The Maritime and Port Authority of Singapore (MPA) revealed its plans to grant a 10 per cent concession on port dues for bulk carriers with effect from 15 April 2016 as a countermeasure to the current downturn in the industry.
This concession will be applicable if the vessels are carrying out cargo works with a port stay of not more than five days and will be in place for one year, MPA said.
This latest move follows MPA’s announcement in January of an additional 10 per cent concession on port dues granted to container vessels that carry out cargo works with a port stay of not more than five days. The concession was on top of existing port dues concessions such as the Green Port Programme incentives and the 20 per cent concession first introduced in 1996.
Taken together with the existing concessions including those granted to offshore support vessels and container vessels, the MPA projects that these concessions are expected to yield S$18 million (USD 13 million) in savings for shipping companies over one year.
“The roll out of these measures demonstrates Singapore’s commitment to help the maritime sector through this challenging time, and its importance in contributing to our economy and creating good jobs for Singaporeans,” the MPA noted.
In terms of annual average fleet employment rates, the dry bulk market has now dropped to levels last seen over 20 years ago in 1992, according to the latest quarterly dry bulk market forecast from Maritime Strategies International (MSI), with timecharter rates much worse now (USD 5,700/day for a Panamax) than they were then (USD 9,500/day).
The spot market is in even worse condition: according to a MSI theoretical voyage cost calculation across a representative sample, almost a fifth of aggregate earnings for Capesize vessels on the spot market would have been negative this year to date, taking into account individual vessel fuel consumption characteristics.
A minor rate correction is expected in Q2, driven by a seasonal uptick in iron ore imports by China and strong South American grains exports. However, it is not until 2018 before any sustained improvement in market balances can be anticipated.