18 July 2016 Asia Japan
World Shipbuilding Crisis Spreads To Japan
Orders for new ships from Japanese shipbuilding orders plummet, shipbuilders fear future empty berths in two to three years.

(Picture: Empty berths feared as slump continues)
Figures issued the Japanese Ship Exporters Association show that orders, compared historically, have all but dried up by June with only 4 ships ordered last month.

In the period January to June 2015 ships totalling over 10 million gross tons were ordered, in the same period for this year, 2016, that figure has shrunk to 2 million grt.

Comparing June itself of last year, the figures are starker. 98 vessels totalling 4,671,040 grt were ordered then, in June this year that was slashed unbelievably to only 4 ships measuring just 162,700 grt. The figure for June of 2015 was a spike in itself, but overall the pattern is flat or downward leaving the possibility that when current orders are completed, shipyards are looking at miles of empty berths.

This is because shipping companies are experiencing difficulties due to weakening demand and slower Chinese growth whilst world fleets have grown so large they have outstripped what demand there is. Some of Japan's major shipping firms have posted huge losses and in the current climate, new orders look less and less likely to fill in those empty berths ahead.

Simply put, world shipbuilding is now catching up with the realities of a world with too many ships chasing less and less trade and prospects look unlikely to change until the 2020s, according to some analysts, when the world fleets are reduced due to natural wastage coupled with any expected or hoped for upturns in world trade.

The UK's decision to leave Europe has also not helped matters, and although the impacts are relatively small so far, many fear it will add to the current problems and lengthen any recovery.

The shipbuilding slump in Japan follows that crisis in shipyards in South Korea and China and has shook many shipbuilders to the core. Japan has not seen a decline like this since the period following crash of 2008.