14 December 2018: One of the challenges in the container shipping industry is the need to reposition empty containers (“empties”) as a result of global trade imbalances. For example, there are twice as many containers moving from Asia to the United States than vice versa, so more than half the slots of containerships leaving the U.S. are for empties, especially for major container ports such as Los Angeles. In the tanker market, this problem is even more pronounced, in particular for crude oil carriers. The bigger the ship, the bigger the problem. Aframaxes and Suezmaxes typically have more opportunities to cut ballast legs and triangulate than VLCCs. The relentless shift of crude oil movements from the Atlantic to the Pacific Basin has increased the imbalances over time. One of the areas where this “problem” manifests itself is the U.S. Gulf. And the recent OPEC decision to cut production and reduce (VLCC) shipments to the U.S. could make this situation worse, but help the VLCC market at the same time.
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