It is reported that shipowners probably canceled orders for 260 vessels carrying commodities and containers as the global recession choked demand and a credit crunch reduced funding.
Mr Roy Thomson a regional marine manager in Asia for Lloyds Register which certifies ships said shipyards received new orders for 255 million gross tonnage in capacity in the past three years, and about 7 million tonnes in confirmed contracts may have been canceled. Yards may have lost USD 20 billion in revenue from the cancellations, based on Bloomberg calculations. He said that we will see more cancellations. We have not gotten to the root of it yet."
Mr Thomson who has more than 25 years' experience in the shipping industry said about a third of the cancellations may have been for bulk carriers, which transport ore, grains and other commodities.
Mr Arjun Batra managing director for consulting at London based Drewry Shipping Consultants Ltd said "The shipping industry has been hit by both supply and demand problems. There's a surplus of carriers and demand has fallen in China and other markets."
Mr Russell Barling a spokesman for Lloyd's Register said Lloyds Register which certifies ships has about 18% of the global market share in the existing commercial fleet of about 8,400 vessels.
Mr Thomson said the biggest bulk carriers at the peak of the shipping boom in the first quarter of last year may have cost as much as USD 100 million each while large size tankers and container vessels cost as much as USD 135 million. He said that leading shipyards in South Korea and elsewhere may not have reduced prices as yet because their order books are full from previous contracts and scheduled deliveries this year may be unaffected. Shipowners have started renegotiating with yards to reduce prices of newbuilds, creating uncertainty in construction schedules next year.
According to data from London-based Drewry Shipping Consultants Ltd there are 3,424 commodity carriers presently on order at shipyards around the world. Those vessels will have a combined carrying capacity of about 294 million deadweight tonnes or 70% of the existing global fleet. Deadweight tonnes measure a ship's capacity to carry cargo fuel and water.
(Sourced from Bloomberg)
