More green ship recycling under way
Ships’ demolition activity has been on the rise over the last couple of weeks. In its latest weekly report, shipbroker Clarkson Platou Hellas noted that “We have witnessed several more units entering the market fray this week and as we edge closer to the end of the year, it will be interesting to see how many more units will be sold for recycling before we arrive in the next decade. Whether Owners are just dipping their toes in the market to ascertain the value of their aging vessels remains to be seen. Frustratingly, for those involved in the recycling industry, trading buyers remain on the peripheral and acquiring the overaged units that should really be destined for the breaking yards. Therefore, whilst we are seeing a considerable amount of more units in the market, actual recycling sales remain limited. There is however certainly more momentum in the market this week and seemingly, more demand from the waterfront in all the three destinations in the Indian sub. Continent and having all three areas in play once again can only help to kick-start sentiment and provide improved rates.
Ship owners return in the dry bulk market
For the most part, ship owners active in the dry bulk market have refrained from a huge buying spree of vessels during 2019, with the freight market underperforming for most of the year. However, over the course of the past week, activity seems to have picked up. In its latest weekly report, shipbroker Allied Shipbroking said that “on the dry bulk side, a step forward was finally taken in terms of volume, given that the market had repeatedly shown signs of mediocre performance as of late. The truth is that except for the Capesize market, which has held at relatively firm levels for many months now, freight rate levels aren’t actually of much help, in order to push for a more robust buying sentiment. Given that, it is difficult to see any steep change take shape in the short term freight market, it is highly unlike that we will see any excessive boost in the SnP market. On the tanker side, a steep correction in terms of activity was due. ”
Ship operating costs rise on higher R&M and insurance spend
Underlying vessel operating cost inflation accelerated moderately in 2019 on higher repair and maintenance and insurance spend, while looking ahead costs are expected to continue rising at a similar pace in 2020 on a hardening insurance market before receding in subsequent years, according to the latest Ship Operating Costs Annual Review and Forecast 2019/20 report published by global shipping consultancy Drewry.
Costs rose for a third consecutive year following marked declines in the capacity ravaged years of 2015-16. Opex costs are heavily linked to developments in the wider shipping market as some, such as insurance, are connected to asset values and others impacted by the ability of shipowners to pay.
Venture capital investment in maritime technology
Venture capital interest in maritime technology has grown significantly in recent years. As barriers to adoption fall, there is still scope for even higher levels of investment.
Historically, the maritime sector was an enthusiastic adopter, indeed pioneer, of new technology. However, there is a widespread perception within the industry that, in recent decades, shipping companies have been slow to capitalise on the benefits of new software and emerging digital technology. There are multiple factors which have acted as barriers to faster uptake, which can be divided into ‘push’ and ‘pull’ barriers. ‘Push’ barriers are those which have prevented those from outside of the industry from developing technology solutions focused on the maritime sector, while ‘pull’ barriers are those which have blocked participants in the sector from adopting new technology.
The last couple of years however, have seen renewed interest, with a clear uptick in discussion of maritime technology, both in our client conversations and public events such as conferences. This can also be seen in terms of the degree of venture capital investment in the sector, which has grown from almost zero a few years ago to reach c. $300 million in 2018.
Drewry publishes first low-sulphur baf reference price
As part of a series of initiatives aimed at bringing greater transparency to fuel costs resulting from the new IMO 2020 low-sulphur regulation, Drewry is pleased to announce the publication of its first low-sulphur reference bunker index tracker. In recent months, both shippers and forwarders have expressed confusion and concern over the timing and transparency of the new charges being introduced by carriers as they transition from IFO 380 (intermediate fuel oil) to the new, low-sulphur fuel standard. Drewry’s new low-sulphur BAF index, which will be updated quarterly, provides a simple indexing mechanism to help determine changes in BAF charges during the lifetime of a contract.
Ports of auckland wants to dredge 2.5 million cubic metres of sediment
Ports of Auckland has applied to dredge 2.5 million cubic metres of sediment from the Waitematā Harbour over the next 15 years. POAL says it needs to deepen shipping channels to accommodate the increasing size of cargo ships, to cater for the city’s growth, with more than 600,000 additional people expected to be living in Auckland by 2043. The application comes as discussion intensifies over the future of the port and its location, with a leaked Government working group report this week recommending it be moved to Northland in the next 15 years. In a resource consent application POAL says currently the largest container ships it handles carry up to 5000 twenty-foot containers (TEU). The 6000 to 7000 TEU ships required a depth of 14m, and New Panamax ships 15.2 million.