a submerged dredge pipeline while pushing two spud barges to the Gulf of Mexico. The incident occurred on the Mississippi River in Pass […]
With close to 100 daily cargo flights operated to a destination network spanning more than 65 cities across six continents, Emirates SkyCargo is delivering essential supplies and commodities to people around the world. The air cargo carrier is currently operating 11 Boeing 777 freighter aircraft, each with a capacity to transport about 100 tonnes of […]
Astral Aviation has increased its intra-African network with cargo freighters during the pandemic. While there has been a reduction in capacity to, from, and within Africa, which has been caused by a stoppage of passenger flights and limited frequencies on freighter aircraft, Astral Aviation continues to operate cargo freighters from its Nairobi hub to 13 destinations […]
Best known as a leading passenger airport serving Germany’s most populated federal state North Rhine-Westphalia, Düsseldorf has become transformed into a vital distribution point, during the COVID 19 pandemic, for medical equipment and other life-saving goods, mostly from China. Gerton Hulsman, managing director of cargo operations, reports that the handling teams are working hard to […]
Global commercial aviation charter company Albion Aviation Group is reporting that it is seeing a considerable uptake in its professional cargo broker training courses from the current global pandemic crisis and surge in charter demand. “We have completed a number webinar courses for a whole of host of companies, looking to manage their own cargo […]
Operators can continue to use pilots and other crew members who have unable to comply with certain training, recent experience, testing, and checking requirements due to the COVID-19 outbreak in support of essential operations. Additionally, this Special Federal Aviation Regulation (SFAR) provides regulatory relief to certain persons and pilot schools unable to meet duration and […]
Emirates SkyCargo has expanded its weekly scheduled cargo flight operations to cover 75 destinations across six continents. Through its wider reach, Emirates SkyCargo is able to transport essential commodities and other urgently needed cargo more rapidly across the world, allowing exporters and importers across markets to benefit from direct access to widebody cargo capacity. Some […]
Callan Marine is serving as the prime contractor to the Texas Department of Transportation for a maintenance dredging project located at the Bolivar Ferry Terminal, in Galveston, Texas. Work began in May and is estimated to be complete in late July 2020. The project consists of the removal of 600,000 cubic yards of material and […]
Network Airline Management and TAAG Angola Airlines are pleased to announce the renewal of their long-term freighter aircraft contract by an additional 12 months, sealing an ongoing partnership for the foreseeable future. Operating a regular weekly scheduled service from Liege, Belgium, to the capital of Angola, Luanda, Network Airline Management provides a Boeing 747-400F aircraft […]
Qatar Airways Cargo transported 56 SkyCell containers with vaccines from one of the largest vaccine manufacturers worldwide on its scheduled freighter and belly-hold cargo flights for its customer, CEVA Logistics. The 54-tonne shipment consisting of pneumococcal and varicella vaccines were flown from Brussels to Mumbai via the carrier’s hub in Doha on two separate flights. […]