Institute of Chartered Shipbrokers
London & South East Branch

Investors Are Cautious about Ordering Newbuildings

by Richard Scott FICS, member of London & South East Branch Committee, 22 March 2019
 
Activity in the newbuilding market remains quite subdued, compared with many previous years. Signs pointing to an upsurge in the immediate future are absent. Looking at the broad pattern of new vessel ordering, a revival has unfolded since annual orders collapsed to a very low volume three years ago, but the recovery has been restrained.
 
Statistics for global newbuilding orders placed annually, including all commercial ship types, show a total of 87 million deadweight tonnes in 2018, a figure which probably will be revised. This provisional total, calculated by Clarksons Research, is about 2 percent below the preceding year’s 89m dwt volume, but still well above the decade’s low point in 2016 when only 28m dwt was recorded. Previously, in both 2010 and 2013, annual orders exceeded 150m dwt.
 
The entire orderbook at the end of last year, a ‘snapshot’ view including contracts agreed during last year as highlighted above, totalled 220m dwt, equivalent to about 11 percent of the existing world fleet. A noteworthy aspect is that orderbooks for the main individual sectors - tankers, bulk carriers and container ships - were all within a narrow range of 10-12 percent of respective existing fleets. By contrast the orderbook for liquefied natural gas (LNG) carriers was much larger, at 25 percent of existing tonnage.
 
For shipping markets, the newbuilding deliveries pace which is likely to result from the orderbook is particularly significant. About half of the end-2018 orderbook total is scheduled for delivery this year, followed by under two-fifths next year. But actual deliveries in 2019 almost certainly will be lower than the scheduled figure, a typical outcome. Perhaps this year’s total will be broadly in line with last year’s 80m dwt recorded newbuilding deliveries.
 
What explains the mostly restrained investors’ attitude to ordering new ships? Although circumstances in individual sectors vary, common factors are visible. Many shipowners are more uncertain about future good investment returns, after long periods of difficult freight markets in the past decade. Further lengthy market adjustments may be needed to restore market balances, aided by relatively low new capacity volumes added. Less abundant finance availability may have contributed. Greater ordering ‘self-discipline’ has resulted. 
 
A longer article about this topic can be found at:

Thursday 28 March 2019 - Southampton Pub Night

The Branch welcomes you to our second event in Southampton and is kindly supported and partnered with local members of the Maritime Community, come along and meet members of the Institute, students and committee to learn more about the Institute, Professional Qualifications and opportunities within the Maritime Industry.

The venue will be “The Grand Cafe" at South Western House, Terminus Terrace, Southampton SO14 3AS, from 18:00 on Thursday 28 March 2019.

Drinks and Nibbles will be provided (until tab expires). 

RSVP Mike Harrison (for catering purposes) at This email address is being protected from spambots. You need JavaScript enabled to view it. or +44 (0) 7785 372217.

Monday 15 April 2019 - ICS London Branch Revision Evening

We are pleased to announce that this spring's Revision Evening will take place at Clarksons Platou (Commodity Quay, St Katharine Docks, London, E1W 1BF) in the evening of Monday 15 April 2019, from 18:00 to 21:00.

All those who are registered as students are welcome to attend this event for whichever subjects they are taking. The plan for the evening will be as follows:

 - Part one: A talk by Rita Barnish FICS about how to prepare and revise, exam techniques and how to structure answers. This is a presentation you must hear if you haven’t sat awritten exam for a while.

 - Part two: A presentation by Richard Scott FICS about where to find market information on topics being studied. Richard is an accomplished lecturer in maritime studies.

 - Part three: Open session where students can meet and talk with Members and Fellows of the Institute who have experience and specialisms in particular subjects. This gives the opportunity to go through past exam questions and talk about specific parts of each subject’s syllabus.

The Revision Evening is an excellent opportunity to prepare for exams and be able to get help with particular areas of the subjects. It is an event where students can also meet and talk about the exams and relax.

Important: this event is free of charge to attend but please register at This email address is being protected from spambots. You need JavaScript enabled to view it. and also inform us BEFORE 8th APRIL which subjects you are studying, so that we can arrange to have an expert available to answer your specific questions on those subjects.

Thursday 30 May 2019 - Opportunity to Network at our new venue Revolution Bar

The Branch invites you to come along for a great social night to this superb venue and meet members of the Institute, students and committee to learn more about the Institute, Professional Qualifications and opportunities within the Maritime Industry.

The new venue will be "REVOLUTION BAR” at 140-144 Leadenhall Street, London, EC3V 4QT. (Nearest underground Liverpool Street.)

First Drink (Beers/Wine) will be provided. Until tab expires,

RSVP Mike Harrison (for catering purposes) at This email address is being protected from spambots. You need JavaScript enabled to view it. or +44 (0) 7785 372217.

COME ALONG AND SUPPORT THE BRANCH