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Thursday, December 14, 2017

INTERTANKO at Senior Shipping Forum held in Shanghai

National and international ship owner representatives and other shipping leaders gathered in Shanghai this week for the 2008 Senior Shipping Forum.

 

The focus of part of the meeting was the development of Shanghai as an International Shipping Centre, based around the development of the new deepwater port and the establishment of supporting infrastructure and logistics systems. Coupled with this, several international shipping companies and other maritime businesses have chosen to locate their regional headquarters or other offices in Shanghai. At the same time, other speakers noted the somewhat slower growth in other marine service sectors, such as information, financial, legal, and general consultancy, notwithstanding the local and central government support for same. The potential shortage in the availability of the necessary human capital was also highlighted, as was the internal issue of the aspirations of alternative centres in the mainland as well as in Hong Kong.

 

Other sessions covered economic development and issues facing the shipping industry. The slowdown in world economic growth and its impact were highlighted, for example, by the container port anticipating no growth in throughput in 2008, by the dramatic increase in the cost of bunker fuel and by other effects of the U.S. sub-prime crisis on Chinese and international maritime industries. Despite these concerns, most of the shipping companies present, along with and other industry representatives, indicated that they are maintaining their plans for continuing expansion.

 

INTERTANKO Managing Director Dr Peter Swift delivered one of the keynote speeches on Energy Transportation: Tanker Market Developments, including the principal challenges facing the Tanker Industry; (click here for a copy his PowerPoint presentation).

 

He said that over the past decade there has been an acceleration of the ever-increasing global demand for energy, with a net increase of over 25% since 2000. While oil provides approximately 40% of the world’s primary energy consumption, it nevertheless sets the benchmark for global energy prices. As oil is virtually irreplaceable as a transportation fuel, its price is highly sensitive to any disruption in supply. The largest oil reserves are located in relatively few areas of the world, and the world’s largest economies, such as the U.S., China, and Japan, are completely dependent on large volumes of overseas oil imports in tankers to fuel their trucks, tractors, cars, planes and ships. These factors make oil the most strategic commodity in the world, essential to the world’s economic growth and a significant factor in the economic health of both producing and importing countries.

 

He noted that in recent years the demand for oil in the developed world has stabilised, while continuing increases in the per capita demand, in particular in China and the Middle East as well as in much of the developing world, have fuelled increases in both oil imports and tonne mile demand for tankers. Since 2000, the incremental demand for oil has been mostly supplied by increased production in the Former Soviet Union and the Middle East, he said.

 

Swift went on to examine changes in tanker supply to meet the increasing and changing demand for oil imports. After a period with a differentiated market where the single hull fleet has been and is still being replaced by double hull tankers, the single hull ships have now become marginal and pushed out of the main oil import areas such as the U.S., Europe and key parts of Asia.

 

While tankers have traditionally had limited opportunities at the end of their trading life, over the last few years many tankers have been converted to offshore facilities and, to an increasing degree, to bulk carriers instead of being scrapped. High oil prices have also caused some tankers to reduce speed, and recently many tankers have also been used for floating storage. Thus, while there has been a steady delivery of newbuildings in recent years, and while there remains a large orderbook – in part as an offset to the legislative phase-out of single hull tankers – tanker supply and in turn market forecasts are complex subjects.

 

His talk additionally summarised some of the key challenges facing the tanker industry. These include the drive to maintain global governance for a global industry, seeking to maintain consistency in international regulations and standards; the key environmental issues ranging from climate change to biofouling, waste management and recycling; and the quantity and quality challenges associated with the future manning of ships.

 

Contact: Peter Swift