Introduction What is tanker?? Tanker is a ship designed to transport liquids in bulk.

Major types of tankship include the oil tanker, the chemical tanker, and the liquefied natural gas carrier. Tankers can range in size of capacity from several hundred tons, which includes vessels for servicing small harbours and coastal settlements, to several hundred thousand tons, for long-range haulage. Besides ocean or seagoing tankers there are also specialized inland-waterway tankers which operate on rivers and canals with an average cargo capacity up to some thousand tons. A wide range of products are carried by tankers, including hydrocarbon products such as oil, liquefied petroleum gas (LPG), and liquefied natural gas (LNG), chemicals, such as ammonia, chlorine, and styrene monomer, fresh water, wine and molasses. Tankers were first used by the oil industry to transfer refined fuel in bulk from refineries to customers. This would then be stored in large tanks ashore, and subdivided for delivery to individual locations. The use of tankers caught on because other liquids were also cheaper to transport in bulk, store in dedicated terminals, then subdivide. Different products require different handling and transport, with specialised variants such as "chemical tankers", "oil tankers", and "LNG carriers" developed to handle dangerous chemicals, oil and oil-derived products, and liquefied natural gas respectively.

999 DWT: Ultra Large Crude Carrier (ULCC) . Shell Oil developed the average freight rate assessment (AFRA) system which classifies tankers of different sizes. At first.000–79.000 tons deadweight (DWT). and the list was extended.999 DWT: Long Range 1 (LR1) • 80.999 DWT: Medium Range tanker • 45. where the tons are long tons: • 10.000–44. The ships became larger during the 1970s.000–159.000–24. Shell consulted the London Tanker Brokers’ Panel (LTBP). To make it an independent instrument. In 1954.000 DWT and Large Range for the then-enormous ships that were larger than 45.000–319.000 DWT. they divided the groups as General Purpose for tankers under 25.Tanker Capacity Tankers used for liquid fuels are classified according to their capacity. Medium Range for ships between 25.999 DWT: Very Large Crude Carrier (VLCC) • 320.999 DWT: General Purpose tanker • 25.000–549.000 and 45.999 DWT: Long Range 2 (LR2) • 160.

In Worldscale negotiations. the charterer acts as the ship's operator and manager. The Worldwide Tanker Normal Freight Scale. it would be expressed as WS 85. by a time charter equivalent rate. the charterer specifies a total volume of cargo to be carried in a specific time period and in specific sizes. the time charter.000 m3) of JP-5 in a year's time in 25. taking on responsibilities such as providing the crew and maintaining the vessel. A completed chartering contract is known as a charter party. often referred to as Worldscale. a fixed price is negotiated for the delivery of a specified cargo. and differ from lump sum rates in that port costs and voyage expenses are generally paid by the charterer. or by Worldscale rate.Chatering The act of hiring a ship to carry cargo is called chartering. and port costs and voyage expenses are also generally paid by the charterer. by rate per ton. Rate per ton arrangements are used mostly in chemical tanker chartering. Tankers are hired by four types of charter agreements: the voyage charter. If a given charter party settled on 85% of the Worldscale rate. In a bareboat charter. and the ship's owner/operator is responsible to pay for all port costs and other voyage expenses. Finally. In a lump sum rate arrangement. or COA.000 m3) shipments. . operators and charterers will determine a price based on a percentage of the Worldscale rate. Time charter arrangements specify a daily rate. The freight rate of a tanker charter party is specified in one of four ways: by a lump sum rate. In a voyage charter. in a contract of affreightment. to perform voyages as the charterer directs. for example a COA could be specified as 1 million barrels (160. Similarly. a charter party set at 125% of the Worldscale rate would be expressed as WS 125. the bareboat charter. The baseline rate is expressed as WS 100. and contract of affreightment. the charterer rents the vessel from the loading port to the discharge port. In a time charter.000-barrel (4. is established and governed jointly by the Worldscale Associations of London and New York. One of the key aspects of any charter party is the freight rate. the vessel is hired for a set period of time. or the price specified for carriage of cargo. Worldscale establishes a baseline price for carrying a metric ton of product between any two ports in the world.

+1.4Mnbd respectively. tanker earnings have slumped still further in part because of a serious deterioration in the strength of the global economy over the summer which has contributed to a downward revision of global crude oil demand growth forecasts – the latest of which was delivered by the International Energy Agency in September when it revised down its oil forecast for 2011 (89. the tanker industry could look forward to a very gradually improving market – albeit trailing somewhat behind most of the rest of the world Since that time.Recent Market Despite very low tanker earnings and strong fleet supply growth at the start of the year. It seemed that if the global economy maintained its slow recovery trajectory. . the tanker market had been buoyed by an upward revision in the IEA’s global crude oil demand forecast for 2011.4Mnbd) by 0. +1Mnbd) and 2012 (90. The market has also been hit by specific factors such as the release of crude oil reserves by the IEA from the strategic petroleum reserve in June – an action precipitated by the failure of OPEC (in the view of the developed economies) to address the loss of Libyan crude oil exports by agreeing to higher quota levels.2Mnbd and 0.3Mnbd.7Mnbd.

and follows on from the South Korean multi fleet operator Korea Line which went bust earlier in the year. while the small Japanese owner. The market is close to the lows of 2009 and the sustained pressure on owners means that some have now started to go to the wall. the South Korea chemical tanker operator is the latest reported casualty. Samho Shipping.Tanker Price Tanker rates both in crude and products have continued to deteriorate. Eagle Holdings declared bankruptcy in the same month. bunker prices have remained stubbornly high as is revealed by the chart (below) comparing WTI and Singapore 380cst. While crude oil prices have turned down since the end of April. The recent downward revision to global demand forecasts mean that pressure is likely to build still further with the market set to continue on an unsustainable trajectory. Omega Navigation filed for Chapter 11 in July. . High bunker prices are contributing to the pressure on tanker shipowners.

it is normal for vessels approaching 5th special survey at around 25 years to be most under pressure to scrap.Tanker Fleet The tanker market’s intractable issue of over supply continues to dog the market with further unrelenting fleet growth. It is estimated that 24MnDwt entered the market in 1H11 compared with 18MnDwt in 2H10 as supply side pressure piles up. However. Slippage remains a mitigating factor but deteriorating demand factors have swamped any benefits. the prospect of heavy repairs would mark the end. Even if these vessels have been written down. It is interesting to compare the current depressed state of tanker scrapping with the much higher level of demolition in the dry bulk sector which was not impacted by single hull phase-out. . During a scrapping cycle. 2011 is set to be the record year for tanker deliveries. It might be thought that the depressed freight market would have already triggered a renewed burst of scrapping but deletions have actually been declining in the year to date. the surge in single hull scrapping peaked last year and took out much of the 20+ fleet leaving relatively few obvious scrapping candidates.

Like the dry bulk sector the precipitous fall in new ordering has resulted in a dramatic and sustained slide in the size of the tanker orderbook. South Korea was the most active shipbuilding country picking up half of the 43 tanker orders placed since April 2011. With earnings expected to remain low. Interestingly almost all of the tanker orders placed since April 2011 have been for the account of independent shipowners.Investor Activity Shipowners remain focused on minimising debt rather than making new investments. . total 2011 orders are likely to fall below the 10MnDwt ordered in 2009 and well below the 32MnDwt ordered in 2010. but during 1H11 reverted to the very depressed levels of 4Q08-2Q09. Large product tankers were the most popular ship type ordered in 2011 with Scorpio and Norden responsible for almost half of the 20 orders in this sector. Ordering had started to fall at the end of 2010. It seems at least some owners feel strong enough to look beyond the current economic crisis.

It gave opportunity to the shipping company to perfome a business worldwide. .Conclusion In conclusion the tanker shipping business give a huge market in marine transportation. Tanker ship make the oil. chemical and liquid transportation more effective and save cost. It also open a brighter future for the human needs.

http://seekingalpha.com/doc/6008299/TANKER-SHIPPING-REVIEW-March2008 .com/business/news/5126249/nordic-americantanker-shipping-s-1q2011-report-the-company-announces-dividend-for-the55th-consecutive-quarter-dividend-and-earnings-improved-in-the-firstquarter-of-2011 3. http://www.istockanalyst.com/article/35506-the-global-shipping-industry-not-sucha-small-world-after-all 2.scribd.References 1. http://www.

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