With the sinking of the tanker Erika off France in 1999 still casting a long shadow over the maritime sector, the decision by the International Maritime Organization in London last month to rubber-stamp a new global timetable to phase out all single-hull tankers within 15 years from September 2002 had few detractors.
The IMO called the fast-track tanker decommissioning program, to be enshrined in the MARPOL convention on the prevention of marine pollution, a "landmark for the cause of safer shipping and cleaner oceans."
Just what impact this phase-out plan will have on tanker fleet growth in the short-term appears to now be emerging. According to UK-based analysts Ocean Shipping Consultants Ltd., the IMO timetable, because it is "more relaxed than previously proposed," will hold back tanker scrapping levels in the near term and combine with a the global economic slowdown "to undermine current freight market strength-despite an ongoing preference for modern tonnage."
A profound impact
"The IMO agreement is set to have a profound impact on near-term product tanker fleet developments," OSC said in a recent study. "For example, the adopted IMO schedule would have MARPOL tankers built in 1973-of around 0.6 million dwt-phased out by 2003, compared to over 3 million dwt under its earlier proposals."
"Scrapping levels are now expected to be much lower under the agreed phase-out schedule, falling back from 2 million dwt in 2000 to only 500,000 dwt in 2001, before rising to 1.5 million dwt in 2002 and 1.8 million dwt in 2003," said OSC.
At the same time, newbuild deliveries worldwide are forecast to rise significantly, according to OSC data, reflected in the current orderbook of 6.4 million dwt-translating to around 15% of the present fleet. Product tanker deliveries are expected to average over 2 million dwt/year during 2001-03, up from 1.6 million dwt in 2000.
'IMO-induced' implications
The repercussion, then, is that despite a 4% rise in global fleet capacity this year to 44.3 million dwt, a sharp improvement after the 2.5% decline in 2000, fleet growth-in the face of a demand for modern tonnage-will be almost static through 2003 due to rising "IMO-induced" decommissioning levels.
With global product volumes predicted by OSC to grow by less than 1%/year through 2003 and-after rising to 4%/year during 2004-05-slowing back down to around 1%/year "for the long term," perhaps the initial influence of the IMO phase-out schedule will be the worst the maritime sector has to face.
Moreover, the IMO timetable looks to have been a middle-way agreement, for it was promoted on the day as accelerating the earlier MARPOL 1992 regulation that legislated for the phasing out of single-hull tankers, but over a "more protracted period."
There remains room, too, for some maneuvering. When it announced its 158 member states had endorsed the new phase-out timetable, IMO noted that although 2015 is set as the cut-off date for the decommissioning of all single-hull tankers, the flag state administration "could allow some newer single-hull ships registered in its country that conform to certain technical specifications to continue trading until the 25th anniversary of their delivery."
