Skip to main content

Glut of Ships Bad News for Supertanker Owners

Bloomberg News reports that owners of supertankers, losing money for a sixth consecutive quarter, will probably idle the most ships in more than two decades, as they contend with a glut that drove charter rates to the lowest in at least fourteen years. The combination of too many ships and slowing demand growth for oil means that about six percent of the fleet will be anchored in a year, according to Bloomberg's survey of eight brokers and analysts. However that may not be enough to end the slump. This is because it is reported that freight agreements, traded by brokers and used to bet on transportation costs, anticipate rates no higher than $13,819 a day through 2013.

While owners can cut operating costs to as little as $2,000 a day from $12,000 by anchoring ships, it also means no income. This was a statement made by Andreas Sohmen-Pao, CEO of the oil and gas shipping unit of BW Group, which is idling three ships of its own. The global fleet of VLCCs expanded about 9 percent to 570 ships in the past two years, the most since 1983, Clarkson data shows. Owners ordered the greatest number of new ships since the 1970s between 2006 and 2008, when charter rates surged to as much as $289,000. Demand for oil tankers will match fleet capacity by the Northern Hemisphere's next winter, lifting charter rates, stated Peter Evensen, the CEO of Teekay in an interview in London on October 6th.

If you are interested in contacting me,you may reach me at miamipandi@comcast.net or at Houck Anderson at motero@houckanderson.com.

Comments

Popular posts from this blog

Maritime Law--U.S. Crewmember Required to Arbitrate Claims Applying Norwegian Law

In Alberts v. Royal Caribbean Cruises, Ltd., No. 15-14775 (11th Cir. Aug. 23, 2016), the U.S. Court of Appeals for the Eleventh Circuit held that a U.S. citizen, working aboard a Royal Caribbean cruise ship is required to arbitrate his claims against Royal Caribbean.
Plaintiff, a United States citizen, worked as the lead trumpeter on a passenger Royal Caribbean cruise ship. The ship is a Bahamian flagged vessel with a home port in Fort Lauderdale, Florida. Royal Caribbean, the operator of the vessel, is a Liberian corporation with its principal place of business in Florida. After plaintiff became ill while working for Royal Caribbean, he filed suit alleging unseaworthiness, negligence, negligence under the Jones Act, maintenance and cure, and seaman’s wages and penalties. Royal Caribbean moved to compel arbitration, and the district court granted the motion. This appeal presented an issue of first impression: Whether a seaman’s work in international waters on a cruise ship that calls o…

Maritime Law--Tour Boat Captain Implicated in Tragedy Off Nicaragua

As reported in the Daily Business Review on January 25, 2016, Nicaragua's police, army and navy will investigate the captain of a tourist boat and his assistant for the deaths of 13 Costa Rican passengers killed on January 23rd when the vessel capsized in bad weather. The Reina del Caribe, Spanish for "Caribbean Queen," was carrying 33 people when it went down Saturday amid rain and strong winds as it ferried between the Corn Islands, a popular tourist destination, off Nicaragua's Caribbean coast. The Daily Business Review article can be accessed here=> Daily Business Review article.

The government clarified on the 24th that the boat was carrying 25 Costa Ricans, two Americans, two British citizens, a Brazilian and three Nicaraguans. Previous reports had said there were 32 people on board, including four Americans. All the dead were Costa Ricans.

Nicaragua's naval commander for the southern Caribbean region said the boat's captain was detained because the …

Maritime Law--Lawsuits Filed Over RCCL's "Storm Cruise"

Royal Caribbean Cruises Ltd ("RCCL") faces lawsuits by passengers accusing the company of negligently endangering their lives by letting Anthem of the Seas sail into a February 7, 2016 storm.  One class action lawsuit filed in federal court in Miami specifically states that RCCL should be required to pay punitive damages to passengers on its ship for "knowingly sailing directly into" a strong winter storm with 120-mph winds. It is also alleged that people aboard the ship were "subjected to hours of sheer terror as the gigantic cruise ship was battered by hurricane-force winds and more than 30-foot waves."

The vessel reportedly encountered 100 mph winds and 30-foot waves, and RCCL said the storm was more severe than expected. RCCL later turned the ship around, and it returned to New Jersey on February 10. Anthem of the Seas’ port azipod reportedly burnt through “all four clutches” during the storm. RCCL reported four minor injuries among more than 6,000 p…