Clipper Oil: Latest Maritime News - Number of Active Shipbuilders Falls by 62% Since 2009

July 21, 2017

Latest Headlines

Port of Los Angeles on Track for Record Year for Containers

IMO Rules out Possible Delay to 2020 Date for 0.50% Global Sulfur Cap on Bunkers

Number of Active Shipbuilders Falls by 62% Since 2009

Ports of LA and Long Beach Aim for Zero Emissions

Oil Closes at 6-Week High as U.S. Inventories Fall

LNG's Uptake as Bunker Fuel to Hinge on Commercial Interests

Dry Bulk Shipping Rates Flounder Despite Rising Chinese Imports

Autonomous Vessels: Not So Remote

Port of Los Angeles on Track for Record Year for Containers

Capped by a busy June, the Port of Los Angeles-the number container port in the North America-reports that it closed its 12-month fiscal year with recording breaking results, with total cargo volumes of 9.2 million TEUs. Volumes increased 8.1 percent in June compared to the same period last year, marking the second busiest June in the Port's 110-year history.

During the Calendar Year 2016, the port was the top container port in North America, handling 8.86 million TEUs, ahead of the Port of Long Beach at 6.78 million TEUs, Port of New York/New Jersey, 6.25 TEUs, Port of Savannah, 3.64 million TEUs, and Port of Seattle/Tacoma, 3.62 million TEUs. The Port of Los Angeles expects to surpass last year's totals.

This June, loaded imports at the Port of Los Angeles increased 4.7 percent to 372,272 TEUs. Loaded exports rose 3.5 percent to 145,527 TEUs.

IMO Rules out Possible Delay to 2020 Date for 0.50% Global Sulfur Cap on Bunkers

The International Maritime Organization's (IMO) has ruled out any delay or phased transition of the lower 0.50 percent global sulfur cap on bunkers set to come into force in 2020, the International Bunker Industry Association (IBIA) has said in a report following its attendance at last week's 71st session of the Marine Environment Protection Committee (MEPC 71).

Among the points up for discussion were two papers that suggested IMO should collect data to better understand how regional variations if refining capability as well as the uptake of scrubbers by vessels would impact the supply and demand picture for bunkers in 2020.

"Obtaining such data on the cusp of the implementation date, along with non-availability reports provided to the IMO from the start of 2020, would help assess where availability of compliant fuels is problematic and also get a clearer picture of when and how the situation is improving," stated IBIA at MEPC 71.

Number of Active Shipbuilders Falls by 62% Since 2009

There are just 358 active shipbuilding yards around the world today, a figure that will continue to decline, according to a report from Clarkson Research. The figure is down by 62% from 2009, near the peak of the current shipbuilding cycle when there were a record 934 active yards globally.

An active yard is defined by Clarkson Research as one with at least one unit (1,000+ gt) on order.

"The largest drop has been in the bulker sector, but the number of active yards has also declines significantly elsewhere. Furthermore, 30% of currently active yards are set to complete construction of ships on their orderbook by the endo f this year. With these trends in place, it will be no mystery as shipyard capacity continues to slide," Clarkson Research noted.

Ports of LA and Long Beach Aim for Zero Emissions

The US' largest two ports, neighboring Port of Los Angeles and Port of Long Beach, have released the draft of their proposed 2017 Clean Air Action Plan (CAAP) Update, targeting zero greenhouse gas emission from trucks and cargo equipment by 2035.

It plans to invest $14bn over the coming years in new, clean-air technologies. That's a pretty penny and the draft plan calls for the ports to increase funding advocacy and collaboration with partners.

There are four prongs to the clean-air plan. First is the phasing in of clean-engine standards with the aim of eliminating diesel trucks within 18 years.

Oil Closes at 6-Week High as U.S. Inventories Fall

Oil futures settled at their highest level in about six weeks Wednesday after U.S. government data showed a sizable decline in U.S. crude stockpiles for a third week in a row.

The August contract for West Texas Intermediate crude US:CLQ7 which expires at Thursday's settlement, tacked on 72 cents, or 1.6%, to finish at $47.12 a barrel on the New York Mercantile Exchange after trading as high as $47.26. September Brent crude LCOU7, -2.78% traded on ICE Futures Europe rose 86 cents, or 1.8%, to $49.70 a barrel.

Both WTI and Brent oil settled at their highest levels since June 6, according to FactSet data.

"Over the past 15 weeks, U.S. oil inventories have fallen a good 13 times, and in most cases, the falls were more pronounced than expected," said Fawad Razaqzada, technical analyst at Forex.com.

LNG's Uptake as Bunker Fuel to Hinge on Commercial Interests

Commercial interests and infrastructure development will be critical to acceleration of LNG bunkering globally, despite environmental considerations and market fundamentals strongly in favor of its use as a marine fuel, sources at an industry event in Singapore said this week.

Pricing of LNG as bunker to hinge on right index benchmarking
Current LNG-MDO spread offers only marginal incentive
Push from ports crucial for LNG bunkering success

"Despite LNG's many advantages, including it being nontoxic and a fuel with relatively high energy density, people are worried about its potential for bunkering and are still pondering over how it is going to develop," Peter Godfrey, managing director for Singapore at Energy Institute said at the 3rd LNG Marine Fuel Forum 2017 organized by PetroMin.

Dry Bulk Shipping Rates Flounder Despite Rising Chinese Imports

Shipping prices of commodities are showing no signs of rising despite growing imports of iron ore, coal and soybeans by China, which has a huge influence on the global shipping market.

A steady stream of new vessels is keeping capacity up, preventing prices from taking off.

The Baltic Dry Index, which measures a number of daily time charter rates for different sizes of cargo ships, has been hovering around 800 since June. The BDI was first published in January 1985 at a level of 1,000 points, and reflects the rates that freight carriers charge to haul solid commodities such as iron ore, coal, cement and grain.

After topping 1,300 at the end of March, the index has been declining steadily since Mid-April.

Autonomous Vessels: Not So Remote

Once thought to be a mere concept on the distant horizon, Unmanned Surface Vessels (USVs) are garnering increasing attention in the maritime industry as a means to cut costs, increase efficiency, and enhance safety. While some view USVs as more akin to futuristic science fiction, in reality, unmanned vessels are far from a novel concept-Nikola Tesla envisioned maritime drones in his November 8, 1898, patent for "Method of and apparatus for controlling mechanism of moving vessels or vehicles." More recently, unmanned and autonomous technology has been developed in multiple industries, in particular in the subsea sector.

Projections of practical implementation into the maritime surface sector have rapidly shifted from a mere concept decades away to the immediate future. Today, innovators are not only developing USV technology, but are also conducting on-the-water testing of USVs. As a result, the potential applications and benefits of unmanned technologies are driving investment and shaping the conversation of both regulators and the industry.

The question is no longer if, but when. And the answer to when, in some regards, is now.

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We hope your vessels are having success out there and look forward to working with you in the near future.