Newsroom Blog
Queue here for rescue
By Lloyds List Comment
Monday 25 January 2010
LAST year China’s insatiable demand for dry bulk commodities rescued shipowners from doom. Can port congestion be their saviour in 2010?
As the first month draws to a close it might just be that over-ordering owners face yet another reprieve from the newbuilding tsunami, thanks largely to Australia’s inefficient coal and iron ore exporting ports.
January has been characterised by delays at congested ports, especially in Australia, but also in Brazil and China. That has kept ships employed for longer, a positive factor to help demand match supply.
Inject rising port congestion into the mix of already-volatile trading conditions and the possibility that the record number of new vessels leaving Asian shipyards will depress freight rates begins to diminish.
If anything, the epicentre of supply-and-demand mismatch must surely be located on Australia’s east coast. Regulators, governments and private port operators have known for years that underinvestment in terminal capacity and rail and logistics support has severely constrained exports.
Despite this, they have failed to properly address the logistics challenges and queues have worsened. In some places extra port capacity has failed to keep up with demand from Chinese and Asian buyers of bulk commodities. At others, like Dalrymple Bay Coal Terminal, only half of the port capacity is being used because of rail supply problems. As a result, delays there are around 25 days, while at Newcastle delays have reached 16, the highest in more than two years.
Some 170 bulk carriers — more than a third of ships stuck at congested ports around the world — are in Australia, including 58 at Newcastle.
Australia has lost billions of dollars in potential coal exports over the past five years because demand has overwhelmed inefficient infrastructure.
But Australia’s loss could be the shipowners’ gain. With estimates that seaborne dry bulk volumes will rise 9% this year to 3.7bn tonnes, ports will be busier than ever. Along with cancellation and newbuilding delivery delays, congestion is set to soak up looming tonnage oversupplies.
Owners could yet be saved from their folly.
Post your comment
Recent activity
- A pleasant suprise
- A force to reckon with
- Enough is enough
- Yuan debate
- Time for greater...
- IMO should be more open
- Case for restraint
- A code with added clout
- Trading blows
- US national divisions
- Ireland must pay its dues
- The benefit of...
- Chinese tax puzzle
- New York IPO revival?
- First class or economy?
- Prosecuting pirates
- Box lines under scrutiny
- Ideas in demand
- Worldscale enigma
- Endangered shipyards
- Time is money
- Boxed in by bailouts
- The need for caution
- Play fair on pay
- Fast or slow?
- China warms to Arctic...
- Working to rules
- CMA CGM's confession
