Bimco cautions dry bulk optimism but positive on liner consolidation
Regional manager for Singapore says association is stepping up its activities in new outpost to reflect membership and development in the region
April 19th, 2017 19:24 GMT
by Jonathan Boonzaier
Excitement is growing in dry bulk as the Baltic Dry Index is on a positive trajectory and cargo volumes grow stronger.
While this comes as welcome news for struggling dry bulk players, Maite Bolivar Klarup, Bimco regional manager for Singapore, expresses her hope that it will not lead to a round of irrational exuberance that will push the sector back into the doldrums.
Klarup, who joined the world’s largest international shipping association when it reopened its office in Singapore in June last year, is well positioned to offer comment on the latest developments. She holds an MBA in shipping and logistics, and has a wealth of shipping experience.
She says dry bulk is still in a fragile state. “Fleet growth in the first quarter of 2017 stood at 2.6 %, exceeding 800 million dwt. This was in part due to reduced scrapping. Demolition in January 2017 was half of what it was in January 2016,” she said.
“Although the total iron ore import volumes for 2016 exceeded one billion tonnes for the first time ever, if fleet growth remains above 2%, dry bulk shipping cannot rely on global demand to cure the oversupply caused by this fundamental imbalance in the market.
“Even though the recent lift in freight rates, with the BDI reaching 1,282 at the end of March 2017, is certainly positive, there is still work to be done on the supply side. A significant level of demolition activity must be maintained and increasing focus must also be on keeping slow steaming around.”
Klarup appears to hold a more positive view on the liner sector, where she indicates further consolidation can only bode well for the industry.
“We have seen some positive indicators in the container industry. The demand for container shipping grew steadily in 2016 and in the first quarter of 2017 it allegedly saw a 1% rise. Bimco expects US-bound exports out of Asia to grow slowly and on the shorter-haul trade lanes we expect the ever-rising intra-Asian trades to become even busier while deploying larger ships yet again,” she said.
Like many observing the liner industry, Klarup is convinced that consolidation is key to helping it overcome the challenges it currently faces.
“The severity of the current downturn has generated an amount of consolidation in the industry as companies work to make better use of the larger, more efficient ships. Although these efforts were too little, or too late for some companies, including, Hanjin Shipping, this type of consolidation is expected to become even more common this year, something industry experts say will be necessary for restoring balance to the shipping sector.”
Klarup notes that the most recent joint venture between three Japanese shipping groups, namely Kawasaki Kisen Kaisha (K Line), Mitsui OSK Lines (MOL) and Nippon Yusen Kaisha (NYK), was approved by the Competition Commission of Singapore, with the commencement of joint services set to begin from 1 April 2018.
Last year’s return of Bimco to Singapore was greeted with much enthusiasm by the island state’s shipping community, which was looking forward to closer contact with the organisation and tapping into its resources and operational support.
“Singapore is one of the primary markets for Bimco. It is an area that is constantly developing and growing and where there are always new business projects to consider and new potential members to offer our expertise,” explained Klarup, who was recruited from shipmanager Thome to relaunch Bimco in Singapore.
“During the current challenging market, it is important to be close to our members to offer them support, and to boost collaboration with other regional maritime associations. No doubt Singapore is one of the main Asia Pacific locations for international shipping companies, and home to many of our members. It was, therefore, a sensible place to open our new office and further strengthen our Asian footprint,” she added.
Bimco represents and works for and on behalf of members from all sectors of the shipping industry, including shipowners, brokers, agencies, and associated members.
“In Asia, Bimco has members with very broad interests ranging from very large to very small, managing ships of all sizes and from all segments of the maritime industry. We host networking events for our members to meet, and to exchange knowledge and experiences. We are stepping up our activities in Singapore. This reflects a growing membership and the high level of development in the region,” she said.
Bimco is collaborating with the Maritime & Port Authority of Singapore (MPA) to enhance Bimco training programmes in Singapore during 2017. These programmes aim to support the industry’s manpower and business developments in the country.