Search

ANALYSIS
SHIPPING & MARINE | Contributed Content, Singapore
Published: 25 Feb 10
883 views


Ship owners crushed by new supply and bad rates

Now that the cash flows are disappearing owners are now left with spare capacity, what will it do if rates do not recover asks KMPG?

Some estimates are that up to 10 percent of the world fleet is currently laid up. However, laying up isn't the only option, and many shipowners are deferring this decision. On new orders it may still be possible to cancel, substitute or delay.

Shipbuilders, mindful of empty yards, may be willing to renegotiate. Some are accepting delays to the schedule, as long as they have received a down payment.

Others may offer short term docking facilities after completion (within the order price) and some yards are offering raw material rebates, recognising that making lower margins over a longer period is better than taking huge profit today and being idle tomorrow. Shipowners should be thinking of negotiating over contract modification, some might find willingness to compromise.

Scrapping is always an option. Many will use the downturn to refresh fleets – retire older, inefficient and smaller ships, and make the right structural changes. An upgrade in the quality and efficiency of the fleet may put owners in a strong position as we come out of a recession.

There are other options too – some are slow steaming or accepting lower rates; deploying more vessels but consuming less bunker oil; drifting or temporarily
anchoring (idling), suggesting that things, particularly in some niche markets, may not all be bad or at least not bad enough to incur lay-up costs.

Read the whole thing here.



Sign up for our newsletter

 

Do you know more about this story? Contact us anonymously through this link.

Click here to learn about advertising, content sponsorship, events & rountables, custom media solutions, whitepaper writing, sales leads or eDM opportunities with us.

To get a media kit and information on advertising or sponsoring click here.

LATEST SHIPPING & MARINE JOBS »
PRINT ISSUE »

Subscribe Now
What factors are keeping expats rooted in Singapore?

120 views

What factors are keeping expats rooted in Singapore?

331 views

Can Asian private equity outgrow the west?

78 views

MOST READ EXCLUSIVES

Singapore’s 10 most sought-after 40 and under investors

Singapore’s 10 most sought-after 40 and under investors

Check out who made the cut.

by KRISANA GALLEZO
19 Dec 2014 | 37321 views
 

Singapore’s first permanent lifestyle market opens in Bukit Timah

Singapore’s first permanent lifestyle market opens in Bukit Timah

Over 20 brands and labels are gathered together under one roof.

by KRISANA GALLEZO
5 Jan 2015 | 30281 views

Singapore’s top 5 work from home jobs

Singapore’s top 5 work from home jobs

Here are jobs that you can do while sitting on your couch or in your favorite coffee shop.

by KRISANA GALLEZO
11 Dec 2014 | 25481 views
 

Singapore Business Review’s 2014 Class of 40 and under

Singapore Business Review’s 2014 Class of 40 and under

Meet a summa cumlaude graduate who rises from poverty to become JP Morgan’s head of corporate finance.

by KRISANA GALLEZO
12 Jan 2015 | 25277 views

Find out the 10 most expensive districts to rent an HDB flat in Singapore

Find out the 10 most expensive districts to rent an HDB flat in Singapore

Glitzy Bukit Timah is off the list.

by KRISANA GALLEZO
19 Dec 2014 | 21381 views
 

Don’t settle for less: Legendary Hong Kong brings authentic and traditional HK dishes to Singapore

Don’t settle for less: Legendary Hong Kong brings authentic and traditional HK dishes to Singapore

The restaurant’s construction cost over a million dollars.

by KRISANA GALLEZO
3 Nov 2014 | 9159 views

Singapore’s hot new restaurants in December

Singapore’s hot new restaurants in December

Japanese restos take over Singapore’s sizzling dining scene.

by KRISANA GALLEZO
17 Dec 2014 | 7906 views
 

This food hub in Seah Street brings a throwback experience to dining

This food hub in Seah Street brings a throwback experience to dining

It offers an exciting lunch menu which changes every week.

by KRISANA GALLEZO
16 Jan 2015 | 5012 views

Singapore’s first news aggregation app attracts 1 million users in two years

Singapore’s first news aggregation app attracts 1 million users in two years

Stay in the loop with news and lifestyle content from SBR and 600 other publishers.

by KRISANA GALLEZO
10 Dec 2014 | 2711 views
 

Go inside the gorgeous new headquarters of Ingredion in Singapore

Go inside the gorgeous new headquarters of Ingredion in Singapore

Its state-of-the-art kitchen space is not to be missed.

by KRISANA GALLEZO
18 Dec 2014 | 2068 views

This startup created the world’s first bed sensor technology

This startup created the world’s first bed sensor technology

No more patients accidentally falling off hospital beds.

by KRISANA GALLEZO
14 Jan 2015 | 1944 views
 

What Singaporean investors can expect from Okinawa’s development

What Singaporean investors can expect from Okinawa’s development

A 40% tax cut in setting up business is expected to lure investors.

by KRISANA GALLEZO
12 Dec 2014 | 1872 views

Jack Wills opens its first store in Singapore

Jack Wills opens its first store in Singapore

A 'fun' brand that values the Brit vibe. Put your game face on!

by KRISANA GALLEZO
10 Dec 2014 | 1687 views
 

Meet INSEAD’s new chairman of the board

Meet INSEAD’s new chairman of the board

Find out how Andreas Jacobs plans to bring “business as a force for good”.

by KRISANA GALLEZO
14 Jan 2015 | 1574 views

The future of innovation: What’s next after Facebook and Twitter?

The future of innovation: What’s next after Facebook and Twitter?

A video version of Twitter might be under way.

by KRISANA GALLEZO
11 Dec 2014 | 1416 views
 

What it’s like going into business with your significant other

What it’s like going into business with your significant other

A couple who founded an artisanal food outlet, P.Bistro, shares experience.

by KRISANA GALLEZO
9 Jan 2015 | 1365 views

This could be your best pal when no one’s around to help during an emergency

This could be your best pal when no one’s around to help during an emergency

TagBio's ID-Life features accessories with critical info embedded in QR codes.

by KRISANA GALLEZO
16 Dec 2014 | 1267 views
 

Kungfumath wants to revamp boring e-learning portals

Kungfumath wants to revamp boring e-learning portals

“Play with numbers” in its literal sense.

by KRISANA GALLEZO
5 Dec 2014 | 1095 views

SFIC Institute's new training hub overhauls carpenters' career image

SFIC Institute\'s new training hub overhauls carpenters\' career image

It’s the first carpentry training center in Singapore’s furniture industry.

by KRISANA GALLEZO
10 Dec 2014 | 1063 views
 

Inverted Edge gives spotlight to all independent contemporary fashion designers

Inverted Edge gives spotlight to all independent contemporary fashion designers

The homegrown startup has raised US$1.6M total funding in two years.

by KRISANA GALLEZO
3 Nov 2014 | 974 views

The heat is on: This office literally gets a bit hot for their green drive

The heat is on: This office literally gets a bit hot for their green drive

Discover how they execute their green initiatives in the office.

by KRISANA GALLEZO
22 Jan 2015 | 770 views
 

FTMSGlobal Academy Singapore launches new weekend MBA

FTMSGlobal Academy Singapore launches new weekend MBA

The course fee is below $20,000.

by KRISANA GALLEZO
8 Jan 2015 | 768 views

Here’s how migrants can be sure their loved ones back home paid the doctor a visit

Here’s how migrants can be sure their loved ones back home paid the doctor a visit

This NRI-focused startup also gives migrants monthly feedback from the doctor.

by KRISANA GALLEZO
7 Jan 2015 | 644 views
 

ENVision campaign‘s ‘hard truth’ could make you think twice

ENVision campaign‘s ‘hard truth’ could make you think twice

Singapore might run out of space for trash by 2035 and more.

by KRISANA GALLEZO
15 Dec 2014 | 585 views