Substandard tonnage must be removed from the world oil tanker fleet to improve environmental and safety standards, says Drewry Shipping Consultants Ltd., London.
Meantime, the International Association of Independent Tanker Owners (Intertanko), Oslo, contends that as much as 30% of the world's 264 million dwt fleet is surplus to market requirements. It says the only encouraging market trend is the increasing number of ships going to scrapyards.
INSPECTION REFORMS
Drewry reports the International Maritime Organization places great emphasis on toughening inspection procedures to weed out substandard tonnage prior to compulsory retirement age.
But Drewry cites flaws in the inspection and certification system that can only make things worse:
- The high number of classification societies, coupled with tough competition among them, means a large proportion of substandard tonnage will be certified by one society or another.
- Too many surveys and inspections, many of which duplicate others.
- A lack of confidence that classification societies will certify only safe, seaworthy vessels.
Intertanko says the "serious" classification societies are putting their houses in order. It quotes the American Bureau of Shipping (ABS) report for July, which cited 63 vessels dropped or withdrawn from class. Fifty-seven of those fell short of ABS requirements, two were scrapped, and four withdrawn at their owners' request.
Last year, says Intertanko, 250 vessels left Det norske Veritas (DNV). DNV said 100 of these pulled out because owners were not prepared to comply with its rules and preferred less stringent classification societies.
Lloyd's Register, London, reports 85 vessels have been declassed for punitive reasons in first half 1992.
Yet deliveries still outweigh scrapping by almost 4 million dwt, says Intertanko. Because tankers headed for scrap are among the least productive, the market effect is greater than the difference in tonnage indicates.
INTERTANKO VIEW
Speaking to the Organization for Economic Cooperation and Development, Intertanko Managing Director Tormod Rafgard said all OECD nations must work against artificial stimuli for new buildings.
He said shipbuilding subsidies, tax incentives, and other artificial factors continue to add to the supply/demand imbalance.
Increased oil production by the Organization of Petroleum Exporting Countries will boost tanker trade by 2.5% this year, Rafgard said, although tanker rates have virtually collapsed.
"The present order book with the shipyards totals 37 million dwt, a decline from the 43 million dwt total at the start of the year. The latter was the highest since 1976," Rafgard said.
"The order book may be regarded as fairly modest, but it has to be seen in the light of the surplus in the market, which has produced rock bottom freight rates."
Another concern for Intertanko is the plan to deepen the Suez Canal to allow it to handle fully laden very large crude carriers (VLCCs). Rafgard said this alone could reduce VLCC demand by 25 units and further depress the market.
VLCC passage through the canal would trim many days and miles from a Persian Gulf-Rotterdam voyage, thus reducing the number of tankers required to deliver a given volume of oil to European markets. Today's route for VLCCs in that trade is around South Africa's Cape of Good Hope.
DREWRY'S OUTLOOK
Drewry predicts world tanker demand will outstrip supply in 1997, assuming some tightening of inspection procedures (see table).
"In reality, though," Drewry said, "it is unlikely that such a major proportion of the fleet would be ousted in such a relatively short time. Even if such a situation were to emerge, there most likely would be an accompanying increase in new building levels to offset potential shortages, a strategy that would be fostered by increasingly lucrative freight rates."
Regardless of tanker quality, Drewry said, the problem of crew standards remains. Up to 90% of all marine accidents may be caused by human error, Drewry said, vet this subject continues to receive little attention.
"So bad is the problem," Drewry said, "that a growing body of experts is claiming that working practices aboard vessels are becoming as substandard as the aging world tanker fleet. Only when all the shipowners take, or are forced to take, the responsibility to ensure that their vessels are manned by a properly qualified crew, will the situation improve."
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
