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 Today


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

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

People & Company News

Danish Maritime Days Themes Announced

Four themes at this year’s Danish Maritime Days will highlight some of the most important challenges and opportunities which the global maritime industry is facing, organizers said.

CMA CGM Proceeds with NOL Takeover after China Okay

CMA CGM, the world's third-largest container shipping firm, is to go ahead with its planned acquisition of Singapore's Neptune Orient Lines (NOL) after receiving regulatory clearance from China,

Singapore Exchange in Talks to buy Baltic Exchange

Baltic Exchange privately owned by 380 shareholders. The Singapore Exchange (SGX) is in exclusive talks to buy London's Baltic Exchange, which has been at the

Tanker Trends

Statoil Says Sees European Gas Prices Bottoming Out

Norway's Statoil does not expect European gas prices to fall much further as rising demand from the power generation sector would offset an expected increase in liquefied natural gas (LNG) supply,

Nordic Shipholding Profits below Market Expectations

For the 3 months ended 31 March 2016, Nordic Shipholding A/S generated a profit after tax of USD 1.5 million, compared to USD 2.7 million in the same quarter last year.

Euroseas Faces Headwinds, Reports Loss

Euroseas Ltd. (NASDAQ: ESEA), an owner and operator of drybulk and container carrier vessels and provider of seaborne transportation for drybulk and containerized cargoes,

Logistics

SOLAS Container Weight Requirements FAQ

With new rules regarding the declaration of the accurate gross mass of a packed containers due to enter force, the International Maritime Organization (IMO) answers

Baltic Index Down on Lower Demand for Larger Vessels

The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry bulk commodities, fell on Wednesday hurt by sluggish demand for large vessel sizes.

Commodities Shipping Firms Struggle to Ride Out Worst Downturn

Shipping companies transporting coal, and iron ore and other commodities are urgently seeking ways to conserve cash and withstand the worst market downturn on record

Consulting

IMO to Prevent Cyber-attacks

At a meeting of the IMO's Maritime Safety Committee (MSC), it was recognised that ships may also be exposed to so-called cyber-attacks. Now, the IMO wants to

APL Reduces Carbon Emissions by 45.5%

APL today announced that it has reduced its fleet carbon dioxide emissions by 45.5% in 2015, compared to its emissions level in 2009. This achievement marks APL’s

Rising VLGCs fleet Impact LPG Freight Rates

LPG shipping freight rates are forecast to deteriorate further through 2016 as a result of the fast rising fleet of Very Large Gas Carriers (VLGCs) which has already

 
 
Maritime Security Maritime Standards Navigation Offshore Oil Pod Propulsion Port Authority Salvage Ship Electronics Ship Repair 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: 0.1129 sec (9 req/sec)