Deliveries of new ships will fall to 79m dwt this year, he said, down by 25% compared with 2017, and less than half of the 2011 peak of more than 167m dwt. In 2019, deliveries will fall further to less than 73m dwt, Stopford predicted.
Against a backdrop of tightening regulations, he said that shipowners are “sitting on their hands” because they are not certain of the best business strategy to adopt. He did not go so far as to blame the IMO directly, but he contrasted new regulations including the ballast water convention and the 2020 sulphur cap with the move to phase out single-skin tankers in the 1990s.
At that time, Stopford said, design experts sat on technical committees to provide guidance on how to manage the transition. Recently, he said, the IMO has introduced new regulations but has failed to provide the same sort of guidance on how to meet the new regulations. How can a bulk carrier shipowner get to grips with choosing the best ballast water treatment system, Stopford asked rhetorically.
Shipping investor sentiment remains “shaky”. Contracts for new ships placed in 2016 and 2017 were the lowest of the decade by a very large margin, Stopford said. Despite this, new ship prices have edged up slightly this year, with a new VLCC now likely to cost $87m compared with $81m in January, and a Capesize bulker up 6% to $47.5m. Stopford noted two areas of “outstanding investment growth” – cruise and LNG. Cruise ship orders jumped from $9.1bn in 2015 to $19.5bn in 2017 when 31 new ships were ordered.
He pointed out global shipping’s astonishing contribution to life as we know it. This year, he said, ships would move about 12bn tonnes of cargo, equivalent to 1.8 tonnes for every person on the planet. However, although shipping market fundamentals are slightly better in 2018, surplus capacity remains and owners are cautious, with their eyes on regulatory issues and how best to capitalise on the recovery which lies ahead, though “we still do not know when”.
This year’s SMM event will reflect the industry’s improving sentiment with a record number of exhibitors from more than 120 countries. Focus areas this year will include trends in digitalisation and smart shipping, green technologies, cyber security, 3D printing and deep sea mining.