Profitable Short Sea Market Not Before 2020

Marinelink.com
Thursday, August 29, 2013

The second Bloem Doze Nienhuis short sea study shows a cargo demand of around 1.8 billion tons between 2005 and 2012. In the same period the supply of the short sea fleet increases by 20%, from 38-47 million tons dwt.

In 2005, the short sea industry witnessed a reasonable level of profitability. With an annual growth of demand by 4% and a stable fleet size, the market will reach a new balance only in 2020.

The first Bloem Doze Nienhuis study signalled strongly volatile freight rates, mainly caused by a fragmented supply of tonnage. Mergers, joint-ventures and pooling agreements were suggested to improve utilization rates of vessels, as were as a better use of economies of scale.

Freight rates
During 2012 and the first half of 2013 freight rates reached new all-time lows. At the same time, demand from two main industry sectors using short sea transport (steel and forest industry) remains at the low level.

The authors propose the design and implementing of a reliable and representative short sea freight index, which professionalizes the industry and provides more transparency to stakeholders.

Financial performance
An analysis of five large players in the industry shows that asset light owners/operators perform better than competitors with large owned fleets. Problems with financing and losses seem to concentrate in the end of the chain, with the ship owner.

Financing is a key problem in the industry right now. Repayment on loans are postponed to avoid executions. When the markets will improve, these postponements will swallow the available cash flow for a number of years.

Bloem Doze Nienhuis
The study has been performed by Johan Wagelaar RA and Rabia Genç MSc. Johan Wagelaar is an associate partner at Bloem Doze Nienhuis and has a long standing experience in the maritime industry. Rabia Genç is a financial analyst at Bloem Doze Nienhuis.

Maritime Reporter November 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Madsen to Chair Norway’s Research Council Executive Board

Henrik O. Madsen appointed chairman of the executive board of the Research Council of Norway   DNV GL president and CEO Henrik O. Madsen was appointed as chairman

Port of Houston Expecting Record Year

The Port of Houston Authority is expecting 2014 to close as a banner year for the port, with 34 million tons of cargo handled through November, Executive Director

Hapag-Lloyd Completes CSAV Merger Capital Increase

Hapag-Lloyd completed the planned capital increase of EUR 370 million (approximately $452.5 million) as part of the business combination with the Chilean shipping

Technology

Liquefaction Terminals to Dominate LNG Capital Expenditure

Capital expenditure (Capex) on global LNG facilities is expected to total $259 billion (bn) over the period 2015-2019, with investments expected to be 88% larger

Ennsub Delivers ROV Deployment Systems

Ennsub has completed the design and manufacture of two workclass remotely operated vehicle (WROV) deployment systems for ROVOP, due to be installed into a newbuild

Wärtsilä to Proceed with first LNG Terminal

Wärtsilä has been given full notice to proceed (NTP) from Manga LNG Oy for the supply of a liquefied natural gas (LNG) import terminal in Tornio, Northern Finland.

News

Port Workers in Argentine Grain Hub End Strike

Port workers in part of the Argentine grains hub of Rosario lifted a work stoppage on Friday, only a day after they went on strike over demands for higher year-end bonuses, a union official said.

Madsen to Chair Norway’s Research Council Executive Board

Henrik O. Madsen appointed chairman of the executive board of the Research Council of Norway   DNV GL president and CEO Henrik O. Madsen was appointed as chairman

Larger Tankers May Offer Better Return Chances

Investors looking for returns in the tanker markets can invest their capital in a variety of ways. Should an owner invest in a VLCC or an Aframax? How about an

Vessels

Damen Outfitting First of Nine Bahamas Patrol Boats

The first of nine Damen Stan Patrol 3007s ordered by the Royal Bahamas Defense Force has arrived at Damen Shipyards Gorinchem in the Netherlands for outfitting.

MARAD Publishes US ATB, ITB Database

The U.S. Maritime Administration (MARAD) released what it is calling a first-of-its-kind public database that chronicles U.S.-flagged, privately owned domestic

New Chinese Shipyard Launches First Ship

The new shipyard facility of Honghua Offshore Oil & Gas Equipment Company in Jiangsu, China, has launched its first ship, an IMT982 Platform Supply Vessel. The vessel,

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Standards Navigation Offshore Oil Pipelines Ship Repair Ship Simulators Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2895 sec (3 req/sec)