Tankship Owner Warns of 'Russian Roulette' Market

Press Release
Tuesday, April 16, 2013
Euronav Tankship: Photo courtesy of Euronav

Euronav reports its net loss slipped to US$ 10.7 million in the first three months of 2013, compared with US$ 9.0 million a year earlier.

In its Q1 2013 financial report Euronav makes broad observations on the global tanker market as follows:

The first quarter has seen moderate growth in cargoes comparing 2013 over 2012 and, due to changes in trading pattern, a greater increase in ton-miles. Nevertheless the overall returns for tanker shipping measured in TCE were lower. The supply side of the market remains the fundamental problem. The world fleet continues to increase as the newbuildings contracted up until 2010 are being delivered albeit on a delayed schedule compared to the original contractual delivery dates. More importantly owners of older vessels do not yet scrap them, whereas higher scrapping activity is fundamental to any potential rebound in the market.
 
This oversupply is exacerbated by the market structure. Charterers and their brokers continually pressure owners to accept lower rates to reduce the cost to charterers without a second thought to the return to the owner. The levels reached today are no longer sustainable even for an owner with fully written down assets as net freights often are not enough to pay for basic ship operations let alone longer term maintenance or dry docking. Owners have taken all the measures available to them such as slow steaming and engine retrofitting but the market structure simply absorbs these savings and passes them on to the charterers.

Paddy Rodgers, CEO of Euronav commented: "The risks associated with shipping crude oil have not reduced or gone away but the companies responsible for managing those risks are not being paid sufficiently to take the steps necessary to do so. In any market this will result in the risks going unmanaged. “The market is playing Russian roulette and on one voyage one day one charterer will find out there was a bullet in the gun after all. When that happens, do not call the broker!” commented."
 

 

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter January 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Delia Succeeds Schmidt as Ohmsett Program Manager

MAR Incorporated has named John Delia the Program manager for Ohmsett – The National Oil Spill Response Research & Renewable Energy Test Facility, succeeding Bill Schmidt who retired in December 2015.

SBM Offshore: US Authorities Reopen Corruption Probe

SBM Offshore, the world's top oil production ship leasing company, said on Wednesday that U.S. authorities had re-opened an inquiry into bribery allegations involving the Dutch company.

The Next Generation of Hull Performance Management

Hull performance monitoring solutions can offer significant fuel savings potential, a fact that is prompting growing interest from the maritime industry. To spur

Tanker Trends

Top 10 Shipowning Nations by Value

VesselsValue has provided a list ranking the top shipowning nations by value, including the percentage change difference against 2015 figures. Although the

2016 a Busy Year for VLCC Deliveries - BIMCO

When it comes to delivering brand new VLCCs from shipyards in South Korea and China to owners and investor across the globe, 2016 is off to a flying start. Six

U.S. Okays ConocoPhillips Alaska LNG Exports

The U.S. Department of Energy approved ConocoPhillips' application to export about 40 billion cubic feet of natural gas from its Kenai liquefied natural gas export

Finance

Funding Secured for Project to Deepen the Delaware River

Dennis Rochford, president of the Maritime Exchange for the Delaware River and Bay, announced that President Obama’s FY17 proposed budget includes $33 million for the Delaware River Deepening Project.

Top 10 Shipowning Nations by Value

VesselsValue has provided a list ranking the top shipowning nations by value, including the percentage change difference against 2015 figures. Although the

Port of Hamburg Reports Bulk Cargo Jump in 2015

The Port of Hamburg reports higher bulk cargo throughput and strong growth in rail and inland waterway seaport-hinterland traffic in 2015 – downturn in container handling.

 
 
Maritime Security Maritime Standards Offshore Oil Pipelines Port Authority Ship Electronics Ship Repair Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | 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: 0.1030 sec (10 req/sec)