The global bulker fleet is experiencing a significant slowdown, driven by aging vessels, stricter emissions regulations, and shifting market dynamics, according to Veson Nautical’s latest report, “Why is the bulker fleet slowing down? The impact of an aging fleet in the era of efficiency,” released on February 25.
The report highlights a decline in average speeds, creating a two-tier market where modern, efficient vessels dominate profitable routes, while older, less efficient ships are relegated to niche markets.
Veson Nautical’s analysis indicates that older bulk carriers, particularly those built before the Energy Efficiency Design Index (EEDI) criteria were enforced in 2013, have reduced speeds noticeably compared to newer vessels, contributing to the fleet-wide slowdown.
“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,” said Oliver Kirkham, senior valuation analyst at Veson Nautical.
The report notes that modern bulkers, designed with improved fuel efficiency and compliance with green regulations, offer commercial advantages, commanding premiums in markets like the U.S. and Europe, which impose strict age restrictions and carbon rules.
The slowdown aligns with the International Maritime Organization’s (IMO) Carbon Intensity Indicator (CII) and Energy Efficiency Existing Ship Index (EEXI) regulations, mandatory since January 2023, requiring vessels to calculate technical energy efficiency and report CII ratings based on fuel consumption, speed, and distance.
For older vessels, installing engine power limitation (EPL) tools has been the most cost-effective way to comply, resulting in slower speeds and a 2.5% reduction in estimated carbon emissions—5 million tonnes—since 2021, despite increased distances traveled, as per Veson’s October 2024 research.
Veson’s data indicates 99% of active bulk carriers operate on single-fuel engines, minimizing dual-fuel impact on emissions, but aging fleets—averaging 13.2 years for tankers in 2024, - face higher maintenance costs and regulatory penalties, pushing owners toward modern vessels or scrapping, with demolition rates rising to 12 million DWT in 2020, up 4.2 million DWT from 2019.
Market dynamics, including China’s renewable energy surge (12% growth in 2024) and a predicted 10% fall in coal trade volumes by 2025, per the International Energy Agency, further shape the bulker sector, reducing demand for older, less efficient ships.
Veson’s 2025 outlook anticipates a continued two-tier market, with modern bulkers dominating high-value routes and aging vessels facing tighter margins, potentially shrinking the global fleet’s active capacity below 2% growth in 2025, per industry estimates.
Veson Nautical is a Boston-based maritime data and freight management solutions provider, established in 1998, specializing in market intelligence, vessel valuation, and regulatory compliance tools for the shipping industry.