SHIPPING BUSINESS IV

Unit- 1 Developments in International Seaborne Trade Part 1 WORLD SEABORNE TRADE & EMERGING TRENDS IN INTERNATIONAL SHIPPING For shipping, all stands and falls with worldwide

macroeconomic conditions.

Developments in the world economy and merchandise trade are also driving developments in seaborne trade.

World seaborne trade in 2011 grew by an estimated 7 per cent.

Tanker trade 33%, Dry Cargo 40% Containerized cargo 20%

The five major dry bulks, namely iron ore, coal, grain, bauxite and alumina and phosphate.

Asia is by far the most important loading and unloading area, with a share of 40 per cent of

total goods loaded and 55 per cent of goods unloaded.

Other loading are the Americas (21 per cent), Europe (19 per cent), Oceania (11 per cent) and Africa (9 per cent).

EMERGING TRENDS INTERNATIONAL SHIPPING

IN

1) A Global new design a potential growth in regionalization; multilateral trade negotiations; the proliferating trade agreements; efforts of balancing global economic growth and trade flows; and the complex nexus between energy

security, oil prices, transport costs, climate change and generally environmental sustainability.

2) Energy security, oil prices and transport costs 3) Cutting carbon emissions from international shipping 4) Environmental sustainability

and

corporate responsibility 5) Maritime piracy related costs

social

and

STRUCTURE OF THE WORLD FLEET

The containership fleet 1.6% (1980) to 13% (2011).

 35 per cent of seaborne perishable reefer cargo was transported by specialized reefer vessels

Dry bulk fleet 27% (1980) to 38% (2011).

Oil Tanker fleet 50% (1980) to 34% (2011).

 In January 2011, there were 103,392 seagoing commercial ships in service

In 2011, Container ships increased to 8.7 per cent over 2010.

The general cargo fleet remained stable.

LNG increase 2010.

fleet in 2011

6.6% over

Among oil tankers, it is estimated that about 26 million dwt of single-hulled ships are still active, although they were scheduled to be phased out by the end of 2010 to reduce the risk of oil spills. They are largely deployed in developing countries, including intra-

Indonesian traffic, and for exports from Saudi Arabia to India and Egypt.

Under exceptions permitted by IMO, singlehulled tankers are allowed to trade until 2015, so long as they are under 25 years old and are able to pass a condition assessment survey.

Structure of World fleet in 2011

600 532 500 400 300 t w d f s n o l i M 200 100 0 Dry Bulk Vessel Oil Tanker Container Ship 184 475

Gen

Vessel Types

OWNERSHIP OF THE WORLD FLEET

As on 2011, owners from Greece controlled an estimated 16.2 per cent of the worlds deadweight tonnage a record amount, equating to more than 202 million dwt.

Next were Japan (15.8 per cent), Germany (9.2

per cent) and China (8.6 per cent).

In terms of vessel numbers, owners from Germany, Japan and China have more ships than Greek owners.

In terms of nationally flagged and nationally owned tonnage, the Greek fleet continues to be by far the worlds largest,

accounting for 65 million dwt, followed by the Chinese-owned and -flagged fleet which accounts for 46 million dwt.

Eight of the top ten ship owning countries use foreign flags for more than half of their tonnage.

The exceptions are the United States, which uses

the national flag for 53 per cent of its nationally owned fleet, and owners from Hong Kong (China), who use the flag of Hong Kong (China) for 75 per cent of their tonnage.

Together, the top 35 shipowning countries have an estimated market share of 95.6 per cent of the world tonnage.

The market share of the top 20 liner shipping companies reached 70 per cent of TEU capacity in January 2011.

The highest year-on-year growth was recorded by Chilean carrier CSAV (Compaa Sud Americana de Vapores), followed by PIL from Singapore, and Israels Zim.

Maersk Line from Denmark occupy the top position MSC (2nd) and rd CMA CGM (3 ) Compagnie Maritime d'Affrtement / Compagnie General Maritime,

grew three to four times faster during the year.

END OF UNIT- 1

SHIPPING BUSINESS IV
Unit- 2 Developments in International Seaborne Trade Part 2

REGISTRATION OF SHIPS In 2011, more than 68 per cent of the worlds tonnage is registered under a foreign flag.

 Most of the major flags of registration are notably from Panama, with 306 million dwt (21.9 per cent of the world fleet), Liberia (11.9 per cent) and the Marshall Islands (7.1 per cent).

In January 2011, the 35 largest flags of registration together accounted for 93.8 per

cent of the world fleet, a further increase from the 93.2 per cent share of one year earlier.

The top five registries together accounted for 52.6 per cent of the worlds dwt, and the top ten registries accounted for 72.7 per cent both figures again showing increases over the previous year.

 As regards the number of ships, the largest fleets are flagged in Panama (7,986), United States (6,371), Japan (6,150), Indonesia (5,763), China (4,080) and Russian Federation (3,485).

SHIPBUILDING, DEMOLITION VESSEL SUPPLY

AND

1. Deliveries of newbuildings The year 2010 set a new record in the history of shipbuilding, the deliveries recorded amounted to 3,748 ships, with a total gross tonnage of 96,433,000 GT.

 In the container sector especially, nondeliveries amounted to an estimated 39 per cent of the order book.

In terms of gross tonnage, 45.2% Dry bulk carriers, 27.7% Tankers. 15.2% Container ships

2. Demolition of ships Demolitions of tankers more than doubled, whereas demolitions of container ships decreased by more than half.

3. Vessel Supply As demand has picked up, new orders have resumed. The orders placed with Japanese shipyards as at January

2011 had more than tripled compared to one year earlier.

End-of-2010 China suggest orders in shipyards fourfold in the one year.

data for that new Chinese increased space of

Many of the new orders are for container ships, with the value of the

vessels ordered during the first three months of 2011 reportedly amounting to $7 billion compared to orders worth $2.8 billion for dry bulk ships and just $0.5 billion for tankers

FREIGHT RATES
The price that a carrier, that is, a ship-owner or
1)

charterer, charges for transporting cargo is known as the freight rate.

2) The freight rate depends on many factors, including the cost of operating the vessel (for example, crew wages, fuel, maintenance and insurance); the capital costs of buying the vessel, such as deposit, interest and depreciation; and the cost of the shore-side

operation, which covers office personnel, rent and marketing. 3) Freight rates are not all-inclusive but a subject to numerous additions, for example, the currency adjustment factor, terminal handling charges, war risk premiums, piracy surcharges, container seal fees, electronic release of cargo fees, late fees or equipment shortage fees.

4) Maersk Line, the largest liner shipping company, lists on its website 107 possible fees and surcharges. 5) In general, freight rates are affected by the demand for the goods being carried and the supply of available vessels to carry the goods.

6) In addition to the fluctuations in supply and demand, the bargaining power of the service user (the shipper), the number of competitors and the availability of alternative transport modes also affect price.

7) In the tanker market, ship operators decided to use very large crude carriers (VLCCs) and ultralarge crude carrier

(ULCCs) as floating storage facilities. The advantage of laying up tanker vessels is that the cargo can be quickly put into storage by anchoring the vessel at a suitable place.

8) Freight rates can be obtained through an agent or shipbroker. The shipbroker, whose role is to bring together cargo and vessel owners, may

calculate, publish maintain indices historical data.

and on

PORT AND MULTIMODAL TRANSPORT DEVELOPMENTS 1. Container Throughput The top 20 container ports combined accounted for approximately 47.9 per cent of world container.

 In 2009, the top 20 container ports recorded negative growth, except the ports of Guangzhou (China), Tanjung Pelepas (Malaysia) and Tianjin (China).

2. container operators

International terminal

 Container terminal operation is dominated by a few global players that operate a portfolio of terminals in different ports around the world.

In general, the terminal operators experienced increased revenue.

The major international container terminal operators are

Hutchison Port Holding of Hong Kong, China, with a combined throughput of 75 million TEUs

Following closely behind is APM Terminals, with an estimated 70 million TEUs.

PSA International of Singapore increased its throughput of containers

by 14.4 per cent to 65.1 million TEUs.

China Merchants Holdings International increased its throughput in 2010 by 19.2 per cent to 52.3 million TEUs with the launch of new operations in Vietnam and Sri Lanka.

 DP World of Dubai increased its container throughput by 14 per cent to 49.6 million TEUs.

COSCO Pacific container throughput grew by 19 per cent to 48.5 million TEUs.

3. Liner connectivity

shipping

 Shipping connectivity is an important determinant of trade costs, and understanding them will allow policymakers to improve their countrys trade competitiveness.

The LSCI covers 162 coastal countries and is made up of five components: (a) the number of ships, (b) their container carrying capacity,

(c) the number of companies, (d) the number of services provided and (e) the size of the largest vessels that provide services from and to each countrys seaports.

END OF UNIT-2