Shiping Trend by Oladokun Sulaiman

8/14/2019 Shiping Trend by Oladokun Sulaiman

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z

Paper

On

Built fleet statistics, trend in fleet development,

demands for world fleets and the future of the fleet

and shipbuilding industry

MMK 2513

By: Oladokun Sulaiman

Supervised by: Dr. Omar

Faculty of mechanical engineering

Marine technology department

Universiti Teknologi Malaysia

Skudai, Johor, Malaysia

January 2006


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Abstract

Human civilization in building things always taken similar path across all aspect of life,industries of yesterday have seen concentration in vertical way of building industries,

today is all horizontal building methods some that include merging and strongcollaboration. The large-scale nature of shipbuilding has created a pathway for

associative manufacturing. Ships as well as other industrial maritime structures andrelated components are an important industry that requires the best and latest

scientific/engineering resources in a multitude of different disciplines.These reports will collect, discuss and analyses of various and historical and statistical

datas of shipbuilding for the last decade and deduce trend in shipbuilding, demand andfuture direction the industry.

The report will touch the serious difficulties the shipbuilding sector is facing and

providing information on trend in commercial practices.

The paper will also discuss:

The longer term supply and demand analysis for merchant ships; General remarks on the nature of shipbuilding contracts and on the underlying

Study work; The analysis of the financial sector in South Korea;

Details of certain investigated shipyards; The description of the applied methodology;

Introduction

Shipping is not a primary industry in the sense of agriculture or mining, nor a secondary

industry in the sense of steel or chemical production. It is a tertiary or service industry

that responds to the needs of the shipping public. As such of that, shipping represents the

investment of billions of dollars individual, corporate, commercial and government itself.


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From that, the major function of the shipping industry is to close the physical gap

between trading nations by allowing the exchange of extra commodities. This activity is

performed worldwide and links all parts of the globe in a network of routes, some of

which are highly developed and heavily trafficked. Others used occasionally at certain

times of the years. So, water borne transport is the cheapest means of moving large

quantities of any commodity over long distance although it is in the main far slower than

other forms of transport.

Owners do more than respond to the signals of the market. They continually assess the

future needs of shippers and charterers investing their resources in terms of manpower

and capital, in new ship design, technological improvement and additional ship capacity,

realizing profits if they a re right and losses if they are wrong.

Lowering the cost of transportation since World War II has encouraged the specialization

of industrial output by shifts in the comparative price advantage of domestic and foreign

produced goods and has opened remote sources of raw material. World economies have

never been as integrated as they are now. Trade is the most powerful binding force in a

world filled with incompatible political systems.


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Trends in shipbuilding

According to Lloyds Register, the world orderbook for new ships, as measured in gross

tons, decreased after June 1998. On June 30, 1999, the world orderbook for merchantvessels 100 gross tons (gt) and over consisted of 2,479 vessels totaling 53.8 million gt.

This represents a 7 percent decrease from the 2,668 Vessels on order at the end of June1998 and a 3 percent decrease in gross tonnage from 55.6 million gt in June 1998. The

average size of merchant ships on order increased 4 percent from 20,829 gt at the end ofJune 1998 to 21,718 gt at the end of June 1999. South Korea jumped ahead of Japan to

regain the dominant position in the world merchant shipbuilding market. South Koreaaccounted for 35 percent of the gross tonnage of merchant ships on order, followed by

Japan with 32 percent and the Peoples Republic of China with 5 percent of theinternational commercial shipbuilding orderbook (see Figure 22-1). At the end of June

1999, the United States ranked twelfth among shipbuilding

The world shipbuilding market continues to face serious difficulties, due to an imbalanceof supply and demand. Past expansion of shipyards, mainly in Korea, but nowincreasingly also in China 3, has led to price depression. Year 2000 have been a recovery

point due to high level of ordering and increase in price while year 2001 has led to a newreduction in prices.The year 2001 has been very problematic for the maritime industries

world-wide: The Recession in the US and the terrorist attacks of 11 September hasdecreased the demand for sea trade and cruises, respectively. The decline in ordering


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affected the sectors of Containerships and cruiseships most, leading to a drop in overallmarket share for Korea and the EU, which are particularly strong in these segments.

The segment Liquified Natural Gas carriers (LNG) saw an increase in absolute order

volume, however, this is still a niche market. Korean yards took most of the orders for

LNG carriers. They hold 65 % of the relevant world orderbook, and 79 % of the neworders placed in 2001 went to Korean yards, despite the fact that Korea is a relativenewcomer in the field and the building yards do not hold patents on the key technologies.

Market analysis suggests that Korean yards made inroads in this area due to very lowoffer prices. Their ability to supply a large number of vessels at an early delivery date

may have been important in getting a large amount of orders also.

company in the field and their data is also used by international organizations such as theOECD.

Challenges in technological developments in the shipping and shipbuilding industriesover the last few years are summarized here by adding the latest information to what was

reported.

1. Energy Saving Technology for Ships


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In 1981, successful attempts to develop ships mainly very large ore/ coal carrier,

which would consume 40 to 60 percent less fuel than conventional ships of

comparable size were announced in quick succession and construction of such

ships was started. At the same time, these techniques serve as stepping stones for

further technological development in this direction.

2. Study on Technological Strategy

Expert from universities, the Ministry of Transport and the shipping , shipbuilding

and ship machinery industries gathered and discussed a technological strategy for

the coming years, based on the environment of the shipbuilding industry and the

expected future image of the nation. The conclusion s they reached were:

Social requirements and constraints to be taken into consideration are

boiled down to building up a socioeconomic system harmonized with the

environment, realization of secure and hazard-free life of high quality,

realization of an advanced IT-oriented society and assurance of steady

supply of energy, resource and food.

Focus on energy conservation and human labor saving, themes

corresponding to the above-cited general objective include conservation ofthe global and marine environment, pursuit of greater safety and

reliability, application of advanced information technology and

enhancement of productivity and reliability and sophistication of

shipbuilding technology and creation of new demand to be met by

shipbuilders.

3. Conservation of the Global and Marine Environment

Among the themes concerning the conservation of the global environment taken

up by the United Nation Environmental Program (UNEP), those having direct

relevance to the shipping and shipbuilding industries are the prevention of the


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marine pollution, the prevention of air pollution and the prevention of global

warming.

4. Ship Safety and Reliability

From the second half of the 1980s, bulk carriers were wrecked consecutively,

tolling many human lives and large amounts of resources. Safety problems of

bulkers have been discussed mainly at the IMO and the International Association

of Classification Societies (ICAS) and legislation for greater safety is in the

process of development. Therefore, they create some solution for them to follow

it, the solution covered;

Enhanced Hull Inspection and Maintenance

Fatigue and Corrosion of Hulls

Monitoring of Hull Strength

Modernization of Ship and Establishment of Management Systems

5. Application of Advanced Information Technology and Enhancement of

Productivity and Reliability

A computer integrated manufacturing system (CIMS) for shipbuilding has been

studied as a joint project of the academic community and private industry since

year 1987. Realization of the system is an urgent necessity in order to transform

the traditional labor intensive shipbuilding sector into a modern industry and

eventually solve the immediate problem of labor shortage, especially of skilled

worker. Because the reduced physical capacity of shipyards and the double hull

requirement for tanker will inevitably reduce the numbers of vessels that can be

built annually further improvement in productivity are required. From this CIMS,

it introduces;

Design stage


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Production planning and production management

Mechanization and automation

6. Advancement of Shipbuilding Technology and Creation of New Demand

Studies are under way focusing on the development of ultra-high speed cargo

ships, and on infrastructure improvements including faster and more efficient

cargo handling to match the speed of fast marine transport, all with an eye to a

modal shift in the key aspect of logistic.

The volume of cargo traffic increase annually and basic physical distribution

requirements for ever faster, cheaper and safer transport remain. Overland

transport in particular, is beset by problems of congestion, labor shortage an air

pollution from exhaust gas, giving rise to demands by society for a modal shift to

marine transport.

Research efforts are also made for practical application of gigantic floating

structures intended for greater utilization of oceanic space. It is hoped that

shipbuilding technology be further advanced so as to create new demand to bemet by shipbuilders.

Summary of market share all ships type

According ships datas collected from clackson research report, Japan, china (includingHong Kong ) , the republic of Korea , Denmark and Sweden are outstanding among the

nations with maritime services for cross trades.


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Other major trading nations are major importers or users of shipping services whilemaintaining a relevant ownership position and to lesser extent a national flags for

example the united stares come into this group. According to UNCTAD report the UnitedStates account for 13% of world trade while owned 5.9 % of world tonnage with only

about 1/4th of such tonnage flying the national flag. Similarly France account for .5% of

world trade and .0 % of tonnage ownership with flag having a share of of thispercentage.

Korean yards continue to price ships below cost while others are trying to improve theirbottom line. Most major Korean yards managed to show a profit for 2001, due to high

sales volume at expense of price.

The source mostly referred to in this report is H. Clarkson Ltd. 11 and its varioussubsidiaries (in particular Clarkson Research). While Clarkson is a well-recognized


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Demands for shipbuilding

Research and development Forecast under analysis of cargo volume and correlation with

fleet ownership generated has allows have also been a useful tool for various decision

making process to meet market and demands call in maritime industry a swell asincreased productivity and cost reduction in the construction of ships. So far, because of

the complexity of the maritime industry- maritime structures and maritime transportservices are largely interrelated, therefore, demands to meet productivities, efficiency of


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the construction of ships, Technology and Improvement of competitiveness depends onthe following components

Organization

Human factor

In particular, in order to achieve substantial cost reduction, productivity gains, production process simulation under technological and organizational, this along side with other

factors of labor and incorporation of new ICT tools for interconnectivity betweendifferent systems will be taking into account and incorporated as necessarily.

In addition to this the following factors has also influence the market of sea transport:

World Economy: the world economy with its output and trade is the mostimportant single factor to generate demand for shipping and any crisis in the

world economy reflects in the demand for shipping. Ups and downs of shipping

demand are also proportionate to world trade. The world economy that may bringabout change in the demand for sea transport through:

The Business Cycle: The business cycle lays the foundation for freight cycles.Fluctuation in the rate of economic growth work through in to the sea borne trade,creating a cycle pattern of demand for ships. For example, two major recessions

in shipping business in 1975 and 1981-1983, which co-incited with the recessionof the world economy. These economic cycles arise from a combination of

external and internal factors. The external factors include events such as wars orsudden changes in commodity prices such as crude oil, which cause a sudden

change in demand. Internal factors refer to the dynamic structure of the world

economy itself, which it is argued, leads naturally to a cyclical rather than lineargrowth path. Five of the most common business cycles are-

Concurrently, this make the designing and building of highly complex maritime systems, be it ships, floating factories or fixed structures, requires the best possible

multidisciplinary approach that focus on

Simplicity (in lay-out and operation)

Robustness and reliability Ease of maintenance

Low manning requirements

Inline with contemporary issue of sustainable safe and environmentally friendly shipoperation, using

Design Tools.

Design Methods Production Processes

Production Technologies


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Commodities that have share of commodity for sea trade are raw material of agriculturalindustry, Metal Industry, Forest Product, Other Industrial Material, Other Manufactures.

The most important technical development was the unitization of the liner shipping

business. The shipping industry has been so successful at exploiting this technical

development that the cost of sea transport has hardly increased- Coal and Oil cost littlemore to transport.

It is generally considered that maritime capabilities, specifically of the ownership ofsubstantial tonnage are essential for a county trade support and promotion. This report

will highlight datas of major trading countries, the relationships and impact betweencargo and tonnage and the flag of registry in the mid 1990s than in 1940s.

Market trend

According to UNCTAD maritime review Japan, Koreas china has made more than

dramatic change that revolutionarys shipbuilding. It has observed that shipping buildingand its associated industry is quite conservative, and they are more subjects to

government influence and policies. This influence has provided fluctuation trends in theindustry and of course the demand and supply for cargo are determinant for demand for

new ships.

A summary of the balance of tonnage supply and demand for selected years appears in

table - The total surplus tonnage in 2004 was about half that of the previous

year 6.2 million dwt. This was largely attributable to the high level of vessel scrappingover the last few years and to increased employment of ships.

Supply

Tonnage supply in the oil tanker sector increased in 2004 by 12.3 million dwt to 298.3million dwt as newbuildings delivered outweighed tonnage scrapped, laid up or lost (see

table and. figure). This, combined within increased shipments and extended haulage,


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brought down overcapacity to 3.4 million dwt or 1.1 per cent of the total world tanker.eet. In 2004, the total dry bulk. Fleet supply increased by 27.6 million dwt to 325.1

million dwt. Over tonnage for this type of vessel reached 2.1 million dwt, equivalent to0.6 per cent of the dry bulk .fleet. For the conventional general cargo. Fleet, overcapacity

stood at the same level as in the previous year, with supply exceeding demand by only

0.7 million dwt or 1.6 per cent of the world .fleet of this sector. The surplus tonnage ofgeneral cargo vessels has been under 1 million dwt for the last four years.


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Policy change

Recent years have seen many countries coming up with revitalizing and their shipping

building industry, in Nigeria cabotages law and ship financing scheme is recentlyestablished to encourage shipbuilding and ship acquisition. The US also introduced the

National Shipbuilding and Conversion Act of 1993 and the expanded Title XI FederalShip Financing Guarantee Program. .the same is introduced in other part


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Demand

The correlation between cargo volume generated by different country groups and theirfleet ownership is summarized in table 29. Developed market-economy countries


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generated 48.9 per cent of world seaborne trade in 2004, compared with 53.7 per cent in1980. Over the same period, the tonnage share of the fleet of developed market-economy

countries fell, from about 51 per cent in 1980 to about 27 per cent in 2004.However, in addition to tonnage under national flags, there is also the tonnage of vessels

owned by nationals of particular countries but registered under foreign flags, and the two

together bring the share of developed market-economy countries to 65 per cent. The shareof developing countries in world cargo turnover has remained at about 40 per cent.

Their tonnage owned and registered under national flags increased from 10 per cent ofthe world fleet in 1980 to 22.6 per cent at the beginning of 2005, Tonnage beneficially

owned by developing countries has expanded to nearly one third of the total beneficiallyregistered tonnage, bringing the total tonnage owned by developing countries to about 36

per cent of the world .fleet. The share of world cargo turnover generated by the countriesof Central and Eastern Europe remained at about 3 per cent in 2004, unchanged from the

levels of previous years but significantly less than the 4.7 per cent level of 1980.

These countries fleet position also declined from 5.5 per cent to less than 2 per cent in2004. The socialist countries in Asia increased their share in world trade to 8.1 per cent in

2004, while they improved their share in world tonnage from 1.6 per cent in 1980 to 3.7percent in 2004. In addition, these countries have a small share of their fleet registered in

the open registries.

Information on the fleet ownership of the major trading nations appears in table 30. Themajor trading nations are also major owners of tonnage, which reflects the fact that in

trade-supporting policies maritime transport can be exploited as a complement to trade.Maritime capabilities, specifically ownership of substantial tonnage, are generally

considered essential for a countrys trade support and promotion. The table alsohighlights the similarities and differences among the shipping services of the leading

trading nations. Major trading countries such as Japan, China (including Hong Kong), theRepublic of Korea, Denmark and Sweden are outstanding among the nations with

maritime services for cross trades. Other major trading


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The information provided by Clarkson Research confirms the general downward

trend in ship prices. This applies to all standard ship types and reflects the generallynegative sentiment in the market, despite rising costs stemming from inflation, wage

increases and higher prices for raw materials priced in USD in all major shipbuilding

regions.

Source - clackson research


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In accordance with market developments, Chinese shipbuilders have expressed their

intention to aim for a large scale expansion of facilities, quoting South Korea as anexample to follow. This is likely to lead to further price decline, unless China herself

creates significant additional demand for ships. China being in WTO will equally creat

effect in the market.

The index clearly shows the massive drop in prices following the Asian crisis of1997/98 and the subsequent efforts to increase prices along the ordering boom in

2000. The (not very pronounced) trend towards better prices stopped in late 2000 andfor the year 2001 the trend was reversed as had to be expected with the number of

incoming orders falling. It is noteworthy that 2001 price levels did not keep pace e.g.with inflation.

With very limited ordering expected for 2002, price recovery will be difficult toAchieve, although yards may be inclined to look for orders in those segments that

have been less affected by price erosion. Past experience has, however, shown thatthis behaviour does not improve the financial results of yards, but rather leads to

additional price erosion in the targeted sectors, as long as the market is characterized

by over-supply.


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New building

Yards, such as Hyundai (HHI), Hanjin (HHIC) and Samsung (SHI), did not benefitedfrom large scale debt restructuring and which operate comparatively old facilities show

(slightly) higher production costs under the debt-based methodology, while yards, such as

Daewoo (DSME) and Daedong, did benefited from debt reductions and moratoria butoperate comparatively new facilities show (slightly) higher production costs when basing the investigations on the depreciation approach. The two approaches give very

similar results for the other two major Korean yards, Hyundai Mipo and Samho. Ofcourse, results are also influenced by the financing terms of the individual projects

investigated.


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New ship buildersSource- European union

Prediction for future shipbuilding

If we go through the trend of the shipping and shipbuilding above, we can create and

project a new development in next few years construction. Here, what I am thinking that

influence to the shipping and shipbuilding industries.

1. Justification for Combined Carriers

In order to discuss the need flexible ships on certain of the worlds trade routes,

the following section looks at the justification put forward by the shipping

industry for the design and operation of combined ore, bulk, oil carrier or ore, oil

carrier. These ships are designed to carry either oil or dry bulk on separate

voyages at different times and are potentially more productive than pure tanker or

bulk carrier.

In making the decision to invest in combined carrier tonnage as opposed to a pure

oil carrier or dry bulk carrier, the ship-owner is presented with two possible

operating scenarios. He can either combine voyages over a period by carrying dry

bulk and oil in a sequence that keeps ballast to minimum or he can switch his ship

between the dry bulk and the oil market sector. The independent ship-owner seeks


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to minimize his earnings by operating ships; therefore he must adapt management

performance to combine flexibility with greater earning power.

2. Combined Voyages

The operation of combined voyages seeks to mix short ballast passages with

longer loaded ones. It takes a different management style and effort to negotiate a

series of contracts that will keep the ship employed to that normally found in bulk

shipping company. The use a contract where the ship is not named in the

document, but a promise is given to deliver the fixed amounts of cargo in given

time periods makes it possible to plan the schedules of a fleet of this type of ships.

The problem may be encountered where the cargo owner may offer a lower

freight rate than that currently found in the spot market in exchanged for this type

of commitment.

3. Spot Market Operation

The basic assumption underlying this philosophy is that the shipping market

follows a pattern, which enables the time, when it is advantageous to transfer the

combined carrier from oil trading to dry bulk trading to be calculated. This means

that when tanker rates are high, the ship is traded in the oil market as a tanker, but

when this rate falls there comes a time when the dry bulk rate will be higher it is

the profitable to transfer to dry bulk trading.

4. Event Affecting Combined Carrier Utilization

5. Energy

Almost all commercial merchant ships are powered by oil fed plant. However, the

oil crisis of the last few years has highlighted the need to research the likely


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power plant of the future. Amongst the many options, three alternatives to oil

seem to have gained the most attention.

Steam power

Wind power

Nuclear power

New project investigations

Since the last shipbuilding report six more orders (all placed in South Korea) wereinvestigated in detail, in order to establish the actual building costs. The investigated

orders are:

VLCC, 48 120 cgt, to be built at Samho Heavy Industries; LNG carrier (series of 5), 71 850 cgt, to be built at Daewoo Shipbuilding andMarine Engineering Co. Ltd. (DSME);

LNG carrier, 69 675 cgt, to be built at Samsung Heavy Industries (SHI); LNG carrier (series of 2), 88 500 cgt, to be built at Hyundai Heavy Industries

(HHI); Suezmax crude oil tanker (series of 4), 30 800 cgt, to be built at Samho Heavy

Industries; 5 762 TEU containership (series of 2), 42 835 cgt, to be built at Samsung

Heavy Industries (SHI);

DSME has become the leading builder of LNG carriers in the world, with sixteen shipson order, giving the yard an economy of scale unseen before. However, the detailed

analysis undertaken revealed that for the construction of LNG carriers there are limits tothe improvement in efficiency as some yard equipment needs to be duplicated, leading to

high up-front investment costs. Furthermore, DSME managed to start as a new companyin late 2000, shedding most of the debts of its predecessor.


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Therefore DSME can operate a very large state-of-the-art shipyard without the massiveinitial investment costs being reflected in their product prices. Nevertheless DSME still

stands at a debt to equity ratio of 279 % (estimated for 2001), and although it is currentlycash rich due to high order intake in 2001, this is likely to be dissipated when those

orders need to go into production and the actual building costs begin to be incurred. SHI

remains burdened with a comparatively high level of debt (the debt to equity ratio for2001 is estimated to be still more than 200 %) and this fact is reflected in their cost base.SHI also suffers from a lower productivity than its Korean competitors, leading to higher

wage costs. In addition SHI did not manage to attract multiple orders as Daewoo andHyundai did and this has to show in the unit costs.

After being able to dispose of some non-performing assets stemming from HHIs

previous engagement with other Hyundai subsidiaries, HHI seems now to be headingtowards profitability. HHIs debt to equity ratio is assumed to reach 183 % in 2001, but

as with all Korean yards, an assessment of the yards financial situation is difficult tomake. Very few meaningful financial figures are given and published accounts are not

very recent and have little or no annotations.

Conclusion

The world shipbuilding market is characterized by a strong imbalance of supply and

demand, that over-expansion of shipbuilding capacity in Korea has led to very low offerprices in most market segments and that the resulting losses for Korean yards, in some

cases, have been compensated through financial restructuring which.

The world merchant fleet expanded to 895.8 million deadweight tons (dwt) at thebeginning of 2005, a 4.5 per cent increase. Newbuilding deliveries increased marginally

to 49.4 million dwt, and tonnage broken up and lost was more than halved to 10.6 milliondwt, leaving a net gain of 38.8 million dwt.

The fleets of oil tankers and dry bulk carriers, which together make up 73.3 per cent of

the total world fleet, increased by 6.1 per cent and 4.2 per cent respectively. There was a8.4 per cent increase from 90.5 to 98.1 million dwt in the container ship fleet and a

7.6 per cent increase from 20.9 to 22.5 million dwt in the liqufied gas carriers fleet.

The average age of the world fleet dropped marginally to 12.3 years, with almost 27.3 percent of the fleet 20 or more years old. General cargo vessels had the highest average age

(17.5 years) and container vessels the lowest (9.4 years).

Registration of ships by developed market economy countries and major open-registry

countries accounted for 27 and 45.1 per cent of the world leet respectively. Openregistries increased their tonnage marginally; two thirds of this beneficially owned. Fleet


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is owned by market-economy and developing countries. Developing countries sharereached 22.6 per cent or 202.3 million dwt, of which 155.9 million dwt is registered in

Asia.

References:

I. S.R.Tolofari (1989), Open Registry Shipping, AComparative Study of Costs and

Freight Rates, Gordon and Breach Science Publishers, Amsterdam

II. Roy L. Nersesian (1981), Ships and Shipping, A comprehensive Guide, Penwell

Books, Oklahoma

III. www.ship4ever.com

IV. www.nautikal4ever.com

V. http://www.clarksons.net/.

VI. http://www.fearnleys.com/.

VII. UNCTAD Review of Maritime Transportation, 2004, Pg 19-53


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Appendix

Index reference


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Arrangement of work

The merchant fleet statistics are based on Lloyds Register-Fairplay data supplied to DfT

every quarter.

VesselsThe statistics include all known sea-going ships (and a few non-seagoing vessels) of 100

gross tons (gt) and above. United States reserve fleet (except for mid-year 1998) andGreat Lakes fleet are included but most naval vessels are excluded.

Registry

Ships are registered at ports, and registry (or flag) refers to the country of the port atwhich a ship is registered. The breakdown of flags and flag groups by country is as

follows:United Kingdom - Great Britain and Northern Ireland.

Crown Dependencies - Isle of Man and the Channel Islands.

Dependent Territories - Anguilla, Bermuda, British Virgin Islands,

Cayman Islands, Falkland Islands, Gibraltar, Hong Kong (until 1 July1997), Montserrat, St Helena, Turks and Caicos Islands.

European Community at 30 April 2004 - United Kingdom (includingIsle of Man and the Channel Islands), Austria, Belgium, Denmark

(including DIS, Faeroes and Greenland), Finland, France (includingFrench Antarctic Territory, French Guiana, French Polynesia,

Guadeloupe, Martinique, Mayotte, New Caledonia, Reunion, St Pierre& Miquelon and Wallis and Futuna Islands), Germany, Greece, Irish

Republic, Italy, Luxembourg, Netherlands (including NetherlandsAntilles and Aruba), Portugal (including Madeira, MAR, Azores and

Macao), Spain (including Canary Islands and CSR) and Sweden.

Countries acceded to EU on 1 May 2004 - Cyprus, Czech Republic,Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovak Republic

and SloveniaCanada - Canada (including Great Lakes fleet)

Norway - Norway (including NIS)

USA - USA (including Great Lakes fleet, American Samoa, VirginIslands of the USA, Northern Mariana Islands, Guam, Puerto Rico and

USA reserve fleet (except for mid-year 1998).

UK ownership

UK owned (or directly owned) ships, wherever registered, are those for which thenationality of the owner is United Kingdom (not including the Crown Dependencies).

Where a company owns a vessel, its nationality is deemed to be that of the country inwhich the company is incorporated.


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UK parent owned ships are those for which the nationality of the company having thecontrolling interest in the direct owner is United Kingdom.

Units of measurement

Under the International Convention on the Tonnage Measurement of Ships, 1969, gross

tonnage (GT) is defined as the following function of the total volume of all enclosedspaces in the ship (V), in cubic metres:GT = K1V

Where K1 = 0.2 + 0.02log10V.

Although the Convention is fully in force, the old "gross registered tons" measure is stillthe measure recorded on Lloyds Register-Fairplay World Fleet Database for a

substantial proportion of world tonnage. This was directly related to the capacity of thespace within the hull, and of the enclosed spaces above the deck, which were available

for cargo, stores, passengers and crew, with certain exceptions. In practice, old and newtonnage measures are fairly similar, except for ships with substantial exempt spaces

under the old system, such as Ro-Ro vessels.

Deadweight tonnes (dwt) is the weight of cargo, stores, fuel, passengers and crew carriedby the ship when loaded to her maximum summer loadline. Up to 1986, statistics werecompiled for imperial deadweight but from 1987 metric units are used (one deadweight

ton (imperial) = 1.016 deadweight tonnes).

TEU (twenty-foot equivalent units) is a measure of the container-carrying capacity of

certain types of ships, being the number of standard twenty-foot containers, which thevessel could carry.

Trading vessels

Trading vessels are those, which carry cargo or passengers for commercial purposes.Certain vessel types, for example dredgers and fishing vessels, are therefore deemed to be

non-trading. Other vessels, whilst constructed for trading purposes, are also deemed to be non-trading because they have been converted for a non-trading use, for example

storage or a floating restaurant, or because they are non-seagoing.

Ship prices (Table 7.5)

These figures, which are priced in US dollars, are taken from the annual Reviewspublished by Fearnleys of Oslo, Norway.

Shiping Trend by Oladokun Sulaiman

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