Tankship Ocean Transportation Demand: Forecasting Essentials

MarineLink.com
Thursday, February 06, 2014
Tankship trade factor: Courtesy of McQuilling Services

Marine transport advisors, McQuilling Services, give an insight into how they forecast the development of tanker demand, which is a constituent part of their recently published '2014-2018 Tanker Market Outlook' report.

At a global level, marine transportation demand is related to world trade, which is directly related to the state of the world economy.  This means that demand for crude oil and petroleum products grows with an expanding global economy.
 
Marine transportation demand for tankers is a derived demand.  It arises from the energy consumption requirements of regional economies.  Petroleum product marine transportation demand arises from matching consumption with refined product production in refining regions.  Integrated with the supply logistics chain for petroleum, crude oil marine transportation demand for tankers arises from matching refinery raw materials requirements with crude oil production.
 
Demand Characteristics
Tanker demand can be defined as the requirement to transport by ship liquid hydrocarbons in bulk from origin to destination.  The parameters comprising tanker demand are several.  Demand is characterized by the type of cargo required to be transported and by extension the ships capable of doing so.  The parcel size of the cargo is a function of the trade and driven by either custom or constraint at the loading port or discharging port.  Related to parcel size is the frequency of the demand for delivery of the cargo.  Finally, cargoes are loaded and discharged in a plethora of locations worldwide on numerous trade routes.
 
Adding to the complexity of calculating tanker demand is the fact that these four parameters are also a function of time.  Fortunately, the practical application is simplified by the way vessels, cargoes and trades have collectively evolved over time.
 
VLCC and Suezmax demand is comprised almost entirely of crude oil transport.  Aframax and Panamax tanker demand is made up of crude oil transport and the carriage of residual petroleum products such as fuel oil.  LR2, LR1 and MR demand is comprised mainly of the transport of clean petroleum products such as gasoline, jet fuel and diesel.
 
Trade Logistics
The evaluation of tanker transportation demand reduces to the understanding how much of what type of cargo is transported on what type of ships over what geographic trade routes.  This latter spatial element is critically important to the proper evaluation of transport demand.  This is because it takes more of the same sized vessels to deliver an equivalent stream of crude oil or products on a longer voyage between load port and discharge port than on a shorter voyage.
 
The schematic to the right here illustrates this point. The various bars represent the number of Suezmax vessels required to deliver 100,000 barrels per day over trade routes of various lengths.  These results are based on round trip voyage assumptions, transporting cargo from load port to discharge port and traveling back to the load port empty (in ballast).  Clearly, the trade dimension to tanker demand must not be neglected.

Tanker demand, with this spatial dimension included, is referred to as a demand matrix or trade matrix.  This trade matrix is characterized by different sized vessels carrying different types of cargoes of crude oil and refined products on voyages between loading regions and discharging regions around the world.  Each of these voyages consumes a specific amount of time directly related to the length of the voyage.  The sum of all of the cargoes requiring transport over all of these distances collectively represents the global demand for tankers at a given point in time, represented in units of ton-miles.
 
A cargo of 280,000 metric tons of crude oil transported from Ras Tanura in Saudi Arabia to LOOP in the US Gulf represents 3,461,080,000 ton-miles of tanker demand.
 
If the characteristics of the trade matrix change in any way, demand for tankers will also be impacted.  Changing trade patterns may elevate or reduce tanker demand.  Shifting volumes, even if offsetting, may give rise to substantial changes in underlying tanker demand by virtue of the trades on which the volumes exist.  In practice, when trading patterns are stable, cargo volume fluctuations lead directly to transportation demand fluctuations.  However, if new trades emerge or old patterns change, the demand effect may be substantial and must be considered.
 
McQuilling Services add that in their 'Tanker Market Outlook' the researchers start with bilateral marine trade of crude and refined products between countries and transform this information into global ton-mile demand by vessel class.
 
For more information go to: www.mcquilling.com

 

 

 

Maritime Reporter June 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Aberdeen Pupils Peek into Subsea Oil & Gas Technology

Pupils at an Aberdeen primary school were given a rare insight into the depths of the oil and gas industry’s subsea sector after getting to sit in the driving

AVEVA, DNV GL's Sesam Integration Cuts Cost

Integration of Aveva and DNV GL's Sesam Reduces Costs in Maritime and Offshore Engineering. Engineers designing ship hulls and offshore floaters can now save

FORAN for Pertamina's Future Ships

FORAN has been chosen by state-owned company PERTAMINA to review the design of their future oil product carrier ships, under construction in a shipyard with the FORAN System.

Tanker Trends

NITC Claims World's Largest Supertanker Fleet

According to the head of the National Iranian Tanker Company (NITC), Iran has 42 very large crude carriers or VLCCs, each able to carry 2 million barrels of oil, reports Press TV.

Teekay LNG Partners Declares Distribution

Teekay GP LLC, the general partner of Teekay LNG Partners L.P. has declared a cash distribution of $0.70 per unit for the quarter ended June 30, 2015. The cash distribution is payable on August 14,

NITC Tankers Chart Western Course

Iran’s largest shipping company NITC, the privatized Iranian shipping company, is in talks for permission to sail in Western waters, says a report in WSJ.   NITC

Logistics

Grimaldi Orders Three PCTCs

After signing an order for the construction of five new ships two weeks ago, the Italian shipowner  Grimaldi Group has signed another contract for the construction

Is It Too Late To Tangle With Spike in Shipping Market

A series of interesting and extreme price spikes is going on in the shipping market today, says Clarksons, provider of global shipping and offshore market intelligence.

NITC Claims World's Largest Supertanker Fleet

According to the head of the National Iranian Tanker Company (NITC), Iran has 42 very large crude carriers or VLCCs, each able to carry 2 million barrels of oil, reports Press TV.

Consulting

New Record Year in Dry Bulk Demolition Underway - BIMCO

The monthly average for the first six months in 2015 is 3.3m DWT. In 2014 the first half year averaged at 1.33m DWT per month.   April 2015 saw 5.36 million DWT being retired from active service,

BMT Awarded Port Geographe Coastal Engineering Contract

BMT JFA Consultants (BMT), a subsidiary of BMT Group,  has been awarded a contract by the Western Australian Department of Transport (DoT) to provide services as

Beier Radio is now Beier Integrated Systems

For 70 years, Beier Radio has provided engineering, sales, and service for marine electronics around the globe. As the corporation marks its 70th anniversary,

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Maritime Standards Naval Architecture Offshore Oil Pipelines Salvage Shipbuilding / Vessel Construction Sonar
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: 0.1963 sec (5 req/sec)