Here’s how quarantines could impact the tanker shipping market
This article examines recent progress and initiatives by the shipping industry to meet new IMO targets and provides Signal Ocean Platform data on emissions developments and trends.
Subscribe for our latest news, straight to your inbox:
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Share this post
China is now restricting vessels arriving from nine countries including the U.S. and Singapore in efforts to limit the spread of coronavirus by visiting ships and their crew, according to Bloomberg.
What if the whole world — or a large part of the world — started imposing such quarantines? What would longer voyages mean for overall vessel availability?
MR1s, with shorter average voyage lengths, would be most impacted
“Partial Quarantine”= a 14 day quarantine imposed only on vessels which originated in Japan, Korea, Iran, France, Germany, Spain, the U.S.A, Singapore, and Italy. “Global Quarantine” = all vessels subject to quarantine, regardless of origin.
VLCCs, which typically have ballast or laden legs exceeding 14 days, would be minimally affected by the imposition of both a partial and a global quarantine.
Assuming that demand stays the same, we could see a significant impact on vessel supply of a similar order of magnitude.
Which countries, if made part of the quarantine, would account for the greatest increase in total voyage duration?
Countries where volumes are high and short laden legs originate would contribute a larger percentage of increase in total voyage duration, if global ports were to add them to their list of quarantine countries.
Here are the countries that would account for the greatest percentage increase in total voyage duration across all vessel classes, should they be included in a 14-day quarantine scenario. For example, a quarantine applied to voyages originating in Russia would alone account for a 4.72% increase in total voyage duration.
Additional commercial impacts of quarantines
The global or partial imposition of 14-day quarantines will certainly shape the tanker shipping market.
Of course, we may also see a decrease in vessel demand that could blunt the impact of reduced vessel supply in the market.
One of the most significant impacts may be that the dollar-per-ton rate of short voyages could become much more expensive compared to long-haul voyages.
Longstanding trade routes may experience a disturbance as charter parties seek to avoid calling ports where additional quarantine-related wait times are required.
We will continue to monitor the situation and update our analysis as new developments come to light.
To produce this analysis, we leveraged Signal Ocean Technology, and used Signal Maritime’s data. We looked at the length of the ballast and laden legs for all voyages that occurred since January 1, 2019, across MR1, MR2, Panamax, Aframax, Suezmax, and VLCC (dirty and clean segments) and adjusted the corresponding duration to reflect the imposition of a) a partial global quarantine and b) a global quarantine. We ignored delays due to canals crossing, bunkering operations, repairs, etc.
To learn more about datasets, contact support@thesignalgroup.com
Creating a sustainable world requires us to embark on a journey towards a zero emission future, where every step is a commitment to preserve our planet for future generations.
Albert Greenway
Environmental Scientist, Sustainability Expert
No items found.
Increased Use of Renewable Energy:
Shipping companies are embracing renewable energy sources to power onboard systems and reduce emissions during port operations. Solar panels and wind turbines are being installed on vessels to generate clean energy, reducing reliance on auxiliary engines, and cutting down emissions. Shore power facilities in ports allow ships to connect to the electrical grid, eliminating the need for onboard generators while docked.
Collaboration and Industry Partnerships:
Recognizing that addressing emissions requires collective action, shipping companies, governments, and organizations have formed partnerships and collaborations. These initiatives focus on research and development, sharing best practices, and promoting knowledge transfer. Joint projects aim to develop and deploy innovative technologies, improve infrastructure, and create a supportive regulatory framework to accelerate the industry's transition towards a greener future. The Zero Emission Shipping - Mission Innovation.
To pave the way for a greener future in shipping, the availability of alternative fuels plays a vital role in their widespread adoption. However, this availability is influenced by factors such as port infrastructure, local regulations, and government policies. As the demand for cleaner fuels in shipping rises and environmental regulations become more stringent, efforts are underway to improve the accessibility of these fuels through infrastructure development, collaborations, and investments in production facilities.
Liquefied Natural Gas (LNG) infrastructure has seen significant growth in recent years, resulting in more LNG bunkering facilities and LNG-powered vessels. Nonetheless, the availability of LNG as a marine fuel can still vary depending on the region. To ensure consistent availability worldwide, there is a need for further development of LNG supply chains and infrastructure. For biofuels, their availability hinges on production capacity and the availability of feedstock. Although biofuels are being produced and utilized in various sectors, their availability as a marine fuel remains limited. Scaling up biofuel production and establishing robust supply chains are imperative to ensure wider availability within the shipping industry.Hydrogen, as a fuel for maritime applications, is still in the early stages of infrastructure development. While some hydrogen vessels have been tested or introduced in the first quarter of last year, the infrastructure required for hydrogen production and distribution needs further advancement.
Ammonia, as a marine fuel, currently faces limitations in availability. The production, storage, and handling infrastructure for ammonia need further development to support its widespread use in the shipping industry.Methanol, on the other hand, is already a commercially available fuel and has been used as a blend with conventional fuels in some ships. However, its availability as a standalone marine fuel can still be limited in certain regions. Bureau Veritas in October 2022 published a White Paper for the Alternative Fuels Outlook. This white paper provides a comprehensive overview of alternative fuels for the shipping industry, taking into account key factors such as technological maturity, availability, safety, emissions, and regulations.
Creating a sustainable world requires us to embark on a journey towards a zero emission future, where every step is a commitment to preserve our planet for future generations.
Albert Greenway
Environmental Scientist, Sustainability Expert
Increased Use of Renewable Energy:
Shipping companies are embracing renewable energy sources to power onboard systems and reduce emissions during port operations. Solar panels and wind turbines are being installed on vessels to generate clean energy, reducing reliance on auxiliary engines, and cutting down emissions. Shore power facilities in ports allow ships to connect to the electrical grid, eliminating the need for onboard generators while docked.
Collaboration and Industry Partnerships:
Recognizing that addressing emissions requires collective action, shipping companies, governments, and organizations have formed partnerships and collaborations. These initiatives focus on research and development, sharing best practices, and promoting knowledge transfer. Joint projects aim to develop and deploy innovative technologies, improve infrastructure, and create a supportive regulatory framework to accelerate the industry's transition towards a greener future. The Zero Emission Shipping - Mission Innovation.
To pave the way for a greener future in shipping, the availability of alternative fuels plays a vital role in their widespread adoption. However, this availability is influenced by factors such as port infrastructure, local regulations, and government policies. As the demand for cleaner fuels in shipping rises and environmental regulations become more stringent, efforts are underway to improve the accessibility of these fuels through infrastructure development, collaborations, and investments in production facilities.
Liquefied Natural Gas (LNG) infrastructure has seen significant growth in recent years, resulting in more LNG bunkering facilities and LNG-powered vessels. Nonetheless, the availability of LNG as a marine fuel can still vary depending on the region. To ensure consistent availability worldwide, there is a need for further development of LNG supply chains and infrastructure. For biofuels, their availability hinges on production capacity and the availability of feedstock. Although biofuels are being produced and utilized in various sectors, their availability as a marine fuel remains limited. Scaling up biofuel production and establishing robust supply chains are imperative to ensure wider availability within the shipping industry.Hydrogen, as a fuel for maritime applications, is still in the early stages of infrastructure development. While some hydrogen vessels have been tested or introduced in the first quarter of last year, the infrastructure required for hydrogen production and distribution needs further advancement.
Ammonia, as a marine fuel, currently faces limitations in availability. The production, storage, and handling infrastructure for ammonia need further development to support its widespread use in the shipping industry.Methanol, on the other hand, is already a commercially available fuel and has been used as a blend with conventional fuels in some ships. However, its availability as a standalone marine fuel can still be limited in certain regions. Bureau Veritas in October 2022 published a White Paper for the Alternative Fuels Outlook. This white paper provides a comprehensive overview of alternative fuels for the shipping industry, taking into account key factors such as technological maturity, availability, safety, emissions, and regulations.
Here’s how quarantines could impact the tanker shipping market
By Semi Assimakopoulou and Kostis Chatzimichalis
Posted by
The Signal Group
|
March 27, 2020
China is now restricting vessels arriving from nine countries including the U.S. and Singapore in efforts to limit the spread of coronavirus by visiting ships and their crew, according to Bloomberg.
What if the whole world — or a large part of the world — started imposing such quarantines? What would longer voyages mean for overall vessel availability?
MR1s, with shorter average voyage lengths, would be most impacted
“Partial Quarantine”= a 14 day quarantine imposed only on vessels which originated in Japan, Korea, Iran, France, Germany, Spain, the U.S.A, Singapore, and Italy. “Global Quarantine” = all vessels subject to quarantine, regardless of origin.
VLCCs, which typically have ballast or laden legs exceeding 14 days, would be minimally affected by the imposition of both a partial and a global quarantine.
Assuming that demand stays the same, we could see a significant impact on vessel supply of a similar order of magnitude.
Which countries, if made part of the quarantine, would account for the greatest increase in total voyage duration?
Countries where volumes are high and short laden legs originate would contribute a larger percentage of increase in total voyage duration, if global ports were to add them to their list of quarantine countries.
Here are the countries that would account for the greatest percentage increase in total voyage duration across all vessel classes, should they be included in a 14-day quarantine scenario. For example, a quarantine applied to voyages originating in Russia would alone account for a 4.72% increase in total voyage duration.
Additional commercial impacts of quarantines
The global or partial imposition of 14-day quarantines will certainly shape the tanker shipping market.
Of course, we may also see a decrease in vessel demand that could blunt the impact of reduced vessel supply in the market.
One of the most significant impacts may be that the dollar-per-ton rate of short voyages could become much more expensive compared to long-haul voyages.
Longstanding trade routes may experience a disturbance as charter parties seek to avoid calling ports where additional quarantine-related wait times are required.
We will continue to monitor the situation and update our analysis as new developments come to light.
To produce this analysis, we leveraged Signal Ocean Technology, and used Signal Maritime’s data. We looked at the length of the ballast and laden legs for all voyages that occurred since January 1, 2019, across MR1, MR2, Panamax, Aframax, Suezmax, and VLCC (dirty and clean segments) and adjusted the corresponding duration to reflect the imposition of a) a partial global quarantine and b) a global quarantine. We ignored delays due to canals crossing, bunkering operations, repairs, etc.
To learn more about datasets, contact support@thesignalgroup.com
