Post-COVID Shipping Markets Enjoy Rosy Setting

The shipping markets have been enjoying a rather buoyant setup in the post-COVID era. In its latest weekly report, shipbroker Xclusiv said that “the global shipping industry, particularly the bulk carrier and tanker segments, has experienced a remarkable resurgence since 2020. Sustained high freight rates, coupled with robust demand and supply dynamics, have created a favorable environment for both established and new players”.

According to Xclusiv, “the bulk carrier market has been particularly buoyant. Since January 2020, 65% of the days have witnessed Baltic Exchange Time Charter Equivalent (TCE) rates exceeding USD 15,000 for Capes and about 45% of the days for the rest of the dry bulk market. This is a significant milestone, considering that the operating expenses (OPEX) for these vessels typically range from USD 5,000 to USD 9,500, depending on age and size. Current data reveals that the bulk carrier market alone boasts approximately 2,290 group companies with ownership of vessels larger than 20,000 DWT. Among these companies, ownership distribution varies widely: a) 7 companies hold over 101 vessels, b) 13 companies own between 61 and 100 vessels, c) 44 companies have fleets of 31 to 60 vessels, d) 218 companies manage between 11 and 30 vessels, e) 250 companies control between 6 and 10 vessels, f) The vast majority, 1,758 companies, own between 1 and 5 vessels. Since 2020, bulk carrier companies with fleets of 1 to 5 vessels and those with 61 to 100 vessels have grown significantly, by 34% and 86% respectively. This surge indicates the entrance of new players and underscores the enduring appeal of dry bulk shipping, largely due to stable freight rates and rising asset values. Other ownership categories in the bulk sector have seen modest growth, between 8% and 10%, as established owners continue to build and expand their fleets, contributing to a more robust market landscape”.

Meanwhile, “the tanker market, after a challenging period, has also seen a strong recovery since 2022. While VLCC TCE rates have exceeded USD 15,000 on 65% of the days, the other tanker segments have consistently surpassed this threshold on about 90% of the days. Considering that the operating expenses for these vessels typically range from USD 7,500 to USD 12,000, depending on age and size, tanker market is experiencing at period of 2.5 consecutive years that ships have comfortably covered their OPEX, something which has not happened at least since 2009. The tanker market has  shown resilience, with significant growth in smaller fleet sizes, especially since the recovery of tanker rates in 2022 following a prolonged downturn. In 2024, the tanker market includes: a) six companies with fleets of over 101 tankers, b) eight companies owning between 61 and 100 tankers, c) nineteen companies managing 31 to 60 tankers, d) a larger segment of 107 companies holding 11 to 30 tankers, e) a further 139 companies operating fleets of 6 to 10 tankers, f) the majority of owners, 1,249 companies, possess between 1 and 5 tankers. From 2022 to 2024, the number of tanker group companies with fleets of 1 to 5 vessels has grown by 23%, and those with 6 to 10 vessels by 9%. This upward trend reflects a surge in investment interest, with numerous new entrants from either different sectors of the shipping industry or completely unrelated fields. Additionally, larger tanker owners have strategically reduced or sold off portions of their fleets, reshaping the market dynamics as new participants seize these assets”, the shipbroker said.

“In both markets, smaller fleets are rapidly increasing, signalling the entry of new capital and investors enticed by high freight rates and asset appreciation. This trend reflects a balanced expansion strategy, as veteran players retain and upgrade their fleets while new entrants bring renewed dynamism to dry bulk and tanker shipping”, Xclusiv concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide