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2021 in review: Disruption upside and surging ClarkSea


After showing admirable resilience in 2020, shipping markets performed remarkably last year as trade volume recovery, widespread congestion and modest fleet supply growth contributed to a 93% increase in our cross-segment ClarkSea Index ($28,700/day). This cash influx also supported record S&P transaction levels (145m dwt, $46bn) and the highest newbuild order volumes since 2014 (120m dwt, $107bn).

After strengthening each quarter over the year, the ClarkSea averaged an impressive $28,700/day, its highest annual level since 2008 (10 yr avg: $13,697). The exceptional container market led the way with charter rates up 260% y-o-y to five times pre-Covid-19 levels. Overall dry bulk rates were up 185% to their highest levels for over a decade, with smaller sizes, helped by good growth in minor bulks and grains, performing particularly well (“Supras” up 210%). There were also good gains for LNG charter rates (boosted by another winter “spike”, up 50% y-o-y), Car Carrier (up 103%) and Ro Ro (up 20%). After many years of recession, the offshore oil and gas market also improved and the outlook is cautiously optimistic. After benefiting from “floating storage” in 2020 however, tanker earnings fell by 71% y-o-y, with particular “pain” for VLCCs.


Robust volume recovery

The trade recovery begun in late 2020 continued, with overall volumes reaching pre-Covid-19 levels by mid-year and our full year estimate reaching 12.0bn tonnes (up 3.6% y-o-y). Progress was again uneven: container, dry bulk and gas trade have come back strongly but oil trade recovery has been modest and volumes still remain 8% down on pre-Covid levels. Despite a risk “watch list” (e.g. Chinese “cooling” policies, inflation, tax increases, fiscal spending unwind), we are projecting trade will reach an encouraging 12.4bn tonnes in 2022 (up 3.5%). Disruption to global logistics and supply chains was widespread across 2021, helping “tighten” markets particularly in the container (Container Congestion Index peaked at 37.5% compared to pre-Covid averages of 31.3%), dry bulk and car carrier markets. While some form of normalisation will come eventually, our sense is this will take time to “unwind” fully.


Modest supply growth

Below trend fleet growth continued (2.9% by dwt vs 4.1% ten yr avg, with slightly lower growth projected for 2022) to take the fleet to 2.2bn dwt, with both overall demolition (24.3m dwt, with a 334% increase in tanker volumes) and shipbuilding output levels fairly steady (86m dwt). Shipyards were busy taking new orders, although investment was skewed towards container ($42bn) and gas ($21.6bn), and the orderbook edged up to a “manageable” 9.4% (by dwt) of the fleet (tankers (7.3%) and bulkers (7.0%) are lower than container (23%) and gas). Newbuild prices were generally up a third over the year (although large containership pricing was up 50%) and outside of container (a 15 yr old 5,100 teu was up a staggering 350%), Ultramax saw the biggest asset value gain (up 69% on modern tonnage). Scrap prices rose 40%. The focus on “Green & Tech” in post-Covid planning intensified, with decarbonisation “front and centre” of boardroom discussion across maritime. With increased activity, shipping’s CO₂ footprint edged up to 2.4% of global emissions but with developments at IMO and the EU amongst others, the regulatory and policy framework is evolving while 34% of newbuild orders (by GT) were alternative fuelled. After another remarkable and challenging year for shipping - best wishes and Happy New Year!


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The author of this feature article is Stephen Gordon. Any views or opinions presented are solely those of the author and do not necessarily represent those of the Clarksons group.