Dry bulk deliveries reached 68.4% of originally scheduled in 2009
These days most dry bulk shipping analysts are focusing on tonnage oversupply issues, which could hamper the sector"s rebound prospects. While ship owners have been keeping an positive stance, proving rather optimistic on the future, the fact remains that the world orderbook is still massive. In a recent report, Worldyards attempts to provide a realistic approach to numbers reported thus far, in order to offer a clearer picture.
According to the report a total of 795 bulkers were supposed to be delivered, but only 408 actually made it in the water. ?Slippage (strictly defined as construction delay and requested deferral) was 27%. If we add the deductions, that became 49% (in number terms). This is the figure commonly cited. But then we must add the 136 deliveries not known to us in the beginning of the year. So finally 544 ships were actually delivered ? in quantitiative terms about 68.4% of what was scheduled. In other words, a capacity equivalent to 31.6% of the scheduled delivery as per 1st January 2009 were not delivered, slightly higher than the actual slippage? says Worldyards.
Meanwhile, the research said that deductions, defined as fictitious, failed, cancelled by seller default, or mutual agreement to terminate was 18% (in dwt terms). This means that the combined ?no shows? of vessels was 45% in dwt capacity terms, but if one adds in deliveries that were spillover from 2008, or other unknown orders, the actual ?no shows? stands at 31.6% of dwt tonnage. ?Broadly speaking, for bulk carriers, in deadweight terms about 1% (7 ships) were delivered ahead of schedule (some actually delivered in 2008 ? for instance there is one VLOC which we thought should be delivered in February 2009 however later investigation revealed that she was actually delivered October 2008), and about 50% on time. The rest is the interesting part. About 21% of the orders (in number terms) were removed from the orderbook and we would categorise as ?deductions?. This is translated into 169 ships equating to approximately 18% of the dwt capacity.
All of the above though are based on the assumption that scheduled delivery at 1 January 2009 known to us was 100% correct. ?Except that it isn"t. There are two reasons. Firstly, there were ?spillovers? from delays from previous periods. For instance, a vessel scheduled to be delivered in December 2008 was instead handed over to the owners in January 2009. Secondly and to a much bigger scale, the existence of what Worldyards call ?newly surfaced existing orders? ? delivery from orders that were not known to us beginning of the year - a major source (but not the only one) is Japan. We can understand that in some people"s minds, the orderbook could be ?overstated? and would shrink as construction and finance problems start to impact execution. On the other hand, we would also remind our readers that the orderbook can be and is also ?understated?. Worldyards highlighted the systematic under-reporting by Japanese shipyards, back in 2006 this holds true even today. From these sources (spillovers and newly surfaced orders) an additional 136 ships hit the water in 2009. These represent the extent to which the orderbook was ?understated? explained the report.