Changing regulations in the maritime industry will not only put cost pressure on shipping companies, it might also ease supply-demand imbalances.
To comply with the new regulations, ship owners must decide whether to incur investment costs for ballast water treatment systems, scrubber technology and class renewals or alternatively to scrap the vessel from the end of 2017 onwards. Our research indicates that on average 13 % of the global merchant fleet (dry bulkers, container, oil tankers) might be scrapped in the years 2017-2020 when the ships need to be retrofitted to comply with the new regulations during their upcoming special surveys. That represents the majority of total identified overcapacities of the world merchant fleet.
Will tightening regulations provide a silver lining for the merchant shipping sector?
Published: January 2017