A lot of debate has gone over the past couple of years on the economics and benefits behind the Eco ship, i.e. new design vessels that are -- allegedly -- offering huge advantages when it comes to consuming less bunker fuels. The controversy lies in the fact that claims of fuel economy made by various shipyards are proving -- so far -- difficult to prove. In any case, an Eco ship comes down to this: it's a vessel, which, through the process of hull, engine design and new technologies makes a significant saving on costs, predominantly with the main savings being on the engine consumptions.
According to the latest report from London-based shipbroker Gibson, "many shipyards claim to build Eco vessels with a fuel saving of 25-30%, however finding concrete data to back this up proves challenging. Shipyards are happy to make statements claiming huge savings with their Eco ship designs, lauding higher levels of performance for current new orders, yet; they are not actually providing any comparable data. This creates a minefield of issues, with shipyards that do deliver on their promises stealing a march on yards that don’t perform, who could find themselves with legal cases and fines for not delivering on ‘Eco’ claims", Gibson said.
It added that "a number of owners have vehemently contested these claims, warning that figures have been greatly exageratted. Torm CEO Jacob Meldggard commentedd “There are a lot of myths. Some have invested in these ships and are promising significant improvements in relation to the existing fleet, calling it an amazing investment. In the other camp, questions are being asked concerning the speed of the new ships, about whether they’ll be able to sail fast enough in bad weather or if the market savings turns solid again, whether the ships will be sailing with smaller cargoes, and so forth. No one really has a clear answer for these questions”.
According to Gibson, "in terms of newbuildings, the Eco discussions are centred on product tankers, but this is only because MRs and LR2s are the current focus of new investment; there are virtually no new orders for crude tankers at the moment! However, this does not mean Eco measures are not being implemented on the high consuming, large tankers. Maersk is reportedly spending up to $35m retrof fitting around 70 tankers over the next 2-3 years, piloting the Becker-Mewis ducts and boss cap fin, along with a raft of other technologies. It is claimed these measures can achieve around 7-8% cost savings.
Gibson notes that "as Eco ships enter service these will be able to perform with significant cost savings compared with their less economic relatives and the owners of these new vessels will reap the benefits, at least in the early years. The maritime press is littered with news of owners and charterers taking the plunge on Eco newbuilds, and in a time of low-priced ships who can fault them. Norden & Scorpio are some of the growing band of tanker owners going down this route and building on the products tanker orderbook. As we get more and more Eco ships, this is likely to undermine the value of the current fleet. So where do we go from here? Only time will tell. Could we be seeing the start of older, less economic tankers being scrapped, unable to compete in a more challenging market with their leaner Eco kinsman? ", wondered Gibson.
Meanwhile, in the tanker markets this week, in the Middle East, the shipbroker said that "charterers looked at regaining control back from owners this week, with only a drip feed of VLCC enquiry entering the market place. Certainly we are coming to an end of the June programe and charterers must be wondering why they rushed in for their end month positions when they see the amount of ships remaining, although delays in China and Singapore have caused a stir with replacement business, but overall charterers will feel the recent spike should be coming to an end. Last done levels to the East were at 270,000mt x ws42.5 and 280,000 x ws22.75 to the West via cape. Suezmaxes had a fairly busy week by their otherwise established lacklustre standards, however all it did was to underline the amount of tonnage at the charterers' disposal. Rates went sideways and any change envisioned is unlikely as West should see 135 x w28 and East around 130 x w55. Aframaxes were given a shot in the arm this week with the remergence of the bashayer stems with longhaul destinations to break the norm of the predictable shorthaul that has dictated for longer than owners would have liked. Rates have reacted slightly due to the high heated nature of the stems, but for the more generic stems from the AG we can't expect too many surprises as rates should remain around 80 x w77.5 for East off forward dates", Gibson noted.
In the North Sea, "it was a mostly a week of failed hopes for Aframax Owners in the North Sea and Baltic. Even though tonnage got very tight for the prompt dates, only a few premiums were achieved as some charterers preferred selling the cargoes and swapping dates in order to avoid paying up. The Baltic stems are getting sold out quickly and next week Owners would have to face a fater tonnage list cramped in to third decades fixing window. Therefore, rates for Baltic-UKC rates are bound to return to its normal 100,000 at ws57.5 and stay flat in the North Sea with 80,000 at ws80. VLCC activity similarly kept flat with only one reported deal fixed for Eastern destinations with levels concluded at US$3.6 million loading Rotterdam for Singapore with port costs included. South Korean tax incentives may provide Charterers further opportunities next week which could inject some much needed interest for VLCC owners", Gibson concluded.