By nature dedicated to deep-sea traffic, these ships have been replaced by containerships, usually geared, on many services. However, they are still deployed on certain routes where the demand seems especially buoyant, providing ideal conditions for their owners or operators. The US MarAd and the Military Sealift Command have strongly supported this very narrow market by acquiring a large number of units over the last few years in order to recondition them according to specifications better suited to their needs. They have constituted an imposing reserve fleet, necessary for military maneuvers and deployments. Of some 80 existing ships in this category, 35 are now under the control of the US Navy. Consequently, and despite the replacement of some large ships by containerships, the market had to deal with a genuine shortage in these sizes, particularly at the beginning of the year. In contrast, and in the absence of new factors, it is quite probable that this situation will be reversed in the first months of 1999, helped by the arrival of large numbers of PCTCs and PCCs currently on order. At the end of 1998, the orderbook for PCCs and PCTCs still represented some 15% of the existing capacity. There is a real interaction between these markets, since the largest shipping lines chartered large ro-ro ships instead of car and heavy rolling stock carriers, pending the deliveries of newbuild ships. Note however that these con-ro type carriers are no longer at all fashionable, having too little "rolling" capacity, and, often rendered obsolete by a severely depressed containership market, they cannot provide an alternative to the most modern ships.

Wilhelmsen Lines, with Grimaldi and NYK, was once again among the most active in this sector. Wallenius surprisingly chartered the last two ships that CGM was still operating on its round-the-world service, the "CGM Racine" and the "CGM Rimbaud" (5,200 lane meters, 20 knots), for one year. This marked the disengagement, this time total, of CGM from this transport concept. Messina, for its part, strengthened its containership fleet, letting the "Alyona" (5,200 lane meters, 18 knots) go for a period of one year to Wilhelmsen, only too happy to be able to add a sister ship to the other two already on charter for 3-year periods. The genuine interest shown in the four "Kapitan Smirnov" class ships (20,000 dwt, 5,500 lane meters) is quite revealing about the trend observed in this market. These ships, capable of nearly 25 knots, which slipped through almost unnoticed two years ago, finally found work with the largest operators in the market, despite their very high fuel consumption.

On services of the West African coast, it is interesting to note that Delmas has strengthened its fleet by chartering the "Rosa Blanca" and the "Rosa Tucano" (3,500 lane meters) for a period of 5 years each, proof that in this region also the ro-ro concept seems to have plenty of life still left in it. There remains a lot of rolling cargo loaded on MAFI trailers, and ro-ro ships combined with pure containerships enable shipowners to offer their customers better-quality service. Elsewhere, OTAL and Nile Dutch extended the ships already on charter, while Grimaldi had to compromise in order to optimize the phasing into service of its new ships.

As far as new orders are concerned, and as if to mark more strongly its upcoming entry into the new millennium, Wilhelmsen concluded a contract with the Korean shipyard Daewoo at the beginning of the year involving three ships of a new design, similar to its most recent ship, the "Taronga" (40,000 to 45,000 dwt), optimizing the loading combinations for large quantities of heavy machinery and cars. The reported price of US$80 million per unit proves, if proof were needed, that the freight rates obtained for targeted cargoes bear no relation to those of containerships of equivalent container carrying capacity, but which cost half as much to build.

Just-in-time and trailer transport

Here, we discuss the area of the market in which new generation ships attracted interest from a large number of operators. In geographical terms, these ships are deployed mainly in Northern Europe, the Baltic Sea and the Mediterranean basin. Demand remained very firm throughout the year, enabling the shipowners to obtain good rates and relatively long charter periods. Remember that the large majority of these ships fall within the size range 2,200 to 2,600 lane meters and the speed range 20 to 24 knots.

This sector was the scene of several notable maneuvers between some of the principal shipowners. The merging of the cross-Channel activities of P&O and Stena, announced in the middle of the year, seemed to correspond, as in other sectors, to a need for rationalization of their respective services, but also to the double preoccupation of obtaining economies of scale in terms of operation and reaching a critical size to better preserve the continuity of each of the groups. The Danish group DFDS showed an incredible level of activity throughout the year through the Tor Line subsidiary, accepting delivery of three new units built in Italy. After having already bought the "Boracay" (2,200 lane meters) from Fred Olsen, DFDS was slated to buy the line activity of Fred Olsen, together with two other ships, which when consolidated now gives it control of the majority of services linking Scandinavia to the rest of Europe. This announcement was all the more surprising in that, a few months previously, Fred Olsen had reinforced its services with the arrival of two new 2,600-lane-meter ships, sold on to the Spanish company Trasmed one month before the acquisition of the group by DFDS.

Following this Trasmed, which had remained relatively discreet until then, and probably motivated by government subsidy proposals, took another step by buying two more new units from Stena. Furthermore, this acquisition program is probably not yet completed, and it will be interesting to monitor any developments in 1999. The trend initiated more than two years ago towards the operation of larger and faster ships has continued, with the long-term commitment taken by North Sea Ferries with the Finnish shipowner Bore involving two new 2,600-lane-meter ships. In a fairly similar scheme, Finncarriers concluded an agreement with the Swedish Owner Nordic Forest, on four new ships built in China (1,900 lane meters, 19 knots) chartered for a period of 5 years.

In the Mediterranean, the Turkish company EGE surprisingly chartered the two new ships of the Italian Owner Visentini (a conventional ro-ro of 2,500 lane meters and a con-ro carrier of 2,300 lane meters) for 24 months. These two ships will be deployed, like the previous ones, on the service linking Turkey to Italy. Its competitors UND have focused on the possible acquisition of new units. These two factors are particularly revealing about the constant increase in traffic in this region, which has now lasted for about 5 years.

In any case, and parallel to the trend already observed in containerized traffic, the speed criteria is becoming increasingly dominant on these routes. For reasons of efficient scheduling, smaller ships nevertheless capable of meeting delivery deadlines consistent with the other ships in operation will often be preferred. In this respect, we mentioned last year our conviction that ships capable of 30 knots and more would arrive; some yards have developed such designs this year, while some owners such as Grimaldi are also thinking of attaining such speeds with car carrier ships. It is worth wagering that it will not be necessary to wait much longer for these projects to materialize. The slump in crude oil prices, if it lasts, should further encourage the building of ships of this type, which will inevitably have higher consumption.

The construction of the European Union will without contest be a driving force in the growth of intra-European trade, and the existing flows will probably increase. The Europe-wide organization of truck driver strikes and the desire of Brussels politicians to take action in favor of reducing highway congestion and fighting pollution are all factors that should enable the opening of new just-in-time shipping links. These could per-haps form the basis for genuine "shipping highways" which would then provide strong support for this market segment.

Dolores - 13,480 dwt, 2,350 lm, blt 1992,  chartered to Unishipping

Small and medium-size ro-ro ships

We would be tempted to add an element to this brief description, since the large majority of the ships that were available for charter were rarely capable of good speeds, and consequently were of interest to few charterers. In this category we can place ships with capacities of up to about 100 trailers, and a speed of 16 knots can still be considered the threshold above which the ships begin to attract interest on the market. In geographical terms, there are not really any visible areas of growth in these sizes. Conversely, the severe crisis in the Russian economy at the end of the summer dealt a heavy blow to trade with many countries on the links in the Baltic Sea, and yet more so in the Black Sea, where Turkish shi powners seem to have been the hardest hit. The effect of this situation was to make a large number of ships available immediately, which this market sector could have done without.

Activity remained relatively moderate in the Caribbean and in the Western Mediterranean and once again consisted mainly of charter extensions, in the absence of alternative tonnage. In fact, in these regions, where many lines are operated at speeds of 16 to 18 knots and over distances that are often longer than in North Europe, new-generation ships are too expensive to operate. However, as we have previously reported, very few ships of intermediate size and speed (1,200 to 1,800 lane meters, 17 to 19 knots) have been built recently. As a consequence, some operators were waiting for the "ideal" ship to become available. But often they were not able to put into effect this willingness to charter, because the only units available were practically all judged to be too slow or to have too limited a capacity.

Fortunately the French domestic market shows signs of expansion, through the dynamism of several operators and shipowners. First, Viking bought the "Nebhana" and the "Mejerda" from Cotunav for subsequent operation on a new service in the West Indies. At the end of the year, the owner Delom chartered a ship (1,100 lane meters, 17 knots) from Estonian Shipping and assigned it to its service to Tunisia. At the same time its "Cap Afrique" was going to be deployed on a newly-established line between Dunkirk and Ramsgate. Sudcargos for its part is continuing to expand its activities from the South of France, Italy and Spain to Algeria, and at the end of the year was examining various means of modernizing its fleet operating to Tunisia and Morocco. Gulf Stream Roro, after having abandoned its Lorient-Casablanca service, could re-launch it in 1999 in association with Marfret, using the "Françoise", which should be joined by another ship of the same size. On the other side of the Atlantic, but still under French control, at the beginning of the year Unishipping launched a service between Mobile and Tuxpan in Mexico with the "Dolores" (2,200 lane meters, 15 knots), which seems to be crowned with success. The same company has also launched a Mexican coastal shipping service, operating two smaller ships (35 and 50 trailers) in association with a local operator.

In conclusion, we would like to emphasize once again the great stability of rates in this market, all sizes combined. Of course here and there a few disparities can be observed from one year to another, but these do not allow a genuine upward or downward trend to be identified. Some containership Owners are now thinking of converting optional orders into ro-ro ships, and this type of behaviour, should it be put into practice, could have the merit of helping to renew the fleet in the sizes that obviously need it. However, given the low volatility of this market, much restraint and moderate numbers will be necessary to avoid excess optimism pushing some to cut the branch on which others are already sitting.d In

Again in 1998 this market segment was very active, with firm prices for the "good" ships, since potential buyers did not have several candidates to choose between given the narrowness of this market.

In the middle of the year Stena bought the "American Falcon" and the "American Condor", 3,200 lane meters, 18 knots, built in 1981, for about $33-35 million and subsequently chartered them to Tor Line. At the end of December we learned that, as they were perfectly suited to their line, Tor Line had been able to persuade Stena to sell them these ships for an as-yet undisclosed price.

Such investments prove that for this type of ship age is not an insurmountable handicap, if their technical condition allows them to operate until they are 30 years old. In the category of more recent ships, Stena, once again one of the only owners able to offer ro-ros without passenger accommodation, agreed a block sale of two of its Stena 4 runner class ships (2,700 lane meters, 22 knots) to Trasmed for a reported price of $104 million. It seems that these two units are the ones that last year had been reported sold to UND (Turkey), but that the sale had been canceled because of the delay in the building of the ships.

To these two ro-ro ships Trasmed added the "Brabant" and the "Bayard", built in 1998, 2,600 lane meters, which were bought for a reported en bloc price of $98 million.

To illustrate what we have stated previously about the importance of speed, it should be noted that the two 4,000-lane-meter ro-ro ships "Saudi Qasim" and "Saudi Hail", built in 1980-1981, and having a service speed of only 15 knots, are still available for sale. In fact, MarAd has not confirmed the employment that would have allowed their en bloc sale at a reported $21 million.

Prices remained firm in this segment also, and even "old" ships with good characteristics succeeded in fetching good prices. The shipowners were probably fed up with having to regularly extend the charters of these vessels at rates offering no reason for downward revision.

• The "Boracay", 2,000 lane meters, built in 1978, approximately 17 knots, was thus sold for $12 million to DFDS. As a reminder, similar ships only obtained comparable prices in 1994.
• The "Vega", 1,700 lane meters, built in 1978, 16 knots, was sold for $11 million to Cobelfret.
• The "Villars", 1,200 lane meters, 16 knots, was sold for $6.1 million for subsequent conversion to a cable layer.

Ro-ro ships with car decks benefited from a market in which the demand was very strong and difficult to cover. So:

• the "Fleur de lys", 1,300 lane meters, 1,000 cars, was sold for $7.2 million to Spanish interests;
• the "Belvaux", 1,200 lane meters, 500 cars, built in 1979, was sold to Ugland for $4.1 million, a price comparable to that obtained by her sister ship in 1992.

- Ships of less than 1,000 lane meters

If there is one category in which shipowners have few reasons for being delighted about, it is that of small ro-ro ships. On one hand few ships in this category offer the required speed, and on the other their small size means that there is only a small margin between their operating cost and their time-charter rate to amortize any acquisition.

So it was only at the cost of sacrificial terms of sale that a few transactions were concluded in a market lacking flexibility and where demand is rare.

For example, a ship with a capacity of 60 trailers, built at the end of the 1970s, was negotiated in the region of $2.5-3 million. an