Opportunity knocks in 2016
2015 will be a year that many shipowners will be glad to see the back of. Despite tumbling crude prices meaning bunker costs have fallen to levels that should have signaled a return to profitability, the offshore sector has been badly hit and the box and bulk sectors have succumbed to the twin problems of over tonnaging and lack of demand. Unlike individual people who can draw a line under one year and look forward to better fortunes the next, shipowners know that the changing of the year does not remove the problems that are still there and although they wish for a better New Year the reality is currently for more of the same. For all operators 2016 will undoubtedly present many challenges and there will be casualties just as there are in every downturn but for those that can see them there will be opportunities too. The consolidation that many in the box sector predicted are happening as we have seen with CMA CGM’s takeover of NOL being followed by the merger of China’s two state-owned giants COSCO and CSC. They may bring temporary relief but unless there is a mass scrapping of tonnage, mergers do not remove the root causes of the problem. What mergers and ‘paring the fat’ exercises do bring are drastic reductions in employee numbers at all levels. Downturns though can be a time of opportunity just as much as despair and many of those released are skilled and savvy enough to recognise the opportunity they have been given – especially if they also get the security of a reasonable redundancy package. Most successful shipping companies have been founded on the dreams and visions of one or two passionate and knowledgeable men and there is no reason why those with the drive and ambition cannot do the same. They know that a large percentage of the operated fleet of their former employers consists of chartered in tonnage that might be let go and which can be just as easily operated by a small determined group with knowledge of the trades as by bigger companies now mostly controlled by profit seeking shareholders and with commitments to future new orders that may turn out to be white elephants. We must wait a little while more to see if 2016 will be the year of opportunity that ballast system makers have waited long for. If the tipping point for the IMO ballast convention has truly been reached there may be a sudden scramble for systems and drydock space but the result may also mean a bonanza for scrap buyers and a consequent collapse in scrap prices that shipowners definitely will not appreciate. To our readers and followers, ShipInsight hopes that you will find your own opportunities in 2016 and will continue to operate in this fascinating industry with deserved success.