The Funding Gap

How large exactly is the funding gap? Many numbers have been thrown out in the media and this week, we have an estimate from Nordea. George Whist, Head of Shipping and Oil Services – Asia, pointed out that the global orderbook has doubled between 2007 and 2009 and is worth at least USD 350 billion as of 2009, based on his calculations. The demand for capital has never been higher and owners are predominantly from Asia and Europe. In terms of DWT, number of vessels or number of owners, all indicators show that European and Asian owners control in the region of 80% of the world fleet.

Analyzing the supply side of the equation with data from Marine Money, he observed that shipping banks have increased their loan exposure to shipping from USD 187 billion to a staggering USD 346 billion between 2006 and 2008. European banks have been ramping up their balance sheets with shipping debt, not just for the European owners but also for those in Asia. “Banks who are interested in shipping deals have halved and it is not fair to expect the European banks to fund the world’s ships. We need to get a balance. We need to get more money working from Asian banks,” he said.

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