The Shipping Year 2001

The year of 2001 saw the firm markets deflate as the world economy took a downturn. The terror attacks of 11. September intensified this tendency and for a while knocked out the bottom of the stock indexes. As we leave 2001 behind, most analysts are promising better times this year.

The shipping industry came to witness a gradual decline in most markets, with temporary high rates for large crude tankers, but otherwise softening for products, bulk and containers. The oil price has come down, with lower bunker prices as a result, but still high enough to keep up new exploration and merit new offshore projects.
New investment in newbuildings and second-hand purchases followed a similar cycle: brisk activity during the first half of the year, a total standstill in September/October and a feeble upturn towards the end.
In the Scandinavian market we have recorded orders for 93 vessels at a total value of more than USD 3.5 billion, of which most of the 20 offshore vessels of USD 486 million were actually optioned before the end of 2000 and only later confirmed.
Eight LNG-carriers ordered by Golar LNG, Bergesen, Knutsen OAS, Høegh and A P Møller account for 38 per cent of the contracting value, followed by product and crude tankers, LPG carriers and offshore vessels as the main categories. It is interesting to note that new Suezmax, Aframax and Panamax tankers were ordered by owners in all the Scandinavian countries, whereas the Danish and Swedish shipbrokers appear the most keen on product tankers. In terms of tonnage, the orders represent some 3.2 million tons tdw, although tonnage is no real measure for a great many of these vessels.

Second hand acquisitions
Secondhand acquisitions from abroad amounted to 92 vessels of a total value in excess of one billion USD. These vessels represent some 2.2 million tdw, not counting passenger and drilling vessels. Interesting purchases were the ferry «Langkapuri Star Aquarius» and the cruise vessel «Crown Dynasty» by DFDS and Fred Olsen Cruises, respectively, each transacted at USD 75 million. The much-publicized USD 140 million take-over of First International Tankers by Tom Steckmest was finalized in June, when the six 46,000 tdw product tankers passed into Norwegian ownership.
It is intersting to note that several bulk carriers have been taken by Norwegian buyers, including three Maersk Panamaxes by the expanding Spar Shipping. Nine reefers have been acquired by Swedish and Norwegian buyers. A number of shortsea vessels were acquired from other European owners, generally older and low-cost units.
Comparing the activity in Scandinavia with Greece, the other vibrant shipping market in Europe, is quite interesting.
According to information from G Moundreas, a Piraeus broker house, Greek owners last year ordered 73 newbuildings, of which 69 cargo vessels of 6.7 million tdw. In terms of tonnage, this is considerably more than the 3.2 million tdw ordered by Scandinavian owners. However, the order value of USD 3.5 billion for Scandinavian account is higher than the Greeks’ which we estimate to USD 2.8 billion.
As expected, the Greeks were far more active in the secondhand market with some 185 acquisitions of 12.6 million tdw. These transactions are estimated by «TradeWinds» at just over USD 2 billion. This is twice as much as Scandinavian owners spent on second-hand imports, 92 vessels of 2.2 million tdw and just above USD 1 billion.

Consolidation process
In addition to the sale and purchase of individual vessels, there were several corporate deals which included entire companies and fleets. Such transactions are parts in the on-going consolidation process which saw Ugland Nordic Tankers of Sandefjord being swallowed by Teekay Shipping and Osprey Maritime of Singapore by John Fredriksen to become Golar LNG. Another such transaction was the Norwegian offshore company Sea-Truck being bought by American GulfMark.
The reefer market was taking a long step towards consolidation by Lauritzen’s acquisition of Cool Carriers at the end of 2000 and Kristian Siem’s restructuring of Swan Reefer and its take-over of Albion Reefers of London in August and the subsequent link-up with NYK Reefers.
In Copenhagen, the Wonsild & Son, Clipper Group and Tschudi & Eitzen have formed closer bonds in the chemical tanker field. The liner services between Norway and UK/Continent were quite dramatically changed with the joint-venture of Seatrans and Nor-Cargo in SeaCargo and the DFDS takeover of the majority in Lys-Line. By the latter step, DFDS has a very strong position in the Skagerak-Europe market.
The market for very large bulk carriers saw Bergesen and Hugo Neu setting up a jointly-owned company in Hamburg to operate a fleet of very large ore and bulk carriers above 200,000 tdw, following Neu’s purchase of the Krupp fleet. There were also Scandinavian participants in the giant Capesize bulk pool set up by Bocimar/Zodiac-ABC. The operational merger between Royal Caribbean Cruise Line and P&O Princess is on its way. although Carnival is trying to thwart the deal.
Compared to the recent years, the total investment by the Scandinavian shipping industry appears to be somewhat higher than average, but well below the boom years of 1997 and 2000. Quite as important is the commercial agility to take part in the reshaping of our industry.

Dag Bakka Jr

Back to SSG 1, 25 January