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AAL discourages newbuilding orders as oversupply continues

AAL discourages newbuilding orders as oversupply continues
AAL, a global breakbulk, project cargo and heavy lift shipping operator, has discouraged the building of new ships amid the shipping industry’s tonnage oversupply.

Kyriacos Panayides, managing director of AAL, observed that charter rates for multipurpose vessels have declined due mainly to tonnage oversupply and an influx of players from the bulker and container segments, which are experiencing a downturn.

“We are seeing a supply growth of about 1% for the multipurpose vessels,” Panayides told Seatrade Global, adding that the oversupply situation is not overly bad. “We discourage the building of more new ships. We are still facing the oversupply threat and we will find solutions from the secondhand market.”

AAL, which recently rebranded its global operations from Austral Asia Line, has completed its newbuilding programme. The company currently has a fleet of 14 owned multipurpose vessels, comprising of ten 31,000 dwt A-Class and four 19,000 dwt S-Class vessels, with a further five vessels on long term charter, of which three are 21,000 dwt T-Class and two are 25,800 dwt G-Class vessels.

The company does not have plans in the short to medium term to buy any more new ships. It recently added to its fleet the long term charter of G-Class multipurpose heavy lift vessel the AAL Galveston of 25,800 dwt in capacity.

“With the completion of our newbuilding plan, we have embarked on providing a global service with our global reach,” Panayides said. Singapore-headquartered AAL operates mainly in North Asia and it is also strengthening its foothold in Europe and North America. Last month, the company opened a new office in Tokyo, Japan.

Panayides said the company’s growth has been achieved on the back of managing its operational costs, maximising efficiencies within its fleet and expanding into new markets.

AAL’s customers span across different industries including oil and gas, mining, construction and renewables. “We see an increasing demand for more specialised and larger vessels, especially in transportation planning and heavier lifting capacity, which our fleet is able to offer,” he said.

“While the offshore oil and gas industry is ailing, the renewables sector in particular demand from offshore windfarm projects is rising, and this sector is requiring bigger and heavier lifting capacity vessels,” he added.