Van AalstTOC EventsViganTMS Awards 2021Port of South LouisianaSailors Society
  • The Wolfson Centre for Bulk Solids Handling Technology
  • Cimbria
  • Cleveland Cascades Ltd
  • Coaltrans Asia 2021
  • Van Aalst
  • Sailors Society

Oversupply still major challenge warns ICS

(Posted on 08/04/19)

Speaking in Istanbul, Simon Bennett, Deputy Secretary General of the International Chamber of Shipping (ICS) has warned that avoiding overcapacity and unsustainably low freight rates is still a major challenge ten years after the massive downturn of 2008.

Mr Bennett said: “In that time shipping companies needed to show restraint when ordering new ships, to prevent stifling recovery. Yet the dark clouds of protectionism and slowing growth in key economies mean that the avoidance of overordering is now more important than ever.”

Addressing an audience of shipowners and operators at the Global Maritime Summit 2019, organised in conjunction with the Turkish Chamber of Shipping, Mr Bennett acknowledged that individual operators would legitimately make their own individual business decisions regarding new tonnage.

“Opinion is still divided on whether the rapid globalisation that has been experienced in the last thirty years may have run its course, and whether the slower rate of trade growth seen since the 2008 crisis represents some kind of permanent structural change,” he said. “Certainly in 2019, the outlook for the global economy and thus demand for maritime transport appears to be worsening.

“Ship ordering (in deadweight tonnage) fell 14% in 2018, about 17% below the average since the 2008 downturn. This suggests that many shipowners may indeed be resisting the temptation to over order and in early 2019, the worldwide shipping order book appeared to be stable at around 10% of the fleet,” he said. “However, the reluctance of governments in Asia, where the vast majority of ships are built, to address overcapacity in the shipbuilding sector remains a serious issue.”

Mr Bennett explained: “As well as the temptation to over order, decisions about when to recycle older ships are also fundamental to the equation. The good news is that a number of important regulatory uncertainties which have complicated decisions about when best to dispose of older ships are finally being resolved.

“In particular this includes the implementation dates of the IMO Ballast Water Management Convention. And while the precise cost of compliance with the IMO sulphur regulations is still unknown, the situation should become clearer after January 2020 now that IMO has confirmed that the implementation date of the global sulphur cap is irrevocable.”

ICS is also encouraged by the decision in 2018 by the Organization for Economic Co-operation and Development (OECD) to resume negotiations on an agreement to remove market distorting measures from shipbuilding that contribute to overcapacity. However it remains to be seen whether China (which is not an OECD member) will take an active part.      

“Notwithstanding the risks of uncertainty in the immediate years ahead, in the long term there is always cause to remain optimistic,” said Mr Bennett. “The UN has revised its projections for population growth upwards to an incredible 8.6 billion in 2030 from 7.7 billion in 2018. Combined with seemingly unstoppable demand for higher living standards in emerging economies, this indicates that long term demand for international shipping should continue to increase significantly.”  

Latest News

DNV verification for world’s largest 3D printed shipboard fitting

(Posted on 16/09/21)

Keppel Technology & Innovation (KTI) has received a verification certificate for a 3D printed deck... Read more


RUSAL alloy included in Russian Maritime Register of Shipping

(Posted on 16/09/21)

RUSAL, a leading global aluminium producer, has announced the inclusion of an aluminium-scandium alloy... Read more


Struggling seafarers need more mental health support

(Posted on 13/09/21)

Cases of seafarers struggling with their mental health will continue to rise unless shipping companies... Read more


ClassNK releases “Guidelines for Ships Using Alternative Fuels”

(Posted on 13/09/21)

ClassNK is committed to providing comprehensive services to support the industry’s efforts for... Read more


Thordon Bearings praises Innovative Solutions Canada

(Posted on 13/09/21)

Thordon Bearings has praised the government’s Innovative Solutions Canada initiative for encouraging... Read more


LR and Inmarsat form industry-first remote survey collaboration

(Posted on 07/09/21)

Lloyd’s Register (LR) and Inmarsat, the world leader in global, mobile satellite communications... Read more


Ten newbuildings to further increase Fednav’s efficiency

(Posted on 02/09/21)

Fednav Limited, Canada's largest dry bulk shipping group, has signed an agreement with Sumisho Marine... Read more


BIMCO calls on shipowners for biofouling management information

(Posted on 31/08/21)

BIMCO is launching a new survey with the aim of gathering information from shipowners about the effectiveness... Read more


Golden Ocean maintains exposure to soaring spot market

(Posted on 27/08/21)

Dry bulk shipping company Golden Ocean Group Limited has announced its results for the quarter ended... Read more


Decarbonisation can change shipping’s future for the better

(Posted on 27/08/21)

Decarbonisation is a massive opportunity for shipping to reclaim its proper value and regain a positive... Read more


TBA GroupCoaltrans Asia 2021Port of StocktonBühler GmbHTelestackCimbria
  • TMS Awards 2021
  • TOC Events
  • Bühler GmbH
  • Port of South Louisiana

Subscribe to our newsletter

Keep up to date with the latest global news in bulk cargo handling and shipping