Opinion divided on fleet expansion
Daily Fairplay News
12 Jun 2008
OPINION is in the Republic is divided on the effects the current season of high bunker prices will potentially bring to bear on fleet modernization.
Comments by shipping executives follow remarks by Lim Heng Tay, chief executive officer of the Maritime Port Authority (MPA) during a preview of the launch of Sea-Asia 2009, to be held next April. Noting that cargo growth had remained ‘intact’, Lim added: “the shipping industry had been preparing for it (bunker price increases)”. A bunker surcharge is viewed as giving a hedge against rising prices. Its effects on fleet expansion actually depends on cargo demand. “It will not deter an operator from expanding his fleet. If demand is still there, he will go for investment optimisation”, said an executive from U-Ming Marine Transport. Also agreeing was Alvin Yu-Dong Cheng, CEO of PST Management who said: “Higher bunker prices could eventually stimulate newbuilding of more fuel efficient vessels”. But an executive from K Line believes that fleet sizes have the potential to be ‘compromised’ by high bunker prices. And according to Capt Victor Wee KP of GBLT Shipmanagement, the long-term implications of prolonged bunker price increases are worrying. “What is point of maintaining a fleet, when bunker prices begin eating into our profits?” he wonders.
