BIMCO: High Bunker Prices Aggravating Tonnage Oversupply

by Ship & Bunker News Team
Thursday January 9, 2014

High fuel prices are encouraging ship owners to order more vessels, despite a continuing serious oversupply of ships, John Denholm, president of the Baltic and International Marine Council (BIMCO), writes in the organisation's Reflections 2014 publication.

"It is estimated that across the bulk carriers, container and tank fleets there is over 20% more tonnage than required," Denholm said.

"The oversupply is aggravated by very high bunker prices; on the one hand this is forcing slow steaming that is absorbing some of the over-supply, on the other hand, it is driving the desire for new energy efficient ships.

"As a result, a worrying amount of ordering is taking place, adding tonnage to an already excessive world fleet."

BIMCO predicts that market fundamentals for the industry will improve as the global economy continues to recover and fleet expansion growth slows, with "windows of sustainable earnings" occurring more often.

The group says that regulations, particularly those concerning environmental issues, will represent a major challenge in the coming year.

"The ever increasing regulatory requirements impose significant costs on our industry at a time when it can ill afford them," Denholm said.

Drewry warned in October that container ship owners must work to limit capacity growth, with the global fleet projected to increase by 7.4 percent in 2014 while global shipping rises more slowly.

Ship & Bunker News Team
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