Non-delivery of vessels may hit highest level this year

There are indications that the non-delivery of vessels on the order book, which has been a prominent theme in ships building in the last decade may hit the highest level this year amid troubled shipping markets.

According to a new Clarksons Research, the total non-delivery increased significantly with the onset of the financial crisis, from eight per cent in dead weight tonne (dwt) terms in 2007 to 33 percent in 2009. In the year to date, this figure has reached 41 per cent, and 2016 seems likely to set a new record.

This record, according to Clerckson is based on the difference between scheduled deliveries from the start year order book and actual deliveries,

Generally, it said the uptick in non-delivery over the past two years has been driven by an increase in market risk across the major sectors amid depressed markets.

“In the bulk carrier sector weak earnings have persisted through 2016, causing non-delivery to rise to 50 per cent in dwt terms in the year to date, up from 42per cent in 2015. Although tanker non-delivery has fallen from 32 per cent last year to 23 per cent in 2016 so far, due in part to firm earnings in the first half of the year.

“The biggest change has been in the box ship sector, where non-delivery has risen from 13 per cent in 2015 to 39 per cent, following a sharp decline in rates across most ship sizes.

“In the year to date, changes to the market environment have been important across all of the major sectors, and this increased market risk looks set to drive non-delivery to record levels in full year 2016,” it stated.

Weak markets have also added to owner risk, with many owners negotiating delays to the delivery of vessels, particularly bulk carriers.