Last Call

As anyone following the maritime industry at all knows, operators across several sectors are facing low rates caused by shrinking demand for their services in conjunction with record overcapacity. Oil field services are what first comes to mind, with the crash in the price of oil two years ago, we have seen record lay offs and massive vessel stacking. To make matters worse, even now, two years down the road we are still seeing deliveries of vessels ordered at oil’s peak. In particular the most expensive vessels with the longest lead times, such as semi submersibles, drill ships, and sub sea contraction and well intervention type vessels.
Aside from the Offshore Oil Industry, other sectors of the world shipping industry have also been hampered with similar problems, albeit over a longer period of time. The dry bulk industry has been bleeding out slowly and painfully over several years, chronic over capacity coupled with the same new order spree has left ship rates depressed and often at or below cost. The slowing of China’s economy and thus there need for raw materials, as well as a shift in state policy towards looking near as opposed to far for resources (see the south china sea). Set things in a downward motion for dry bulk, and shippers vast new build programs hastened things.
The last sector facing these issues, that of container shipping, is what brings me to this post. The past decade of the container ship industry has been characterized as an arm race in the economies of scale. Large and larger ships, dubbed Ultra Large Container Vessels, carrying in upwards of 18,000 TEU’s have been ordered in droves. In a time of growing demand for capacity these ships would make absolute sense. It is vastly more efficient to transport in bulk, on of the reasons seaborne commerce makes up 90% of the goods transported world-wide. However once again capacity and vessel availability is outpacing slowing demand. You practically can’t scrap older smaller ships fast enough, and even if you could, it would take the scrapping of several older ships to balance out the capacity brought to the market by these new generation ULCV’s.
Like many Offshore Oil Services companies, and Dry Bulk shippers, bankruptcy has been a looming threat for several container shipping companies. Several weeks ago the seventh largest one in the world, Hanjin Shipping, announced that they were going out of business. No chapter 11 debt restructuring, outright bankruptcy. Last calls, doors closed, lights off, someone else has the keys. It put a lot of ships in a precarious limbo. Stuck at sea or in anchorage with cargo aboard, however many ports wouldn’t allow entry for fear of non-payment to the various parties involved. From the Pilot’s, tug companies, and terminals, no one wanted to be stuck with the bill. After a lot of these issues were sorted out, many ships started making their final port call’s under the Hanjin flag. I was fortunate to be tipped off to the one of the final arrivals for Hanjin at Maher Terminals at Port Elizabeth. While there would be other calls by other Hanjin ships as late as yesterday, this would be the last ship to unload only at Maher. The reason for this being the last few ships arriving wouldn’t be able to fit under the Bayonne bridge light of cargo. Even this ship, the Hanjin Miami was backloaded with empty containers from other lines to reduce her air-draft. As it was though, I caught her arrival early one morning, before dawn last hitch. For more information on the last few port calls in New York by Hanjin, see here

dsc_7668

dsc_7676

dsc_7689

About newenglandwaterman

1600 Master Near Coastal, Master of Towing Vessels, and a whole binder full of other pieces of paper. You can find me at the controls, hooked up and hard over, when I'm not at home playing with the dogs
This entry was posted in General Ramblings, Photography and tagged , , , . Bookmark the permalink.

One Response to Last Call

  1. Pingback: More Shipping Reports | The Arts Mechanical

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s