New, Old Vessel Speed Disparity Splits Bulker Fleet

The global bulker fleet is facing a significant slowdown, driven by a combination of factors that are not only causing a decline in average speeds but also setting the stage for the emergence of a two-tier market, according to Veson Nautical.

A new report: ‘Why is the bulker fleet slowing down? The impact of an aging fleet in the era of efficiency’ says that aging vessels, stricter emissions regulations, and evolving market dynamics are all factors in the lower average speeds being witnessed.

The report cites data that suggests that older vessels, particularly those built before the Energy Efficiency Design Index (EEDI) criteria were enforced in 2013, have seen a noticeable decrease in speeds relative to newer vessels and that this is the single most significant contributory factor to the slowdown of the global bulker fleet. 

“We can conclude that a surplus of older, inefficient vessels in the fleet, which are now penalized by efficiency regulations for sailing at higher speeds, are a driving factor in declining average speed overall,” says report author Oliver Kirkham, Senior Valuation Analyst at Veson Nautical. “However, the decline in average speeds is not just a matter of operational efficiency; it’s a sign of a deeper shift in the bulker market, where modern, compliant vessels are set to command a premium as older ships struggle to keep pace."

The report adds that the massive expansion of the bulker fleet during the mid-2000s, spurred by China’s economic growth, has left a large portion of the fleet increasingly inefficient. These vessels are now struggling to meet modern efficiency standards, creating a growing divide between newer, more efficient vessels and older ships nearing the end of their operational lives.