AGE is increasingly just a number in European shortsea shipping.
General cargoships smaller than 10,000 dwt are part of the backbone of European trade, but a combination of factors keep them on the water far longer than is typical for bigger ships.
There are about 1,000 gearless coasters in the 2,600-4,500 dwt range with an average age of 26.3 years, and 560 vessels are older than that, according to Rotterdam-based Sea3R, a provider of market intelligence for the niche trades.
The 630 ships in the 4,501-5,750 dwt bracket are an average of 22.5 years old, with 253 older than that.
“Between 20 and 40, we have a huge amount of ships,” Sea3R managing director Peter Molloy said.
The Netherlands is the top shipbuilder represented for both of these size brackets. Germany is still in the top 10, and it hasn’t built such a ship in 25 years, Molloy added.
The average age does not fall to a more spritely 11.6 years until the 7,501-9,500 dwt range. But many of the younger ships in this segment are built in Russia and unable to trade openly with the West.
Why so old? Molloy said the issue for owners was finance. Values fall, banks don’t want to lend to refinance the ship, building costs are high, and payback periods long.
“They start getting squeezed from every end, and as a result, the fleet just keeps ageing,” Molloy said.
The EU has faced calls to broaden its Emissions Trading System to include ships smaller than 5,000 gt.
Molloy said if it does, “the reality is you’re just going to push most of the freight rates up, because there aren’t enough young ships to come in and actually operate”.
This raises questions about how Europe will build its way out of the problem, and about the need for retrofits.
The orderbook for the biggest European shortsea market (3,600 dwt) is 7%, or 68 vessels. For the 8,500 dwt bracket, the 79 ships on order represent a third of the fleet, because said fleet has only 263 ships.
Ships too old for northwestern Europe are sold into the Black Sea, and possibly then to Africa and the Caribbean, instead of being scrapped. But the cost of transferring such a ship can be more than it’s worth, keeping more ships working longer at home.
Demolitions are rare. “On average, we get maybe one demolition in each sector every two years or so, and it’s usually 35 to 40 years old,” Molloy said.
With a thin orderbook and a stubbornly long tail of elderly ships, Europe’s shortsea sector is left facing a renewal challenge that is only getting harder to ignore.
