Singapore: In the first of a series of reports spread out over this week from today’s Eco-Dollars Business Breakfast sponsored by Ideocean and Lloyd’s Register the spectre of obsolescence in the shipping industry is a very real threat.
Speaking at the event held at the Fullerton Hotel in Singapore, Shaj Thayil, VP, Technical Services & Ship Management at NOL said: “Certain segments have to scrap or change – that is inevitable, it is simple maths. Fuel prices have increased 153% since January 2009 and there is no indication of change. Older ships are no longer competitive and will have to move from the trading place.”
Manish Singh, Group Managing Director, Ideocean Holdings, pointed to a recent Lloyd’s Register industry survey that saw around 75% of respondents say VLCCs would be scrapped at 15 years or younger. “The supply situation will dictate matters,” he said, adding: “There will also be a faster rate of technological obsolescence.”
“The market will dictate a lot of these things because if there is a shortage of tonnage then the eco debate is less relevant where as if the overcapacity remains then ships will have to be scrapped,” said Iain Wilson, Regional Marine Manager for Lloyd's Register Asia.
This sentiment comes on the back of news out this week that scrapping worldwide has hit an all-time high this year. A total of 960 vessels of a cumulative 44.1m dwt have been sold for demolition in the first nine months of 2012, exceeding the record annual demolition volume of 42.6m dwt, set in 1985.
Scrapping in 2012 is forecast to reach 57m dwt, comparing with 42.4m dwt in the whole of 2011.
Eco-Dollars Business Breakfast was organized by Asia Shipping Media, the parent company of this website. [23/10/12]