Ocean shipping: more cargoes but rate levels still low

Ocean shipping: more cargoes but rate levels still low -Ocean shipping saw improved market conditions during 1984 though it is still beleaguered by excess supply capacities. Demand for bulk tonnage for carriage of iron and coal revived but did not spread to all tramp-market sections; riner vessels were utilized much better on many routes. The more favourable developments were triggered by accelerating economic growth in the industrial countries, the continuous rise of world steel production, and the heavy imports of the USA. Freight rates rose only insignificantly, and tagged far behind levels reached during the 1979/80 upswing. Only large bulk carriers were able to secure considerable gains, if from very low levels. The high US dollar exchange rate boosted the voyage results of companies in countries with devalued currencies, but due to strong competition, dollar freight rates were lower than they would have been without exchange influences. Earnings of many shipping companies remained unfavourable as ship costs often exceeded freight Ireceipts. There were more company collapses and forced sales of ships. These are some observations made by Dr Hans Bohme, of the Kiel Institute of World Economics, in his new annual report, ‘Weltseeverkehr: Steigende Nachfrage ,niedrige Frachtraten’ (Ocean Shipping.. Rising demand - low freight rates), published in the institute’s bi-annual, Die Weltwirtschaft, No 2, 1984. The author summarizes the review below.

The author expects that in 1985 freight markets will develop less briskly be,:ause of a slow-down of economic ‘2xpansion in the world economy, and ,j,f world trade which is to increase by ,,nly S-6%. Also, the gap between the
In the liner services between industrial countries, cargo volumes may be expected to increase. Traffic to and from the USA will be less unbalanced than in 1984 as the dollar is not likely to appreciate further. Services to developing countries may show a hesitant The supply of liner recovery. shipping space will be expanded more slowly than in the preceding years on the whole while on the main routes between Europe, the

MARINE

POLICY

October 1985

USA, and the Far East, under the impact of the new ‘Round-theWorld’ services, the increase will be above the average. Competition will be intense on these routes, and there may be rate wars among conferences and outside lines. With tramp rates continuing to be low, and suitable tramp tonnage in ample supply, there will, however, be little room for further large-scale rate gains in other liner trades, as outsiders operate such vessels in regular services.

0

Tramp shipping markets will profit from expected further expansion of world trade. However, demand from the steel industry will be rather less bouyant than in 1984, as production growth is slowing down, steel consumption is showing signs of stagnation, and rebuilding of stockpiles has ceased,. Transport performances in the coal and grain trades will increase by only about 3% each. Moreover, the USSR, the largest grain importer, will use timechartered ships as well as her own, considerably expanded bulk fleet. Freight rates may again be

0

comparatively favourable for large bulk carriers as only few new-buildings are coming onto the market, and Japanese coal importers are substituting capesize tonnage, in the coal trade from the USA, for vessels using the Panama Canal. Rates for medium-sized bulkers of about 30 00@4S 000 dwt will come under pressure because of rapid fleet expansion. With freight rates showing a weak overall tendency, earnings will hardly improve much for owners. In the tanker markets both demand and rates will be weak. The past year has shown only passing, and locally restricted, upward tendencies; there are no indications of a lasting and sustained expansion of demand in the crude oil trades. Sea transport of oil products may be expected to increase slowly as, for example, new refineries are coming on stream in 1985 in the Arabian Gulf area. The tanker fleet will continue to shrink by an estimated 6%, but in spite of this, VLCC and ULCC capacity will still be greatly in excess of resmallto quirements. As medium-sized tankers are more in demand than VLCC, and have been scrapped in large numbers, the markets of such ships will gradually be better balanced. Tanker rates will hardly rise over the whole size range; market developments, both demand and rates, will presumably be most favourable for medium-sized tankers carrying crude oil. The market position of product tankers will only slowly profit from new product trades.

Thus, unused capacities will remain the crucial factor for markets in 1985. As there is only little scope in most markets for rising rates, shippers will not feel pressed to timecharter more ships. It seems likely that more tankers and even more medium-sized, bulk carriers will be laid up. Excess capacities will not be removed automatically by greater demand in the medium term, with newbuildings being pressed

337

onto an increasing number of markets.

markets.

Likewise,

not help to

ped than

because de-

world

low

increase

rates will

cargo volumes

mand for sea transport inelastic.

is largely price

The surplus,

moreover,

large that it is not simply of

technical

more Ias

ship\

cost-competitive

in

more ships are scrap-

1984,

shipping

and fewer

will

remain

to reserve and protect.

0

built.

scale fishing.

crisis-

tcrs and fishing

ridden for more time to come.

mention

with

older.

vessels from

thu

ly

After

writing

World’,’

Dory

in the Third

turb

I received the Report

International worker?

Conference

and their

of the

of

Fish-

Supporters

which

took place in Romc

last July,

wcrc 100 participants

from 34 nations.

About

There

half of them were really

fish-

fishermen

concerns

from

ten million

150 countries.

small-scale

or poilution;

associate

But the

fishermen.

the

this

The

devising

Among

efforts

in-

measures.

thereby

recommend

towards

the creation

at

confer-

alternatives

local

and

of

national

countries.

Henri Claireaux President of the St. Pierre & Miquelon Committee Asnikres. France

that

of the fish-

reappropriation

their

fishworkers

con-

and

of ;I solid mass based organization

conference of

survival

and the

fishermen‘s

regulatory

fishworkers

directing

countries

fishworker\’

the future

and also

local

in

ecoover-

One of the main

ence is to develop

the sea.

ohscrvers

of

the

through

levels, in developing

and

delegates

and

Therefore.

developing

in July.

that dis-

of

development. discussions

own international

wjorkers

Conference

I 000

either

their

ensurt’

with

balance

fishworkers

fishworkers

traditional

organic rations or fishermen

from

from

small,

have decided to hold ~ also in Rome ~

on

Fisheries

to

0

decisions of this assembly.

alv)

its own World

fishing

of

excluded

workers: others were supporters. At about the same date the FAO had

the

system.

main actors of fisheries were

for

limit);

plementing

the article on ‘The

did not zone

to ban all technologies

munities,

and small-scalt~ fisherie

they

X)-mile

w’a-

accessi-

boats can easily reach this

X-mile

Letters to the editor Conference

regret

the

equipped,

fishing

l

International Fishworkers

grounds

which I pleaded, because propcr-

Hans BGhme lnstitut ftir Weltwirtschaft University of Kiel FR Germany

new.

driving

for small-

all near-shore

ble to it (I

is 50

the outcome

innovation.

advanced

Unless

of

recommendations.

‘Marine Policy, Vol 9, No 3, July 1985, pp 25G252.

urge governments:

FAO World Fisheries Conference - a reply With

rcfci-ence to Dr

Dada’s letter in

the July issue of Mtrrirw in Rome for the duration World and

Fisheries attended

Conference artisanal

of the FAO

conference

but have no voice in shaping

who were meeting

policies

at

fisher-

the way that larger soph-

was

consulted

about

done. firmed

This

Dr

FAO

fisheries

after

discussions

338

the

level’.

if it took steps to correct grievances.

by

Rightly

John Madeley Reading, UK

or

fishermen

The

‘Marine Polic);. Vol 9, No 3, July 1985, PP 252-253.

feel

fishing

were

needs

seem to

to

not be

be con-

Dada says that and

was drawn

the up

consultations

it4 member countries.

organizations

Conferences The

editors

listing

welcome

information

in the Calendar.

seminars

Short

on forthcoming

reports

of relevant

meetings

for

conferences

and

arc also of interest.

artisanal

they

strategy

‘between FAO, international

of what

would

when

their

livelihoods.

that

any artisanal

its strategy

strategy.

help the success of

that the FAO

boats threaten complaint

wrongly.

‘WL‘ are affected

would surely

the artisanal’s

policies,

not getting to

The

fish-

Kurien.

the

they now face,

fishermen

of the John

of

grips wjith the problems

gi-ounds. and their

conference,

those

was simply

isticated

secretary-general Rome,

alienated from the FAO FAO

said

men felt very strongly

particularly

The workers’ in

experts

of the fishermen.

the

at the \amc time. The artisanal Conference

and fisheries

of

also

fishermen

last yeai-,

fisheries.

’ No mention

both

sessions and

with

Polic:~.’ I was

Viewpoints/Reports Short

articles

encouraged.

analysing Reports

Correspondence Editor,

Marine

bury House.

current

issues affecting

of research initiatives

and conference Policy.

Bury

details

should

PO Box (13. Butterworth

Street,

Guildford

GU2

marine

policy arc

are also welcomed.

SBH.

be sent Scientific.

to The West-

UK.

concerned

MARINE

POLICY October

1985