Hellas: The Shipping Fleet Grew in Both Size and Age During 2022
The Greek-owned fleet grew in size during 2022, but as newbuilding deliveries dwindled, so did its age. In fact the average age now stands at its highest point of the last decade. In the latest report, published from Petrofin Research, is noted a relatively small increase in the tonnage of the Greek fleet by 3%. In absolute numbers, the fleet has gone up by 286 units of all types and sizes. This has as a result a reduction in the average size of vessel and an increase in the fleet’s age by slightly more than a year.All vessel type and size tonnage grew by 2.8% whereas the number of these vessels went up to 6,409 from 6,123. Consequently, the average size went down to 72.5 thousand tons DWT. Age also went up to 14.1 years, something that we had not seen since 2014. The story here could be that Greek owners showed a preference for second hand tonnage, as decisions for newbuildings are not being taken easily in view of the yet undecided new technologies that will lead the fleet to zero emissions by 2050
The number of Greek companies went down to 599, reversing the slow rise of the last 3 years. In 2021 there were 607 Greek companies up from a low of 588 in 2018 but down from an all time high in 1998. The overall consolidation trend continues.
In terms of the size of the companies, the number of 25+ vessel companies continued to rise to 56 in 2022, up from 54 in 2021 (Graph 3), marking the highest number ever. Tonnage wise they are up by 18.17m tons DWT from 2021.
Over 1m ton owners went down by 4 to 78, compared to 82 in 2021, to 80 in 2020, 81 in 2019. Their percentage of the fleet is also slightly down to 78.3% compared to 79% in 2021. The 80% share of the ton millionaires continues to represent a significant barrier.
The number of companies running very young fleets (0-9 years of age) continues its downward trend, this time below 100 to 99, back in the levels of 2008-2009. This reflects the scepticism belying the ordering of newbuildings which results in the rise of the average fleet age.
The rise in age that began in 2018 continues. The total age of the whole of the Greek fleet in 2022 was 14.1, compared to 13 in 2021, 13.2 in 2020, 12.2 in 2019 and 12.08 in 2018. As explained above, we note the slowdown of a) newbuilding deliveries, b) the acquisition of market based tonnage and c) reduced scrapping.
The continuous growth of the Greek fleet is reflected in the latest figures and this trend is expected to continue.
The Greek fleet of all types and sizes of vessels went up by 286 vessels in 2022. Of these, 185 vessels of all types were over 20,000 tons DWT. These vessels represented an increase of 12.2m tons DWT. They are also run by less companies than 2021, 402 down from 406 companies in 2021.
The Dry bulk fleet (vessels over 20,000 DWT – Graph 6) gained 97 units, significantly less than the 183 vessels added in 2021 which had followed the loss of 21 vessels during 2020. This is a versatile market that responds quickly to market conditions.
After the sharp growth with the addition of 60 vessels in 2021, 2022 was quite stable with the addition of only 2 Containers to the the large Container fleet (vessels over 20,000 DWT – Graph 7). The Container market moved cautiously during 2022.
The large Tanker fleet (vessels over 20,000 DWT – Graph 8) showed small growth with the additions of 5 units. The relative stability in the rise of the tanker fleet age, shows some significant internal reshuffle of the fleet, which kept the fleet’s age at 10.23 years, almost similar to 2021.
The LNG fleet has remained the same.
Large LPGs continue their steady growth, not so much in tonnage terms, but in as much as in selling older and buying younger units.
All vessel type and size tonnage grew by 2.8% whereas the number of these vessels went up to 6,409 from 6,123. Consequently, the average size went down to 72.5 thousand tons DWT. Age also went up to 14.1 years, something that we had not seen since 2014. The story here could be that Greek owners showed a preference for second hand tonnage, as decisions for newbuildings are not being taken easily in view of the yet undecided new technologies that will lead the fleet to zero emissions by 2050
In its analysis, Petrofin Research said that “in 2022, the Greek fleet grew but, as had been forecasted, at a slower pace of 2.8% in DWT terms or a rise of 286 vessels. There was also a noticeable slowdown in S&P activity and scrap sales. As a result, the age of the fleet increased by 1.1 year. The numbers of Greek companies continue to hover around the 600 mark. This number is affected by economies of scale and the state of the market as well as scrapping / sales of older fleets but also by new players emerging with the ability to grow.
It is noteworthy that the smaller fleet sizes have shown the biggest decline in numbers as opposed to the medium to largest fleets which continued to grow. The top 70 Greek fleets now account for over 75% of the total whilst the number of fleets of over 1m DWT account for 78% of the total.
For over 20,000 DWT sized vessels, we note that Dry bulk saw increase in the total DWT, in the number of vessels and in the number of companies engaged in the sector, but a modest rise in the age of the fleet. The Container sector was flat in terms of numbers with an average age rise too.
The same was the case with Tankers except that this sector’s average fleet age did not show a rise.
The LNG sector continued to show progress and signs of consolidation with modest rises in the number of vessels and total DWT, but a fall in the number of operating companies. The fleet’s age also rose but still stood at a very low level of 5.7 years.
The LPG sector also displayed modest growth in the number of vessels, total DWT and a fall in the average age down to 7.15 years.
Interestingly, the number of fleets with an average age of 0-9 years old continued to fall from a peak of 189 in 2015 to 99 last year. This is to be expected as the overall Greek fleet is older but the main cause is probably due to the slowdown in newbuilding deliveries and the decline of the order book from its peak of 2015. The trend clearly shows that during 2022, most owners remained in doubt whether to invest in existing technology or await for new technology designs. The Greek orderbook as of the first half of 2023 has gone down by 20%, however, dual fuel vessels stand at a significant 34% of the total orderbook. In terms of type of vessel preference, LNG and tankers stand at the top especially with the big owners such as Angelicoussis Group and Marinakis (Nor-Shipping 2023 – Tradewinds), but the trend of being cautious at investing in new technology remains.
The way forward
Greek shipping is at the limb of the energy transition. The impact of the emissions regulations on vessel selection, ordering, emission saving devices, dual fuel and technological progress is weighing heavily on owners’ decisions. There is also no visible new technology in the horizon that can lead the industry to zero emissions soon.
In the presence of so much uncertainty and constraints coupled by geopolitical tensions and sanctions, impaired trade flows, slow seaborne trade, assymetrically high vessel prices compared to prevailing freights and high interest rates, it is not unusual for Greek owners to have taken a breather in 2022 in their investment decisions. The only exception was in dry bulk whose fortunes weakened as the year progressed.
The gravity and impact of the emissions regulations are now felt to be more imminent and stronger. Lenders as well, have expressed their preferences and keenness on eco / dual fuel vessels. In the second-hand market, activity has waned although there has been a trend of divesting by Greek owners in Tankers and replacing them with Dry bulk.
Overall, it is anticipated that in the next couple of years the Greek fleet may record some contraction. It is expected, though, that a recovery might resume when newbuilding deliveries and net S&P purchases rise in 2024/25”, Petrofin concluded.
Source: Petrofin Research
