27-10-03 The international shipping industry will require approximately $ 450 bn in funding between now and 2010 to finance new and second-hand ships, according to shipping officials. This includes about $ 350 bn in new ship orders and over $ 100 bn in second-hand acquisitions.
"There is a growing body of opinion that says that ship finance is set to become a more expensive commodity for borrowers," said Nigel Gardiner, managing director of Drewry Shipping Consultants. "Part of this is due to a reduction in capacity available from the major banks. Basel II rules will also increase the spread margins on shipping loans. Smaller shipping companies will be subject to more onerous borrowing requirements."

Last year, over 5.4 bn cargo tons were carried by the global shipping industry. About 44 % of this was bulk liquids, 39 % dry bulk, 10 % containerised cargo and the remaining 7 % general cargo.
Gardiner was making a presentation at a Strategic Forecasting Forum highlighting the state of internationalshipping. According to statistics, the 5.4 bn tons of cargo moved by sea represent about 60.4 % of the 8.53 bn tons of cargo moved by air, land and sea together.

Between 1994 and last year, air cargo registered the highest growth of 6.86 % while the land and sea cargo sector witnessed 5.9 and 3.64 % respectively. Last year, Dubai's ports handled about 9.3 mm tons of cargo, including 4.19 mm TEUs.
"World trade continues to grow but it is highly susceptible to changes in global economic activity. Almost two-thirds of all trade (in volume terms) is moved by sea," he said. "The fastest growing sectors (trade and shipment demand) are containers, liquefied gases and chemicals. However, changes in supply reflect the underlying changes in demand. Hence, the container has grown in size, while the oil fleet has still not reached its previous peak."

Globally, 3,465 oil tankers representing 297.2 mm dwt fulfil the demand of the world's energy transport. The current order book comprises 79.5 mm dwt of additionalcapacity, or 26.8 % of the existing fleet capacity, which will be required to meet the additional demand of energy transportation in the coming years.
The dry bulk fleet consists of 5,644 vessels representing 299.1 mm dwt. The current order book of 40 mm dwt will increase the present fleet's capacity by 13.4 %. The global container carrier fleet currently has 3,123 vessels with a capacity of 6.24 mm TEUs. In the coming years, an additional 2 mm TEUs will be added to increase the present capacity by 32 %.

Currently, over 1,754 tankers carry chemicals with a capacity of 25 mm dwt. An additional 3.8 mm dwt will be added to raise the current capacity by 15.3 %. Among the energy carriers, 921 vessels carry LPG while 145 ships transport LNG. He said the record of shipping in recent years is better than the headlines suggest.
"Oil spills have declined by 70 % in the last decade. The actual loss rate for all vessel types over 100 gross tons has halved in the last ten years," he said.

While giving an overview of the global shipping industry, Gardiner also underlined the challenges lying ahead.
"The recent spate of terrorist attacks and the potential for further incidents has led to significant change in the whole world of maritime security and safety," he said. "The International Maritime Organisation (IMO) approach has been to embed extensive but basic maritime requirements in Safety of Life at Sea (SOLA), complemented by a new international code for the Security of Ships and Port Facilities (ISPC Code).