Definition
Basic
The ships costs are proportional to the vessels size, which is usually measured considering its deadweight tonnage (DWT), i.e., the amount of how much weight the ship can carry, in Tons. For new oil tankers, the price varies from 18 million to 47 million, accordingly to its carrying capacity, respectively: 32.000 to 105.000 DWT.
History
Origin
According to Devanney (2006) the first successful bulk tanker, the steam-powered ship Glückauf, was build in 1886. Tankers developments were benefited by the industrial revolution of engines, valves and others system which has improved the efficiency and security of the transportation. Following the need of oil transportation and other fuels, tankers developed quickly to massive vessels as seen today.
Current Supply and Demand
Developments in China are particularly noteworthy with regard to the supply of and demand for shipping services. On the demand side, Chinese containerized exports make up a quarter of the world total. On the supply side, Chinese shipping companies are among the fastest growing, and the country is home to the most important container and crane manufacturers. Between 2008 and 2009, China overtook Germany as the third-largest ship owning country, Japan as the second-biggest shipbuilding country, and India as the busiest ship-recycling country.
LNG Demand
Global LNG demand will increase to the equivalent of 31.1 billion cubic feet a day in 2011, according to Barclays Capital. China, the world’s biggest energy consumer, bought 87 percent more LNG in 2010, customs data show. While Asia led growth in demand last year, it will be Latin America and the Middle East this year, Barclays estimates.
LNG Supply
Since the first LNG shipment from Lake Charles in Louisiana to the U.K. in 1959, the industry has expanded to import facilities in 23 countries. Exxon Mobil Corp says natural gas will be the fastest-growing major fuel through 2030 and bought XTO Energy Inc. in June for $34.9 billion, giving it proprietary technology used to get gas.
Money Involved
Costs
The ships costs are proportional to the vessels size, which is usually measured considering its deadweight tonnage (DWT), i.e., the amount of how much weight the ship can carry, in Tons. For new oil tankers, the price varies from 18 million to 47 million, accordingly to its carrying capacity, respectively: 32.000 to 105.000 DWT.
Turnover
Since the recession took hold in the second half of 2008, energy demand has tapered off, starting in late 2008 and continuing during 2009. Consequently world shipments of tanker trade volumes, including crude oil, petroleum products and liquefied natural gas (LNG) fell by 3.0 per cent in 2009. Total tanker cargoes loaded amounted to 2.65 billion tons, down from 2.73 billion tons loaded in 2008.
Value
In terms of value, world merchandise exports fell by 22.9 per cent. The total loss in world trade over 2008–2010, compared to what the situation would have been without the crisis (at the trend growth rates) is estimated at $5.0 trillion, or about 12.7 per cent of world output in 2009.
Use
Gas Tankers
While owners of oil tankers and coal carriers are slowing down, anchoring ships and scrapping them because rental rates have been unprofitable, gas ships are sailing at the fastest speeds since at least 2008, data compiled by Bloomberg show. Average spot LNG tanker rates will about double to $70,000 a day this year, the highest since 2007.
Production
Deliveries
At the beginning of 2010, the world merchant fleet reached 1,276 million deadweight tons (dwt), an increase of 84 million dwt (7%) over 2009. This growth resulted from record new deliveries of 117 million dwt, as against demolitions and other withdrawals from the market of approximately 33 million dwt.
Crisis
In spite of the economic crisis, new deliveries in 2009 grew by 42% over 2008 as a result of ships having been ordered prior to the downturn in demand. The resulting oversupply of tonnage then led to a surge in demolitions of older tonnage by more than 300 per cent.
Grow
Against a decline in world seaborne trade of 4% in 2009 as compared to 2008, the world fleet continued to grow by 7% during 2009. Accordingly, the overall fleet productivity in 2009 – measured in tons of cargo carried per deadweight ton – decreased further compared to the 2008 figures. The global average volume of cargo in tons per carrying capacity dwt decreased, and the average ship was fully loaded only 6.6 times in 2009 compared to 7.3 times in 2008.
Productivity
The productivity of oil tankers in terms of tons carried per dwt decreased by a further 5.6 per cent, from 6.7 in 2008 to 6.3 in 2009; for dry bulk it decreased by 5.5 %, from 5.3 to 5.0 tons; and the cargo volumes carried by the residual fleet decreased by a staggering 18.3 per cent, from 10.7 to 8.7 tons per dwt.
Challenges
Emerging Issues
According to the UNCTAD report, the challenging issues emerging for the sector are developments in the energy markets and their potential implications for transport costs and trade; safety; security; labour/seafarers’ considerations; and, increasingly, environmental protection and sustainability, with the challenge of climate change currently the top priority.
Climate Change
The United Nations Climate Change Conference held in 2009 under the auspices of the UN Framework Convention on Climate Change (UNFCCC) came to a conclusion having taken no specific decision regarding shipping. The International Maritime Organization (IMO) kept the main issues under consideration: The mandatory application of technical measures developed by IMO’s Marine Environment Protection Committee (MEPC) (e.g. the Energy Efficiency Design Index) and the adoption of market-based measures (levy or tax on ship bunker fuel and emissions trading). The shipping industry will then be expected to play its role in addressing the climate change challenge.
Security
Security remains a major consideration for shipping. While enhanced security measures in transport and across supply chains are now part of doing business, some developments – especially at the national and regional level – have implications for a globalized industry such as shipping.
Labour and Manpower
Another emerging challenge for shipping relates to labour and manpower. Recognizing the importance of this issue, IMO designated 2010 as Year of the Seafarer, against a background of increasing concern about a looming global crisis in seafaring. The persistent shortage in skilled labour was documented n the 2005 BIMCO/ISF Manpower Report.
Possibilities
CO2 Reductions
Some shipping companies are already taking action, an example of this being A.P. Moller–Maersk’s reduction of its CO2 emissions by 9.0 % in 2008 (compared to 2007), which led to a saving of $500 million through slow steaming, slippery hull coating, better propellers and other efficiency measures. More recently, A.P. Moller-Maersk and Lloyd’s Register have teamed up in a two-year pilot programme to test the use of biodiesel fuel. The ultimate objective for the company is to cut emissions by 50.0 % by 2020, and by 70.0 % by 2030.
Key Countries
The Top Five Countries with the Largest Controlled Fleets
(2009)
1. Greece
2. Japan
3. China
4. Germany
5. Korea
The Top Five Territories with the Largest Controlled Fleets
(2009)
1. Singapore
2. Shanghai
3. Hong Kong
4. Shenzhen
5. Busan
Key Companies
The Five Top Ranked Operators of Container Ships
(January 2010)
1. Maersk Line
2. MSC
3. CMA CGM Group
4. Evergreen Line
5. APL
Prospects
World Export
The prospects for 2010 are improving. Assuming no new upheavals in the global economy, and the confirmation of the nascent global recovery, the World Trade Organization (WTO) expects world export volumes to rebound and grow at 9.5 % in 2010. Developing countries and countries with economies in transition are expected to drive the recovery, with an annual growth rate of 11.0 % (7.0 % for developed economies).
Profit, People, Planet
Overall
Tankers transport massive amount of products, which in most cases are extremely hazardous to the environment and involves huge amount of money transactions. Therefore, is a critical business regarding the key concepts of Global Compact, such as human rights, labour, environment and anti-corruption. In this report Nordic Tankers communicates its CSR policies developed from UN Global Compact.
Miscellaneous
Port and Multimodal Transport Developments
World container port throughput declined by an estimated 9.7 per cent to 465.7 million TEUs (20 foot equivalent unit) in 2009. Chinese mainland ports accounted for approximately 23.3 per cent of the total world container port throughput. UNCTAD’s Liner Shipping Connectivity Index revealed that between 2004 and 2009, the ranking of the Least Developed Countries (LDCs) improved by 3 points.
The LDCs’ average ranking in 2009 was 109, compared to 76 for other developing countries and 68 for developed countries. In 2009, there were 15 LDCs that had only one to four service providers. This was almost a doubling compared to 2004, when there were only 8 LDCs with only one to four service providers.
The global trucking sector registered a compound annual growth rate in revenue of 7.8 per cent between 2004 and 2008. In the rail sector, freight and passenger services achieved a compound annual growth rate in revenue of 6.3 per cent during the period 2003–2007. Inland water transportation continues to remain underutilized in many economies.
Transition to Globalisation
International Oil Transportation
Very few commodities have become as vital as petroleum since it can be used as a source of energy as well as a raw material in the manufacturing of plastics and fertilizers. As a commodity of strategic importance, petroleum has for long been the object of geopolitical confrontations.
Globalisation > Economy > Energy > Sources > Non-Renewable > Oil
Transition to Tools
Government Response to Oil Price Volatility
This report examines the policy responses of 49 developing country governments to world oil price movements. It examines issues related to oil price levels and volatility in the downstream petroleum sector and other sectors where oil is an important input—such as transport, fisheries, and agriculture—from the point of view of consumers.
Tools > Global > UN > Policies > Economy > Energy > Non-Renewable
Transition to Actors
Oil Industry's Increasing Focus on CSR
The oil and gas sector have been among the industries that have championed CSR, partly because of the negative effects of day to day operations, such as oil spills, and the resulting protests of civil-society groups and indigenous people.
Actors > Business > PPP > CSR
