BULK CARRIERS: A Volatile Market
As world trade continues to grow and the bulk shipping surplus in most sectors falls more closely into balance, the components necessary for profitable shipping should definitely be in evidence. As the new year begins, it is timely to reflect on some of the contrasts of the last 12 months to see if the portents for the future are positive.
On the dry bulk side, there is great concern about the orderbook, which is currently running at just under 25 percent of the existing fleet. Capesize owners saw earnings surge from an average of about $17,000/day in 1994 to more than $20,000/day in 1995. By the end of the year however, earnings had fallen flat, with rates dipping below $13,000/day.
However, volatility in rates is generally thought to reflect an approximate balance between supply and demand, where small changes in either exerts considerable influence on price. It would seem, therefore, that the bulk shipping markets are now finely balanced.
South Korea leads the way with bulk carrier newbuildings, with all five large yards involved. As of the end of 1995, Daewoo had orders for 26 ships, with Halla (18), Hanjin (17), Hyundai (30) and Samsung (19) rounding out the market. The seven large shipbuilding companies in Japan are not far behind in orderbook numbers, with Hitachi (12), IHI (11), Kawasaki (6), Mitsubishi (4), Mitsui (9), NKK (14) and Sumitomo (7), vigorously competing for market share.
Prices in the Far East have remained somewhat static over recent months, with the exception of Capesize vessels, which at a price of approximately $45 million, are down compared with a price of more than $50 million paid just two years ago. A good indication of Panamax prices was exhibited recently when Brazil's Docenave paid Korea's Hyundai Heavy Industries $28.7 million apiece for two 70,000-dwt units.
For smaller sizes (approximately 40,000-dwt units), German owners recently paid $23 million each for two ships at Guangzhou in mainland China, while Hamburg-Sud paid $25 million each for two 44,000-dwt units from Brazil's Ishibras-Verolme. Parakou Shipping paid approximately $29 million each for two Panamax (73,000- dwt) units.
IACS Focuses On Safety In a move to improve safety of bulk carriers, the International Association of Classification Societies (IACS) implemented significant advances in the safety regime of standard, single-side skin bulk carriers. The new requirements result from a major study into bulk carrier safety by IACS, which has led the industry with successive measures for a safer fleet.
Encouraged by fewer bulk carrier casualties during 1995, IACS now wants to see improved survivability for the condition most associated with bulk carrier loss — hold flooding while carrying heavy, high density cargo. IACS is proposing higher design in new ships and greater attention to preserving watertight integrity in the existing fleet. For new bulk carriers 492 ft. (150 m) long and larger, new IACS Unified Requirements cover the longitudinal strength in a hold flooded condition and the strength of watertight corrugated transverse bulkheads. In addition, other Unified Requirements will address the strength of the double bottom structure when a hold is flooded. These requirements will apply to bulk carriers loading not only high density cargoes such as iron ore, but also to any other solid cargo of a bulk density one ton per square meter or more. These new requirements will apply to newbuildings contracted after July 1, 1997.
Also, an urgent review is being carried out of member societies' existing requirements for side shell frames, and also on load strength criteria for hatch covers in order to assess their integrity under extreme loads. This review may identify a need to develop appropriate Unified Requirements. For existing ships, IACS members decided to bring forward that element of the enhanced special survey covering all cargo holds of single side skin bulk carriers, 10 years of age and above, of 492 ft. (150 m) and above, which have not been subject to the five-year enhanced special survey. The date of application was to be announced in February, when the details were scheduled to be worked out. The accelerated surveys will have to be completed within 12 months. All bulk carriers should, therefore, have been through the cargo hold element of the five year, enhanced special survey, probably before the end of 1997 — an advance of about 18 months.
This program will build on the advances made through the introduction of the enhanced survey program (ESP) in 1993. However, IACS considers that it is important that the experience of ESP should be learned and, having sought owners' opinions in 1995, is also reviewing the extent and scope of the annual and intermediate (two/12 years) surveys to establish whether any further enhancements are necessary.
To aid those involved with the survey, inspection and operation of bulk carriers, IACS, building on term program concerning pressure measurements aboard a bulk carrier in sea service began on January 21, 1996, as an additional step in the drive to improve the safety of this type of vessel.
The 18-month-long tests, initiated by German classification society Germanischer Lloyd (GL), will be carried out on the 64,000-dwt German-registered bulk carrier Marine Ranger, which has been made available for the project by its owner, Egon Oldendorff, Liibeck. The program is being subsidized by the German government through the Federal Ministry of Research and Technology. The 11- year-old ship is in service between Europe and North and South America.
"This is the first time that pressure measurements are being carried out on a bulk carrier in sea service," said Dr. Hans Joachim Hansen, the engineer and naval architect in GL's Rules Development Department, who is responsible for the project. "Until now, pressure measurements of this kind have only been carried out on models in ship model testing tanks." GL will publish the results of the measurements. A total of 11 pressure gauges have been installed at main sections of the hull to measure the pressure on the hull. In addition, in the same areas, four strain gauges have been installed on the main deck and 32 strain gauges at hold frames and shell, to measure strain/stress behavior due to the motion of the ship at sea.
GL expects to verify load assumptions for sea pressure in the event of heavy pitch and roll, thus improving the strength assessment of local structural details.
The four strain gauges on deck are to provide additional knowledge of the wave bending movements of the hull. GL engineers are hopeful that the gauges and data logging and data processing equipment will withstand the rigors of rough seas during the trial period.
Another system available to shipowners involved in the bulk carrying trade is the BMT Smart system, which currently involves some 35 units being installed by leading operators, including British Steel, P&O Bulk Shipping, Wallem Ship Management, China Navigation and Westfleet AS. BMT has also interfaced its stress monitoring system to the vessel loading instrument on the China Navigation Capesize bulk carrier, Erradale, providing the ship's crew with a global view of related hull data. The system meets the notation standard for stress monitoring recommended by ABS, DNV and LR.
BMT is also currently managing and leading a $3.3 million European Union-funded research program Ship Hull Integrity Program (SHIP) — which will have important benefits for the next generation of stress monitoring systems. This is intended to integrate and extend current ship monitoring technologies and exploit new system techniques to aid decision making. The ship chosen for the test is British Steel's bulk carrier British Steel.
Meanwhile, DNVs work in stress monitoring started with extensive full-scale measurements in the late 1960s supplemented by comprehensive FEM calculations to compare measurements with analysis results. During the 1970s, a series of measurements were carried out during a pioneering Hull Surveillance Project.
In cooperation with Anglo-Eastern Ship Management Ltd., Hong Kong, DNV recently carried out full-scale measurements on a Capesize bulk carrier. The aim was to monitor local and global stress patterns during loading and unloading and when at sea. Measurements were carried out onboard the 170,889-dwt bulk carrier Mineral Zulu.
Strain gauges, accelerometers and pressure gauges were in stalled onboard the ship at 44 locations. The gauges were wired to recording instruments located in the vessel's superstructure and data was transferred to DNV's head office in Oslo at regular intervals for analysis. Supplementary data on the ship's loading conditions, loading rates/sequences and weather conditions were recorded by the ship's officers. This project played a vital part in developing DNV's classification standards for hull strength monitoring.