Seaborne trade witnessed a notable uptick in 2023, registering a 3% increase to a $12.4 billion, according to data from Clarksons Research.
The research said the global maritime landscape further unveiled a 3% growth in the world fleet, reaching an 2.3 billion deadweight tons (dwt).
Despite this expansion, the newbuilding orderbook demonstrated a measured 3% year-on-year increase, standing at 126 million compensated gross tons (CGT).
It as China now contributes to over 50% of the total output for the first time in history.
Amidst this thriving industry, significant regulatory changes aimed at curbing emissions have been introduced.
Simultaneously, the sector witnesses increased investments in alternative fuels and energy-saving technologies, showcasing a concerted effort to navigate the evolving landscape of sustainable shipping practices.
The global maritime landscape further unveils a 3% growth in the world fleet, reaching an 2.3 billion deadweight tons (dwt). Despite this expansion, the newbuilding orderbook demonstrates a measured 3% year-on-year increase, standing at 126 million compensated gross tons (CGT).
With shipbuilding production experiencing a substantial 10% year-on-year boost, reaching 35 million CGT, a noteworthy milestone has been achieved: China now contributes to over 50% of the total output for the first time in history.
A closer examination by the researcher revealed robust freight and day rate levels within the realm of “energy” shipping, encompassing gas, tankers, and offshore oil and gas sectors.
Strong rates were led by the LPG sector with an all-time high VLGC rates $91,625/day, and also supported by another strong year for tankers. LNG rates were down but still healthy and a continued offshore recovery (“Floater” drilling rigs hit 90% utilization for the first time since 2014), Clarksons noted.
Related Posts
“Although our average day rate index, the ClarkSea, fell y-o-y (driven by a now “normalized” container market), it remained 33% above the ten-year trend with gas, tanker, offshore, and car carrier all experiencing strong conditions and dry bulk and containers (Red Sea disruption) rallying late on. With a return to trade growth and a good flow of newbuild and S&P, it was a positive year for many market segments across the shipping industry,” Steve Gordon, Global Head of Clarksons Research, said.
The market saw another very strong year, with average tanker earnings remaining elevated at $40,775/day (steady y-o-y, 2022: $40,766/day), with continued support from longer-haul trades following the redistribution of Russian oil flows post-Ukraine conflict. VLCC earnings increased by 80% y-o-y to $43,206/day on the back of rebounding Chinese crude imports and increased Atlantic exports.
In contrast, earnings in the Suezmax and Aframax sectors remained very robust, exceeding VLCC earnings for a third consecutive year. Clean MR earnings eased slightly but remained very robust at $26,948/day.
2023 was a softer year for bulkers, with average bulk carrier earnings falling 40% y-o-y to $12,371/day, amid reduced fleet inefficiencies (e.g. congestion) and impacts from cumulative fleet growth over recent years (offsetting firmer demand trends).
The fourth quarter was seasonally stronger with earnings averaging $17,468/day. Capesize spot earnings averaged $12,429/day in 2023, similar to the weak 2022 level, while earnings in the smaller segments dropped back.
Freight and charter rates dropped back in 2023 as the market ‘normalized’ from exception 2021-22 levels, with average freight rates down 71% y-o-y and average charter rates down 68% (but remaining above pre-Covid 2019 levels).
The outlook suggested that rates would “bump along at the bottom” in 2024, but with the disruption in the Red Sea (over 300 containerships of 4m TEU have now diverted via the Cape), Shanghai to Europe box freight rates have, for the moment, trebled (but are still 65% lower than the Covid-19 peak).
VLGC spot earnings were exceptionally strong, rising 69% y-o-y to an all-time high of $91,625/day, on the back of firm US-Asia LPG trade, a wide West-East arbitrage and disruption at the Panama Canal.
LNG rates softened y-o-y (from an all-time high 2022) but remained healthy, with spot rates for a 160k cbm DFDE vessel averaging $97,077/day, 34% above the ten-year trend.
With a significant orderbook (52% of the fleet), the fleet is poised to expand strongly in the coming years to help support a record volume of liquefaction capacity set to come online across 2025-27, Clarksons anticipates.
