The average size of vessels delivered into the fleet has increased considerably in recent years, and could reach a record level in 2017. Whilst economies of scale are generally the key long-term consideration behind the trend towards larger ships, the development of upsizing in the main sectors has been driven by a wider range of factors, and has taken place at very different speeds.
Building A Bigger Fleet
The upsizing of vessels has remained a fairly consistent theme in shipping throughout its modern history, and the last twenty years has been no exception. In 1996 the average size of a vessel delivered from shipyards was 38,000 dwt. In contrast, the average size of vessels scheduled for delivery in 2017 currently stands at 70,000 dwt. In general, the trend towards larger vessels has been driven by economies of scale: bigger ships typically cost less to operate and fuel per tonne of goods transported, if owners are able to utilise the extra capacity. However, the pace of upsizing has differed greatly between sectors.
The average size of bulkcarrier deliveries (10,000+ dwt) was 66,000 dwt in 1996, and is expected to reach 82,000 dwt in 2016, after taking scheduled output into account. This steady increase has predominantly been driven by upsizing within vessel sizes, rather than movement between them. From 1996 to 2013 the average size of a Capesize delivery increased from 165,000 dwt to 214,000 dwt, driven by VLOCs and other larger Capesize designs. Similarly, in the Panamax sector, the average size of vessels increased from 72,000 dwt in 1996 to 82,000 dwt last year, with Kamsarmaxes accounting for around half of deliveries.
In the tanker sector, there has been no clear long-term trend towards upsizing in recent years, but the size of deliveries has been far more volatile. The average size of tanker deliveries (10,000+ dwt) fell as low as 69,000 dwt in 2008 before reaching 118,000 dwt in 2012. In contrast to the bulkcarrier sector, changes in the average size of tanker deliveries have generally been driven by the product mix. Crude tankers tend to push up the average size of vessels, while the reverse is true for product tankers: in 2012 crude vessels represented 43% of deliveries, compared to just 17% in 2008.
Boxships Making Gains
Upsizing has been most dramatic in the boxship sector, where owners have looked to exploit economies of scale using ever-larger vessels. Between 1996 and 2015, the average size of containership deliveries increased by 244% in dwt terms. The largest vessels delivered last year were boxships of 19,224 TEU, compared to a maximum size of 7,403 TEU for boxships delivered in 1996.
Across the main sectors, the drivers behind upsizing have varied greatly in the last twenty years. There are signs that the trend towards larger vessels could slow, with boxship owners in particular now appearing to find it a challenge to efficiently utilise the largest ships. Despite this, upsizing has taken place at an impressive speed, and the average size of vessels delivered from shipyards in 2017 is expected to reach a record level.