Universal Ship Measurement

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IMSF 2011 Annual Meeting Colin Cridland, Managing Director Analysts Hong Kong, 1 June 2011 www.clarksons.com Universal Ship Measurement | IMSF 2011 Annual Meeting

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Clarksons Offices

B F C D G

A I N Map K A Houston J M B London/Regional UK offices C Geneva D Genoa E Oslo L F Hamburg G Piraeus H Johannesburg I Cairo J Dubai/CIS Dubai K New Delhi H R L Singapore O M Hong Kong Q N Shanghai P O Perth P Melbourne Q Sydney R Brisbane

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Background

● First raised by IMSF Chairman, John Dowden

● Challenge to examine the existing units of measuring ships and ask:

● Are these accurate, representative and logical for measuring all types of ships? ● Do these allow meaningful comparisons between different types and classes of ship?

● If existing measurements do NOT meet the challenge what new ‘Universal’ measure or measures could be employed?

● A perfect challenge for the IMSF!

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Where Would it be Useful?

● Comparing shipbuilding output/capacity by vessel type

● Comparing national flag and ownership fleets

● A means by which dues, taxes, levies etc might be more fairly applied across ship types

● A basis by which an economic value might be more accurately applied to national fleets

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Existing Universal Measures

● Deadweight (dwt) ● Max cargo in tonnes plus fuel, stores etc up to specific load line ● Weakness ● Load Lines can be changed ● Badly represents vessels with low density cargoes – Container, wood chip, passengers, vehicles etc ● Gross Tonnage (GT) ● A measure of enclosed spaces in cu ft divided by 100 and called tons ● Weakness ● Inconsistently measured between class soc ● Badly represents vessels with high proportion of cargo out of enclosed spaces – container ● Net Tonnage (NT) ● Derived from GT using complicated ‘black art’ formula to exclude certain enclosed spaces ● Weakness – Nobody understands what it means ● Compensated Gross Tonnage (CGT) ● Derived from GT by applying varying factors according to vessel type ● Weakness – assumes construction effort varies between vessel types on a consistent basis and yard productivity is constant

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CGT Coefficients – Old System

Tanker Fleet Bulk Fleet 2.0 1.85 2.0 1.8 1.8 1.60 1.30 1.5 1.5 1.10 1.3 0.85 1.3 1.0 0.70 1.0 0.70 0.60 0.8 0.55 0.40 0.8 0.50 0.40 0.5 0.35 0.30 0.5 0.30 0.3 0.3 0.0 0.0

<4,000 <4,000 4 - 10,000 160,000 + 4 - 10,000 250,000 + 10 - 30,00030 - 50,00050 - 80,000 10 - 30,00030 - 50,00050 - 80,000 80 - 160,000 80 - 160,000 160 - 250,000 Container Ship Fleet 2.0 1.85 1.8 1.5 1.2 1.3 0.9 0.8 1.0 0.75 0.65 0.8 0.5 0.3 0.0

<4,000 50,000+ 4 - 10,000 Data source: Clarksons 10 - 20,000 20 - 30,000 30 - 50,000

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New CGT System Formula (Version 2007)

Ship Type A B Compensated Gross Tonnage Oil Tanker (D/H) 48 0.57 = Chemical Tankers 84 0.55 A*GT^B Bulk Carriers 29 0.61 Combined Carriers 33 0.62 General Cargo 27 0.64 Reefers 27 0.68 Full Container 19 0.68 ● Previous system was based on CGT RoRo Vessels 32 0.63 coefficients, depending on type and Car Carriers 15 0.7 dwt of ships LPG carriers 62 0.57 LNG 32 0.68 ● New calculation is based on formula. Ferries 20 0.71 Passenger Ships 49 0.67 ● Instead of dwt as base for the choice Fishing Ships 24 0.71 of the coefficients, the system is NCCV 46 0.62 based on gross tonnage.

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CGT Comparison of the two systems

Tankers Dry Bulk old cgt new cgt old cgt new cgt 50,000 35,000 47,824 30,000 40,000 44,328 30,694 25,000 27,263 30,000 20,000 20,000 15,000 10,000 10,000 16,618 14,971 5,000 6,117 7,357 0 0 VLCC Handy Capesize Handysize Container ships

old cgt new cgt 60,000 50,000 59,514 40,000 44,948 30,000 20,000 10,000 16,578 16,366 0 Data source: Clarksons Super Post-Pmax Large Feeder

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Capacity

STRONG ARGUMENT TO HAVE UNIVERSAL CARGO CAPACITY MEASURE

● Typical existing cargo capacity measures ● Grain (m3) – 100% ● Bale (m3) – 100% ● Ore (m3) – 100% ● Liquid (m3) – 98% ● Liquefied Gas (m3) – 98% ● TEU/FEU (no of) ● Insulated capacity (ft3) ● Lane Metres (m) ● Passengers (no of) ● Berths (no of) ● Vehicles (no of) ● IMPORTANT vessels with more than one of the above can refer to EITHER exclusive OR non- exclusive spaces

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Introducing Total Cargo Capacity (TCC) ©

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Calculating TCC©

ALL VESSELS 1,000 dwt plus – EXISTING and ON ORDER Tankers (all types) Bulkers (all types) General Cargo (all types inc reefer) Containerships Liquefied Gas (all types, all sizes)

● Methodology ● Convert all TEU capacity to m3 by multiplying by 38.14m3 ● Use largest capacity (grain, bale, ore, liquid, liquid gas or TEU derived) ● Work out the ratio between dwt and largest m3 for individual ships (vast majority) ● Apply the average dwt/m3 ratio to calculate m3 capacity where it was missing

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Comparing TCC© to dwt/GT

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Existing Fleet Comparisons

Gross Tonnage Deadweight

4% 3%3% 6% Bulk

38% 44% Container 32% 36%

Tanker TCC© 20% 14% Gas 4%3%

35% General 28% Cargo

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Orderbook Comparisons

Gross Tonnage Deadweight

2%2% 1%2% Bulk 24% 27% Container 55% 59% Tanker 17% 11% TCC© Gas

1%2% General 21% Cargo

49%

27% © Colin Cridland

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Top 5 Flags - Existing Fleet

GT DWT TCC© 23.3% 22.6% 22.6%

13.6% 12.6% 12.3%

7.5% 7.7% 6.9% 7.2% 7.1% 7.0% 5.5% 5.0% 5.1%

PAN LIB M I HK SPORE PAN LIB M I HK GRC PAN LIB M I HK SPORE © Colin Cridland 1 June 2011 www.clarksons.com Universal Ship Measurement | IMSF 2011 Annual Meeting

Top 5 Flags – Fleet on Order

GT DWT TCC© 23.6% 23.0% 21.3%

14.6% 13.6% 13.0%

10.3% 9.7% 9.6% 8.9% 8.7% 8.6% 8.2% 8.3% 8.3%

PAN LIB CHN GRC HK PAN LIB CHN GRC HK PAN LIB CHN GRC HK

Top 5 Builder Countries - Existing Fleet

GT DWT TCC© 37.3% 35.6% 35.1% 33.4% 33.6% 32.5%

15.3% 16.0% 15.1%

2.8% 3.7% 1.8% 2.3% 1.8% 2.1%

JAP SK CHN GER TWN JAP SK CHN GER TWN SK JAP CHN GER TWN

Top 5 Builder Countries - Orderbook

GT DWT TCC© 42.3% 40.9% 39.3% 38.7%

35.0% 32.7%

16.0% 16.7% 13.9%

2.7% 3.0% 2.9% 1.2% 1.1% 1.0%

CHN S K JAP PHIL BRZ CHN S K JAP PHIL BRZ CHN S K JAP PHIL TWN

Introducing Hull Square (m2)©

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Introducing Hull Square (m2)©

HULL SQUARE (m2)

= maximum length of vessel (m) x maximum beam of vessel (m)

PROPOSED PRIMARILY AS A MEANS OF MEASURING SHIPBUILDING OUTPUT/CAPACITY

Logic – ● a major determining factor in shipyard output is the square area of the building dock ● WHY not therefore measure orderbook in (m2) ?

Hull Square© – Vessel Types

Existing Orderbook

37.0% 55.0%

30.0%

21.0%

23.0%

16.0%

7.0% 5.0% 4.0% 1.0%

BULK TANK CONT GEN GAS BULK TANK CONT GEN GAS © Colin Cridland 1 June 2011 www.clarksons.com Universal Ship Measurement | IMSF 2011 Annual Meeting

Existing Orderbook

36.0% 42.0%

29.0% 32.0%

16.0% 16.0%

4.0% 2.0% 3.0% 1.0%

JAP SK CHN GER TWN CHN SK JAP PHIL BRZ © Colin Cridland 1 June 2011 www.clarksons.com Universal Ship Measurement | IMSF 2011 Annual Meeting

Existing Fleet Orderbook 25.0 22.5 20.0 17.5

2 15.0 12.5

million m million 10.0 7.5 5.0 2.5

0.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Ore Carrier 242,424 400,000 153,347 23,530

Bulk Carrier 293,683 259,587 129,325 17,742

Tanker 490,505 441,585 234,006 25,840

Container 686,520 165,000 156,616 23,600

Gas 267,335 152,600 163,922 18,579

General Cargo 83,908 37,000 26,000 5,306

Top 5 builders in orderbook

GT DWT

6.60% 6.40% 6.30% 5.7% 5.7% 5.3% 4.10% 4.3% 3.10% 3.5%

5.6% 5.4% 5.1% 7.9% 7.7% 7.3% 3.5% 2.7% 3.8% 3.7%

HHI STX HHI STX Daewoo Jiangsu Samsung Daewoo Samsung

Concluding Remarks

TCC© is a far more representative measure for comparing the capacities of vessels across types than either dwt or GT. Reflects better the importance of containerships

Hull Square© is a more representative measure of shipbuilding output, capacity and therefore of orderbook than dwt, GT or CGT.

TCC© would be a useful tool in progressing towards a universal economic ship measure by applying a factor representing say ship value, cargo value or freight

TCC© could be extended to non TEU deck cargo vessels by applying square area of deck multiplied by square root of square area. Passenger vessels might be more challenging in deciding which areas should be included as a accommodating the cargo only (i.e. passengers)

Either TCC© or Hull Square© or a combination of the two might be used as a measure of a more universal mechanism by which port charges might be levied and compared

Thank You Discussion PLEASE

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