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BIMCO: Tanker Freight Rates Continue Dropping

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  • As China plans to Build Four More Vessels for Thun Tankers

Oil tankers experienced a tough start to 2017 as freight rates for all crude oil and oil product tankers continued their decline following the brief lift at year-end, according to international shipping association BIMCO.

Although average earnings stood at USD 18,853 per day by April 7, 2017, down from USD 63,284 per day reported on December 16, 2016, the very large crude carriers (VLCCs) may not yet have bottomed out.

Looking at the supply side, the 2016 low demolition trend seems to be changing. Namely, last year 2.6 million dwt was sold for demolition, while a total of 0.9 million had left the fleet for recycling at shipbreaking facilities by the end of March 2017.

Although slightly busier than 2016, this has been a slow start to what BIMCO expects will be “a busy year for tanker demolition.”

As cargo volumes are not expected to grow that much in 2017, the increase in demand must come from longer sailing distances, and changes to the volumes from one country to the next, BIMCO informs.

China rules the crude oil tanker market, as in many other shipping markets, having been solely responsible for the incremental crude oil tonne mile demand growth since 2010. The country is set to do it again in 2017.

However, BIMCO said that “the US could spoil the party.” As supply cuts from OPEC dropped from their highest supply level ever at 33.9 mb/d in October 2016, the US witnessed an increase of supply. This lifted US crude oil stocks to their highest level ever, while global stocks sidestepped.

“A continuance of that could prove difficult to uphold. 2016 was an abrupt break of trend that has seen US seaborne crude oil imports drop consistently since their peak in 2005,” BIMCO said.

The shipping association added that 2017 “is proving to be a year of change for oil tankers, as was indicated during 2016 with freight rates coming down. After two years of solid demand growth, 2017 is a year of tepid demand growth around 0–2%. As fleet expansion is also slowing down, though still at a higher growth rate than demand, the shipowners have their work cut out.”

In the meantime, Dutch coastal shipping company Thun Tankers, part of the Gothia Tanker Alliance, has contracted four 17,500 dwt IMO II product/chemical tankers to be built at China’s Avic Dingheng Shipbuilding.

The vessels are expected to be delivered between April 2019 and January 2020.

Furetank Rederi AB, Thun Tankers and Rederi AB Älvtank have previously ordered a total of six 16,300 dwt high quality intermediate tankers with LNG propulsion. These vessels, that are currently under construction, are being built at the same yard as the now contracted ships.

“Thun Tankers’ new vessels will further improve the Gothia Tanker Alliance customer offering as well as our position as a provider of safe and efficient refined products transportation,” Lars Höglund, Managing director at Furetank, said.

Furetank Chartering, responsible for the intermediate size segment in the Gothia Tanker Alliance, will commercially manage the vessels.

With this new contracting, the Erik Thun Group has a total of eleven newbuildings on order. In addition to five intermediate tankers, Thun has contracted four 8,000 dwt coastal tankers at Sheepswerf Ferus Smit in the Netherlands with delivery in 2018-2021.

Thun are also building two ice classed dry cargo ships at the same yard with delivery later this year.

World Maritime News

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TCIP: We Focus On Your Wellbeing, Trade Facilitation, Dera Nnadi Tells Stakeholders

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TCIP: We Focus On Your Wellbeing, Trade Facilitation, Dera Nnadi Tells Stakeholders

…Encourages free flow of questions to create opportunities for further enlightenment 

The Tin Can Island Ports Customs Command has assured of its commitment to efficient trade facilitation and the prioritisation of the well-being of stakeholders who do business within the Command’s jurisdiction.

The Customs Area Controller, Compt Dera A. Nnadi stated this, on Monday while having a business chat with stakeholders at the command.

The chat was largely on new modalities of what is expected of stakeholders who do business in the Command daily.

Emphasising his theme for the year 2024, which is “A Year For Stakeholders,” the CAC stated that the well-being of all who come to do business in the area command is a priority to him, the command and the service. 

Dera stressed that the year is at its last quarter, and appreciated all efforts so far put in to ensure that the revenue for the year is achieved and called for compliance as all hands must be on deck to make it happen.

The Area Controller said he understands the struggles stakeholders go through during the ember season, especially towards the end of the year, assuring that genuine declarations from compliant traders will not have issues of delay except for those who think they can circumvent the system; who should have themselves to blame as cutting of corners will not be negotiated.

He further stated that he had ensured that all new crested bonded terminals domiciled in TCIP have space available for stakeholders while they go about their businesses, but at the headquarters here, no such space has been created.

 He thereafter promised that he would look critically into it as renovations are ongoing on the premises. 

He advised the stakeholders to learn to keep the environment clean, pending when new bins will be distributed in designated areas, as a clean environment portrays a healthy lifestyle. 

The CAC gave room for questions, which he answered while promising that all issues raised would be looked into with the Public Relations Officers of the command, on time.

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Public Opinion: Nigeria @ 64: A Lament for Lost Opportunities, Collapse of Indigenous Shipping

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Public Opinion: Nigeria @ 64: A Lament for Lost Opportunities, Collapse of Indigenous Shipping

As Nigeria marks 64 years of independence, one of the most glaring failures of our post-colonial governance is the tragic collapse of our indigenous shipping industry. The Nigerian National Shipping Line (NNSL), bequeathed to us by the colonial administration as a robust national shipping carrier, once stood as a symbol of pride, sovereignty, and economic promise. Yet, within just two and a half decades after independence, the NNSL was thoroughly mismanaged and run aground, becoming a reflection of the broader dysfunction that has plagued our maritime sector.

At the time of independence in 1960, Nigeria inherited a fleet of ships that were not only operational but positioned to support our emerging economy. The NNSL was a testament to the vision of building a self-sufficient maritime power capable of transporting goods and commodities both in and out of our bustling seaports. But today, 64 years later, we find ourselves in a pitiful state, where no Nigerian shipping company owns even a single vessel among the over 5,000 ships that call our ports annually. These ships, owned by foreign interests, dominate our waters, enriching their nations while we sit idly by, exporting oil, gas, and agricultural produce, and importing manufactured goods without a stake in the process.

This collapse is not due to a lack of potential or resources, but rather a systematic and pervasive failure of leadership and vision. The Nigerian Maritime Administration and Safety Agency (NIMASA), created with the primary mandate of promoting indigenous shipping, has failed spectacularly in this regard. Established to regulate and nurture the growth of local shipping companies, NIMASA has instead become a bureaucratic entity more interested in revenue collection than in fostering the growth of indigenous maritime capacity. The sad reality is that despite NIMASA’s vast resources and regulatory power, Nigeria’s presence in the global shipping industry remains negligible.

Worse still, the Federal Government’s approach to the development of indigenous shipping has been nothing short of lackadaisical. Successive administrations have paid lip service to the need for a vibrant national shipping industry, but their actions have demonstrated a complete disregard for the sector’s strategic importance. The national shipping line was allowed to decay, with successive governments failing to invest in its revival or even establish policies that could encourage the growth of indigenous companies capable of competing in the international shipping arena.

The creation of the Ministry of Marine and Blue Economy by the present administration was seen by many as a step in the right direction. Yet, almost a year after its formation, there has been little to no improvement in the state of indigenous shipping. The ministry has yet to make any significant strides toward addressing the core issues plaguing the sector, including lack of infrastructure, access to capital, and policy support. The Nigerian government seems content to allow foreign-owned vessels to dominate our waters, extracting profit from our resources while we remain passive spectators.

The negative impact of this failure is far-reaching. Without a strong national shipping carrier, Nigeria is at the mercy of foreign shipping companies, paying exorbitant rates for the transportation of our goods. This erodes our trade balance, weakens our economic independence, and limits job creation in a sector that could employ tens of thousands of Nigerians. Moreover, the absence of a robust maritime industry stifles our ability to leverage the blue economy, a sector that could potentially contribute billions to our GDP if properly harnessed.

As we reflect on this tragic decline, the question must be asked: what is the way forward? First, the government must get serious about developing indigenous shipping. This requires more than the creation of ministries and agencies; it demands a focused, strategic plan that includes investment in shipbuilding infrastructure, access to credit for Nigerian ship owners, and policy frameworks that promote local participation in international trade. NIMASA must be refocused to fulfil its original mandate, not as a revenue-generating agency but as a true promoter of Nigerian shipping interests.

We must also recognize the strategic importance of having our national shipping carriers. It is inconceivable that a country with the economic potential of Nigeria remains without its fleet of vessels. Participation in the movement of international trade is not just about economic gain—it is about sovereignty, security, and our standing in the global maritime community.

The time for complacency is over. The Federal Government must act now to revive the dream of an indigenous shipping industry. Our future prosperity depends on it. The failure to do so will only deepen Nigeria’s reliance on foreign powers, continuing the cycle of dependency and lost opportunities that have plagued our maritime sector for far too long.Dr. Bolaji Akinola, a revered Maritime industry stakeholder, writes from Lagos 

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Book Launch: CGC Adeniyi Pledges Enhance Investment In Education, At ‘Business Geek’ Presentation

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Book Launch: CGC Adeniyi Pledges Enhance Investment In Education, At 'Business Geek' Presentation

… Affirms the critical role of education in nation’s development

The Comptroller-General of Customs (CGC), Adewale Adeniyi on Thursday emphasised the importance of quality education as a top priority of the Customs Service, stressing that management will continue to invest in it, as it plays a critical role in the nation’s development.

The CGC stated this in Abuja, on 26 September 2024, reaffirming the Service’s unwavering commitment to investment in education, particularly, into the Service’s schools nationwide, while presiding as Chairman, on the occasion of the official launch of the book ‘Business Geek: Innovative Incubator From Concept to Reality’.

The book was authored by the wife of one of the high-ranking officers of NCS, Asma’u Isah Maibasirah, and launched at the NAF Conference Centre, Abuja.

In his address, CGC Adeniyi affirmed the critical role of education in the nation’s development, hence the commitment to building and renovating the Service’s primary and secondary schools, in the various states.

He highlighted the importance of ensuring that every child, regardless of background, has access to an excellent educational experience; and assured that the Nigeria Customs Service will continue to deploy resources to address this issue.

Speaking on the book, the Comptroller-General pointed out that it offers valuable insights into entrepreneurship and innovation, which are critical for addressing the country’s unemployment challenges. 

 “There must be something in this book that we must pay serious attention to”, he said, adding: “It is a very timely intervention because we have a high unemployment rate, especially among the youth, and I believe this is the time we must all grab this book.

“The Business Geek book, authored by Asma’u, aims to foster a culture of creativity and business acumen among Nigerians, particularly the youth, by providing practical guidance on transforming innovative concepts into viable enterprises.”

He commended the author’s initiative and noted that the book aligns with President Bola Ahmed Tinubu’s agenda of empowering small-scale businesses to revitalise the economy.

CGC Adeniyi, however, pledged the support of the Nigeria Customs Service in collaborating with the author to ensure the book reaches a wider audience, adding, “We are committed to supporting the author in providing adequate printed copies whenever the need arises.”

In his review of the book, Professor Muhammad Aliyu Paiko, Vice-Chancellor of Abdulkadir Kure University, Minna, Niger State, described the publication as insightful and robust research material for intellectuals and students alike.

He lauded the author for her thorough research and compelling presentation of ideas relevant to academic and professional audiences.

Addressing the gathering, the author of the book, Dr Maibasirah, expressed her profound gratitude to Mrs Kikelomo Adewale Adeniyi, who represented the First Lady of the Federal Republic of Nigeria, Senator Oluremi Tinubu, for her unwavering support towards the success of the publication.

Dr Maibasirah acknowledged the critical role the First Lady played in providing encouragement and assistance that ensured the book’s successful launch.

She also appreciated the Comptroller-General and his team for their immense support, which she noted had a positive impact on the entire process of publishing and launching the book.

Additionally, she extended her sincere thanks to the former Governor of Zamfara State, Senator Abdulaziz Yari, who served as the Chief Launcher at the ceremony, and other distinguished guests for their presence and contributions to the event.

According to her, the Business Geek book contributes to the discourse on entrepreneurship and highlights efforts to promote small and medium-sized enterprises (SMEs) as a pathway to economic prosperity.

The event drew participants from various sectors and served as a platform for discussing strategies for enhancing entrepreneurial skills and leveraging innovative solutions for national development.

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