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

People & Company News

ThyssenKrupp Says Submarines Part of Growth Story

Germany's Thyssenkrupp sees its submarine business as making an important contribution to its growth targets, the head of its Industrial Solutions business area said on Tuesday.

Two Newbuilds Delivered to Star Bulk

Star Bulk Carriers Corp. took delivery on February 27 of M/V Honey Badger (ex HN NE 164) and M/V Wolverine (ex HN NE 165), two 61,000 dwt Ultramax bulk carriers

Brazil Truck Strike Diminishes

Some truck drivers in Brazil continued blocking roads on Tuesday, slowing grains deliveries to southern ports, even as adherence to the strike diminished and a

Tanker Trends

Shipping Industry Faces Shake Up

As global shipping grapples with its worst downturn in 30 years, private equity firms are unwinding massive bets made on the sector in a move set to accelerate

Vessel Sales: February 2015

Vessel sales for February 2015  - (as of March 1) as prepared by Shipping Intelligence, Inc., New York.   Date Reported - Vessel Name - DWT - Built -  - (Age)

Oil Storage at Sea Stalls as Profit Play Fades

Traders are cutting plans to use tankers to store oil at sea as the price incentive recedes, the global head of oil at mining and commodities group Glencore's said on Tuesday.

Logistics

First Ship to Load Soy at Tegram Bound for China

The first ship to load soybeans from the new Tegram terminal in the northeastern port of Ponta Madeira in Sao Luis, Brazil, will berth on March 10, local shipping agents Cargonave said on Tuesday.

Brazil Truck Strike Diminishes

Some truck drivers in Brazil continued blocking roads on Tuesday, slowing grains deliveries to southern ports, even as adherence to the strike diminished and a

Ferguson Appoints Partner OPS-OES

Ferguson Group Singapore, a specialist in the provision of DNV 2.7-1 / EN12079 offshore containers, reefers, tanks, waste skips, baskets, accommodation and engineering

Consulting

Navy Reserve Celebrates Centennial Anniversary

Service members and civilians packed the Pentagon Library Conference Center for the Navy Reserve Centennial Kickoff Celebration March 2. Chief of Navy Reserve Vice Adm.

“Bright Ideas” program - Ash Center - Harvard University

The Ash Center for Democratic Governance and Innovation at the John F. Kennedy School of Government, Harvard University, recognized the Port of Houston Partners

India to Appoint Coastal Shipping Consultant

As part of Narendra Modi government plan to promote coastal shipping, India is all set to appoint a consultancy firm to assist the Shipping Ministry.    The

 
 
Maritime Careers / Shipboard Positions Maritime Security Maritime Standards Naval Architecture Offshore Oil Port Authority Salvage Ship Electronics 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: 0.3087 sec (3 req/sec)