Demand for sea freight even in pandemic

Demand for sea freight even in pandemic

October 20, 2020

The shipping market has been challenging in terms of freight rates in 2020. The shipbroker Intermodal believes that the challenges of 2020 are very different from what we imagine. Also the epidemic has negatively affected global businesses, the supply chain and the economy. In this regard, the sea freight industry has faced severe restrictions.

But the industry has once again dynamically adapted to the “new normal” approach. According to Mr. Theodore Ntalakos, in the dry bulk sector, the world fleet has grown by 3.4% compared to last year. While the growth rate in 2019 was 2.5% and in 2018, 2%. However, dry bulk orderbook is currently below 6% of the world fleet.

Also the number of vessels over the age of 25 has increased by about 50 since last September. Mr. Ntalakos added that “the 171-tanker y-o-y vessel fleet increase (just over 3% of total fleet) was led by the MR segment and comprised of 74 MR, 40 VLCC, 18 Suezmax, 16 Aframax/LR2, 14 Handy and 9 Panamax/LR1 vessel additions.” In general, it can be said that it has been a good year for tankers. But the tanker orderorder is much smaller than in September last year. “It is worth noting that the tanker orderbook had declined by over 100 vessels last year. The current tanker orderbook to fleet ratio is about 7% which is a 5-year low and the 20-plus year-old vessel fleet recorded an increase of around 100 ships,” he said.

The Intermodal analyst believes that strict measures to curb the pandemic have slowed down economic growth in emerging countries. The economic growth forecasts are dire for all regions. They predict a contraction in world GDP by 2020. However, demand for the current freight market is high. It shows that demand for sea freight still continues.

He also sees the pandemic as an additional disruption to the industry. And he sees it as a cut in production, economic worries and political instability. Finally, he says that transportation is an inexhaustible game. In this regard, everyone must strive for its continuation.

Source: Hellenic Shipping News

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