Van AalstPort of StocktonPort of South LouisianaTelestackCoaltrans Asia 2021TBA Group
  • Vigan
  • Cimbria
  • Port of South Louisiana
  • Sailors Society
  • Van Aalst
  • TBA Group

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

Singapore still leading maritime city

(Posted on 15/01/22)

The 2022 edition of the Leading Maritime Cities (LMC) report has been launched at an event hosted by... Read more


DNV Conference shows collaboration is shipping’s fuel of future

(Posted on 15/01/22)

Participants from across the maritime value chain have participated in the DNV Conference – The... Read more


CCS appoints new president

(Posted on 08/01/22)

China Classification Society has announced the appointment of a new President and vice president. Founded... Read more


New Sea Change Fund for seafarers in crisis

(Posted on 08/01/22)

Maritime charity Sailors’ Society has launched a new fund to provide urgent welfare grants for... Read more


ClassNK to make electronic certificates and reports as standard

(Posted on 20/12/21)

Leading Classification Society ClassNK will make electronic certificates and reports issued for ships... Read more


Saudi shipowners commit 100+ vessels to CSM

(Posted on 20/12/21)

A leading group of progressive Saudi owners and operators have committed over 100 offshore assets to... Read more


BMA announces agreement for representation in South Korea

(Posted on 20/12/21)

The Bahamas Maritime Authority (BMA) announces that it has signed an agreement with Ben Line Agencies... Read more


Initial deaths in enclosed spaces research results revealed

(Posted on 13/12/21)

Enclosed space deaths continue to be one of the biggest occupational hazards aboard ship.Several years... Read more


Festive dishes lift seafarers’ spirits

(Posted on 13/12/21)

Festive and celebratory dishes can lift the spirits of crew members who are spending more time away... Read more


ClassNK releases Guidelines for Remote Surveys

(Posted on 13/12/21)

Leading Classification Society ClassNK has released its “Guidelines for Remote Surveys (Ver. 3... Read more


Sailors SocietyThe Wolfson Centre for Bulk Solids Handling Technology Cleveland Cascades LtdCimbriaTMS Awards 2021Vigan
  • Telestack
  • Cleveland Cascades Ltd
  • TMS Awards 2021
  • Port of Stockton

Subscribe to our newsletter

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