Despite the recent flurry of construction orders coming
primarily in the containership and gas carrier segments, BIMCO in its new
analysis of global shipbuilding in forecasting a slowing growth rate for the
world’s fleet in the next five years compared to the last five years.
The shipping trade association points to the fact that
despite new orders for containerships currently at a 14-year-high, global
shipyards are under pressure. Based on the current pace of the market, BIMCO
says that 2021 is heading towards being the third-lowest level of newbuilding
orders in 12 years.
The trading world merchant fleet had a capacity of 74,505
ships across 11 main segments, according to BIMCO. In their baseline scenario,
the total fleet is projected to reach 79,282 by the end of 2025. That would
represent 6.4 percent growth over the five years, down from 7.4 percent in the
previous five years. From 2021 onwards, BIMCO projects the fleet to have a
compound annual growth rate (CAGR) of 1.25 percent in a baseline scenario until
the start of 2026. The CAGR for the previous five years is 1.44 percent. In
addition to the baseline, a low and a high scenario is provided to consider the
impact from various degrees of uncertainty for the future number of ships in
the market
The world merchant fleet is expected to grow in all three
scenarios over the upcoming years. In a scenario where a
weaker-than-the-baseline outlook for global trade is considered, the fleet will
grow at a slower pace and is expected to have a compound annual growth rate
(CAGR) of 0.75 percent. In the low growth scenario, there will be on average
567 ships entering the fleet every year, a significant decline from the
baseline average of 955. With a brighter outlook for global trade, the world
fleet is set to exceed 80,000 ships during 2025, with a set annual growth rate
of 1.75 percent.
The most substantial growth rate by any of the considered 11
segments during 2020 through 2025 according to BIMCO will likely be the LNG
tankers. This equated to the coming global shift away from crude oil and the
rapidly increasing use of LNG, including in the shipping industry. DNV, for
example, recently reported that there are 200 ocean going LNG-powered vessels
operating with 300 additional ships capable of operating on LNG currently on
order.
According to BIMCO, the LNG tanker fleet currently consists
of 593 ships, and 85 percent of the fleet has a cargo carrying capacity in the
range of 100,000-200,000 cubic meters. In BIMCO’s baseline scenario the LNG
tanker fleet would reach 819 vessels at the end of 2025. The range is between
799 ships in a low growth scenario to 839 ships in a high growth scenario.
While the market for crude tankers was negatively affected
during the pandemic, BIMCO notes that the fleet has seen more than 40 new
orders during the year to date. The crude tanker fleet consists of 2,976 ships,
according to the IHS Markit data, and 34 percent of that fleet consists of
ships in the range of 80,000-120,000 dwt. BIMCO expects the fleet to expand in
the longer term by just under three percent on average each year until the end
of 2025, with VLCC driving most of the growth.
Cruise liners are also expected to see significant fleet
growth by 2026. Despite being the second-smallest segment of the world merchant
fleet by numbers, with an end-year 2020 total of 621 ships, the cruise lines
are expected to increase with a compound annual growth rate of over four
percent in BIMCO’s baseline scenario. Regardless of a low or high growth
scenario, the fleet will deviate with 19 ships from the baseline of 763 ships
in 2026.
Containerships are currently the fastest growing segment. So
far this year, BIMCO reports 229 ships totaling 2.2m TEU have been added to the
order book. This compares with deliveries of 393,566 TEU, leaving a combined
orderbook of 4.35 million TEU, more than twice the size it was eight months ago
when containership orders bottomed out at 1.95 million TEU. Surging profits and
high demand have driven the strong demand for new containership orders.
However, it is unlikely that the segment can maintain this growth rate.
BIMCO also points out that the growth in shipping will also
directly impact seafarers and the profession. They noted that seafarers have
also been under pressure during the pandemic. The expected demand for seafarers
in the future is impacted by the forecasted growth in the world fleet.