University of Moratuwa

M.Eng./PG Diploma in Highway & Traffic Engineering and

M.Sc. /PG Diploma in Transportation
Department of Civil Engineering

Cover Sheet for Assignment

Name with Initials: Group-A/

Student Registration No:

Title of Assignment: Tankers

Assignment No: Group Individual

Subject Code: 1. CE 6633

Subject: Freight Transport & Logistics

Dr.I Sigera
Lecturer:

Student’s Statement:
I certify that I have not plagiarized the work of others or participated in unauthorized
collusion when preparing this assignment.

Signature:………………….. Date:…………………….
Office use only:

On/ before deadline Extension Given Late Submission

Signature: ………………………….

Marks Given:
Contents
1. Ship Structure ................................................................................................................................... 1
1.1 What Are Oil Tankers? Type, Sizes, Working and Construction .......................................... 1
1.2 Design Characteristics of Oil Tankers ...................................................................................... 2
1.3 Ship Structure ............................................................................................................................. 2
1.4 Classification of Tankers Based on Their Size ......................................................................... 3
1.4.1 Regular Tankers................................................................................................................... 3
1.4.2 Panamax Tankers ................................................................................................................ 3
1.4.3 Aframax ................................................................................................................................ 3
1.4.4 Suezmax ................................................................................................................................ 3
1.4.5 VLCC .................................................................................................................................... 3
1.4.6 ULCC .................................................................................................................................... 3
2. Loading and Discharging Ports ....................................................................................................... 4
2.1 Loading & Discharging .............................................................................................................. 4
2.2 Loading ........................................................................................................................................ 4
2.3 Discharging .................................................................................................................................. 5
3. Types of Cargo .................................................................................................................................. 5
4. Trade Volumes .................................................................................................................................. 6
4.1 Global maritime trade ................................................................................................................ 6
4.2 Further growth is projected ....................................................................................................... 7
4.3 Trade tension ............................................................................................................................... 9
4.4 Oversupply of vessels despite decline in fleet growth .............................................................. 9
5. Future Potential and Challenges ................................................................................................... 11
 Tankers

1. Ship Structure

1.1 What Are Oil Tankers? Type, Sizes, Working and Construction

With the need to fill the supply and demand gap for oil and gas; came the monster we all humbly call
Oil tankers. An oil tanker or petroleum tanker is a large ship designed to transport refined and raw
petroleum.
With the recent introduction of tankers in shipping; it soon became a common norm to carry cargo in
bulk. It’s after the 19th century when we started to carry liquid cargo in bulk.
In recent times an oil tanker is referred to those tankers which carry liquid petroleum; whether crude or
in refined form. Since tankers are designed to transport cargo in bulk; oil tankers ensure a continuous
flow of oil to industries and your home.
Based on the type or grade of petroleum products it carries; oil tankers are divided into two main types
i.e. crude oil tanker and the product tanker. While crude oil tankers deal with a large sum of unrefined
petroleum; product tankers carry refined petroleum ready for consumption.
Also, with the ever-growing demand for black gold bigger and bigger tankers came into the picture.
They are from the smaller coastal tankers to the mammoth ship’s (Super Tankers) carrying 700,000
tons of liquid cargo.

Structure and Main Arrangement

1
 1.2 Design Characteristics of Oil Tankers

The specific design characteristics of oil tankers vary based on their size and type. But in general, all
tankers are somehow divided into three main zones; the cargo area, the fore, and an aft end. The fore-
end is responsible to cut through the water and ensure the ship’s stability through forepeak ballast tanks.
The aft end is where all the accommodation, bridge, pump, and engine room are located. It’s basically
the heart of the ship from which it is operated. The real deal is the cargo area where the oil is stored in
dedicated tanks. These dedicated tanks are further divided into mini subsections using bulkheads and
frames to prevent sloshing of fluids in cargo tanks. If remained unchecked they can dangerously affect
ship stability. For those who don’t understand what sloshing means; it's the movement of liquid from
one side to another under the influence of rolling and pitching. Cofferdams are provided in between the
cargo space and the engine room to isolate and protect against possible hazards.
These cofferdams run from top to bottom throughout the forward engine room bulkhead; thus, dividing
the ship’s structure into hazardous and non-hazardous zones.

1.3 Ship Structure

While small and medium-sized oil tankers use a combination of a longitudinal and transverse frame
structure. Large tankers are made of a longitudinal frame structure. In the system longitudinal frames
run across the entire length of the ship with intersection or support from transverse bulkheads. These
longitudinal frames provide protection to the ship’s bottom shell from buckling due to hogging and
sagging. Together with the side shell, bottom structure, keel, and deck plating they form the trunk. It’s
basically a raised structure that runs across the ships providing a designated role of an area such as cargo
space. The trunk basically consists of longitudinal frames, transverse bulkheads, brackets, side
frame/shell, sheer strake, stringers, longitudinal bulkhead, and deck plating. The brackets add up to the
stress bearing capacity of the ship by transferring stress on the side shell or frame to the bottom structure.
The stringers on the other hand help to improve the strength of transverse frames. This allows reducing
the depth and width of the frame needed thus adding up to cargo space.

2
1.4 Classification of Tankers Based on Their Size
An oil tanker can be of six major types based on its size and amount of cargo it can carry. The most
common type of oil tankers used today is the VLCC and ULCC types. In comparison, modern oil
tankers such as VLCC and ULCC are longer in length than aircraft carriers.

1.4.1 Regular Tankers

These are the ships that came under the small and mid-category of oil tankers with 10,000 to 60,000
tonnes of dead weight. They are usually tankers that run on coastal reason, load and unload cargo
from large tankers in case of shallow port or harbor.

1.4.2 Panamax Tankers

The largest oil tanker which can pass through the Panama Canal is known as Panamax. These ships
are most used as the product tanker carrying refined petroleum. Usually, these ships have a
deadweight of 55,000 to 80,000. One such ship can carry oil up to 500,000 barrels at a time.

1.4.3 Aframax
Not all ports can handle ships of very large size due to geographical and draft restrictions. This is
when ships like Aframax came handy. These ships with a deadweight of 70,000 to 120,000 tonnes
are used in the Mediterranean, black sea, the Caribbean, and china sea in between ports with not
too deep draft to handle larger ships.

1.4.4 Suezmax

Just like the Panamax the Suezmax is the largest size of vessel which can pass through the Suez
Canal. These ships carry both crude and refined petroleum and are of about 120,000 to 160,000
tonnes of dead weight. in layman terms it accounts for almost 1,000,000 barrels of oil carrying
capacity.

1.4.5 VLCC

The VLCC or Very Large Crude Carrier was first developed in the 1960s. This is the most used
oil tanker type in the shipping industry with 2, 50,000 tonnes of dead weight. These ships are
capable of carrying more than 2,000,000 barrels of oil in one voyage. These ships are mainly used
to transfer oil from gulf countries to the market in Europe and South Asia.

1.4.6 ULCC
The ULCC or Ultra Large Crude Carrier is the big mammoth ship that can carry a large amount of
oil from one place to another. These ships have a deadweight of between 320,000 to 500,000 tonnes.
Due to their very large size, these ships are restricted to ports with specialized terminals. The ship
operates between the gulf to North America and to the south china sea.

3
2. Loading and Discharging Ports

2.1 Loading & Discharging

At oil tanker, loading and discharging is done by means of pipelines connected to shore-based storage
tanks. Piping system is used for discharge operation of oil cargo from tank on the ship. Oil main ship’s
discharge to manifold usually situated amidships, on either port or starboard side. Shore-based loading
arms oil is transferred to the shore manifold and is then distributed to shore-based storage tanks on the
oil terminal. The loading arm hose must be flanged oil-tight to the ship’s manifold.

2.2 Loading

Oil is pumped on and off the ship by way of connections made at the cargo manifold.

Loading an oil tanker consists primarily of pumping cargo into the ship's tanks. As oil enters the tank,
the vapor inside the tank must be somehow expelled. There are two methods of expel the vapor & they
are depended on the local regulations,

I. Expelled into the atmosphere

II. Discharged back to the pumping station by way of a vapor recovery line

Procedure

· Loading starts slowly at a low pressure to ensure that equipment is working correctly and that
connections are secure.

· Then a steady pressure is achieved and held until the "topping-off" phase when the tanks are
nearly full. Topping off is a very dangerous time in handling oil, and the procedure is handled
particularly carefully. Tank-gauging equipment is used to tell the person in charge how much
space is left in the tank, and all tankers have at least two independent methods for tank-gauging.

4
 · As the tanker becomes full, crew members open and close valves to direct the flow of product
and maintain close communication with the pumping facility to decrease and finally stop the
flow of liquid.

2.3 Discharging

The process of moving oil off of a tanker is similar to loading, but has some key differences.

Procedure

· As in loading, the transfer starts at low pressure to ensure that equipment is working correctly
and that connections are secure.

· Then a steady pressure is achieved and held during the operation. While pumping, tank levels
are carefully watched and key locations, such as the connection at the cargo manifold and the
ship's pumproom are constantly monitored.

· Under the direction of the person in charge, crew members open and close valves to direct the
flow of product and maintain close communication with the receiving facility to decrease and
finally stop the flow of liquid.

3. Types of Cargo

Tankers or tanker vessels are designed to carry liquid cargoes in bulk. They are in almost any
size and their size is measured in cargo carrying capacity and the unit is either cubic meter or
metric tons (dwt). The majority of tanker vessels carry oil, chemicals, or gas. Some tankers are
built for very specialized cargoes and only carry one specific product: such as bitumen,
freshwater, commodities or wine, while other oil tankers carry many different types of liquid
products such as chemical and clean cargoes.

All tankers have tanks, pumps, and pipes. Some tankers can carry many different grades of
cargoes simultaneously and have several cargo tanks and a complicated pumping and piping
5
system to facilitate a separate handling process for each type of cargo, so cargoes are not
contaminated.

Tankers are further subdivided into different types on the basis of the cargo they carry. The
main types of tankers are:
Oil Tankers: Oil tankers mainly carry crude oil and its by-products.
Liquefied Gas Carriers: A gas carrier (or gas tanker) is a ship designed to transport LPG,
LNG or liquefied chemical gases in bulk.
Chemical and Product Carriers: A chemical tanker is a type of tanker ship designed to
transport chemicals and different liquid products in bulk
Other types of tankers: Some other types of tankers are fresh water, commodities, wine
tankers, integrated tug barges etc.

4. Trade Volumes

4.1 Global maritime trade

Reflecting developments in the world economy and trade activity, international maritime trade lost
momentum in 2018. Volumes expanded at 2.7 per cent in 2018, down from 4.1 per cent in 2017. A
range of downside risks that had intensified in 2018 contributed to the slowdown in maritime trade
growth (Table 1.1). Trade tensions and protectionism topped the list, followed by the decision by the
United Kingdom of Great Britain and Northern Ireland to leave the European Union (“Brexit”); the
economic transition in China; geopolitical turmoil; and supply-side disruptions, such as those occurring
in the oil sector. Country-specific developments, including recessions in some emerging economies,
weakness in industrial sectors across many regions, a slowdown in China and weaker import demand
in both developed and developing countries, also hindered growth. Despite the setbacks, a milestone
was reached in 2018, with total volumes amounting to 11 billion tons.

Region or country 1994-2008 2017 2018a 2019b

World 3.3 3.1 3.0 2.3
Developed
2.6 2.3 2.2 1.6
countries
of which:
United States 3.2 2.2 2.9 2.2
European Union
2.5 2.5 2.0 1.3
(28)
Japan 1.1 1.9 0.8 0.8
Developing
5.1 4.4 4.2 3.5
countries
of which:
Africa 4.6 2.6 2.8 2.8
East Asia 8.1 6.2 5.9 5.4
6
 of which:
China 9.7 6.9 6.6 6.1
South Asia 5.7 6.3 6.0 4.1
of which:
India 6.6 6.9 7.4 6.0
South-East Asia 4.2 5.2 5.0 4.5
Western Asia 4.3 2.8 2.3 0.7
Latin American
2.9 1.0 0.8 0.2
and the Caribbean
of which:
Brazil 2.9 1.1 1.1 0.6
Transition
4.1 2.1 2.8 1.1
economies
of which:
a
Russian Federation 3.9 1.6 2.3 0.5 Partly estimated
Least developed
6.0 4.3 4.4 4.6 b
countries Forecast

World Maritime Economic Growth 2017 – 2019 (Annual percentage changes)

World Maritime Economic Growth 2017 – 2019 (Annual percentage changes)

4.2 Further growth is projected

UNCTAD expects international maritime trade to expand at an average annual growth rate of 3.5
per cent over the 2019–2024 period. However, uncertainty remains an overriding theme in the
current maritime transport environment, with risks tilted to the downside. In addition to heightened

7
 trade tensions between China and the United States of America, growth in maritime trade is also
being affected by developments in market segments that suffered some setbacks earlier in 2019.
Crude oil shipments from the Atlantic basin to Asia are expected to support tanker trade volumes,
while sanctions affecting the Islamic Republic of Iran and the Bolivarian Republic of Venezuela,
as well as effective compliance with production cuts imposed by the Organization of the Petroleum
Exporting Countries, are likely to put further pressure on tanker trade. Some positive developments
in the offing may help offset current pressure on maritime trade. These include the Belt and Road
Initiative of China, new bilateral and regional trade agreements, and potential opportunities
stemming from the global energy transition, such as the growing gas trade
Development in intranational Tanker trade, Selected years
Tanker Total
Year
Trade (all cargoes)
1970 1440 2605
1980 1871 3704
1990 1755 4008
2000 2163 5984
2005 2422 7109
2006 2698 7702
2007 2747 8036
2008 2742 8231
2009 2641 7857
2010 2752 8408
2011 2785 8775
2012 2840 9195
2013 2828 9513
2014 2825 9842
2015 2932 10023
2016 3058 10295
2017 3146 10716
2018 3194 11005

8
 4.3 Trade tension
Tariff escalation between China and the United States dominated the headlines in 2018 and early 2019.
Nearly 2 per cent of world maritime trade volume is estimated to be affected by tariff hikes applied in
September 2018 and May and June 2019. Exposure varies by cargo type and market segment. In
addition to reducing trade flows, tariffs are generating winners and losers, given product and supplier
substitution and trade diversion effects.

4.4 Oversupply of vessels despite decline in fleet growth

Oversupply remained a prominent characteristic of most shipping segments. In early 2019, total world
fleet capacity stood at 1.97 billion dead-weight tons (dwt), equivalent to 2.61 per cent growth – the
slowest growth of the decade. Gas carriers experienced the highest growth (7.25 per cent during the 12
months to January 2019), mainly due to significant expansion in the liquefied natural gas sector. This
trend can be expected to continue in view of mounting environmental concerns and pressure on the
maritime sector to switch to cleaner fuels. Bulk carriers recorded the highest level of ship deliveries,
representing 26.7 per cent of total gross tonnage built in 2018, followed by oil tankers (25 per cent),
container ships (23.5 per cent) and gas carriers (13 per cent). Since 2014, there has been a trend towards
an increased number of container-ship and gas-carrier new buildings, compared with the number of new
buildings of oil tankers and dry bulk carriers, which has decreased. less demand for oil tankers and bulk
carriers as a result of the existing oversupply in those segments. In 2018, China, Japan and the Republic
of Korea maintained their traditional leadership in global shipbuilding, representing together 90 per
cent of all shipbuilding activity. China alone accounted for 40 per cent of the activity, while Japan and
the Republic of Korea boasted shares of 25 per cent each. To cope with declining orders, the
shipbuilding sector has been undergoing reforms and has witnessed consolidation and increased
government support.
In 2018, most of the tonnage sold for demolition were oil tankers from Bangladesh, India, Pakistan and
Turkey. Traditionally, China, India and Turkey have headed the list but their market shares decreased
9
in 2018. Recent regulatory developments and voluntary initiatives of industry to make ship recycling
safer and more environmentally friendly may explain these trends.

Tanker trade, 2017 – 2018 (Million tons and annual percentage change)
Percentage
change
2017 -
2017 2018 2018
Crude Oil 1874.6 1886.2 0.6
Other tanker trade 1271.6 1308.1 2.9
of which
Liquid nature gas 292 318 8.9
Liquefied petroleum
90 97 7.8
gas
Total tanker trade 3146.2 3194.3 1.5

Major producers and consumers of oil and natural gas, 2018

World Oil Production % World Oil Consumption %

Western Asia 33 Asia and the Pacific 36
North America 22 North America 23
Transition Economics 15 Europe 15
Developing America 9 Western Asia 9
Africa 9 Developing America 9
Asia and the Pacific 8 Transition Economics 4
Europe 4 Africa 4
Oil Refinery
Oil Refinery Capacities
Throughput
Asia and the Pacific 35 Asia and the Pacific 36
North America 21 North America 22
Europe 15 Europe 15
Western Asia 11 Western Asia 11
Transition Economics 8 Transition Economics 8
Developing America 8 Developing America 5
Africa 2 Africa 3
World Natural Gas World Natural Gas
Production Consumption
North America 26 North America 24
Transition Economics 22 Asia and the Pacific 21
Western Asia 18 Transition Economics 16
Asia and the Pacific 16 Western Asia 16
Europe 6 Europe 12
Developing America 6 Developing America 7
Africa 6 Africa 1

10
5. Future Potential and Challenges

The oil tanker segment appears to have more challenges than upside potential in the future. The US
Energy Information Administration (eia.gov) predicts renewables to become the leading source of
energy by 2050 (“International Energy Outlook 2020”).

Further, according to a recent article by British Petroleum, 56% of global oil demand (of 95 Mb/d)
comes from the transport sector. 20% or a fifth of the global demand is from cars (Dale and Smith,
2016).

The car industry is undergoing rapid changes in terms of energy consumption. The global electric
vehicle (EV) demand is soaring and the cars are tipped to be the frontrunner in the EV transformation.
Though trucks account for more fuel usage (24%), trucks have higher demand on the power levels and
the range of travel, therefore, electrification of trucks is expected to lag considerably.

A study by Bloomberg New Energy Finance (BNEF) forecasts that electric cars will cost the same as
the fossil-fuel powered counterparts by 2022, causing the EV sales to take off (Randall, n.d.).

11
Currently, the EV market is growing at a staggering 60% per annum. In the unlikely scenario
of this trend continuing, the EV demand can displace a total oil demand of 2 Mb/d, triggering
a major crisis for the oil market. A more conservating estimate of 30% annual growth by BNEF
(Randall, n.d.) predicts this trigger point to occur by 2028. Bottom line is, several scenarios
predict a significant impact to the global oil demand from cars within the next decade, 2021-
2030.

Given this

possible future of rapidly falling demand for crude oil in the next few decades, the derived
demand for tanker shipments can have sharp declines too. A 2019 study by the Maritime
Strategies International (MSI, UK) predicts that the crude oil tanker demand may drop by 34%,
whilst the oil product tanker demand can decline by 38% by 2050 (MSI, 2019).
12
Source: (MSI, 2019)

In addition to the potentially crippling scenario posed by the decline in demand for crude oil, the tanker
ships need to address the following trends in the shipping industry in general.

● Technology adoption – use of technologies such as blockchain to implement services such

as e-documents required for ship operations to cut down costs as well as to face pandemic
situations such as COVID 19.
● Sustainable shipping – increasing environment pressures and regulations are forcing ship
builders and owners to practice more environment friendly shipping
● Autonomous ships – the industry is researching the introduction of fully autonomous ships
that may be controlled remotely to save on crew costs and also to avoid risking humans on
dangerous sea journeys.
● Vertical integrations – shipping lines are increasingly looking for vertical integrations with
ports and landside cargo operators to diversify operations and also to provide end-to-end
transport solutions to customers

13
6. References
Dale, Spencer, and Thomas D. Smith. “Back to the Future: Electric Vehicles and Oil

Demand | News and Insights | Home.” BP Global, 6 Dec. 2016,

www.bp.com/en/global/corporate/news-and-insights/speeches/back-to-the-future-

electric-vehicles-and-oil-demand.html. Accessed 27 Nov. 2020.

“International Energy Outlook 2020.” Eia.Gov, 2020, www.eia.gov/outlooks/ieo/.

Accessed 27 Nov. 2020.

Maritime Optima https://www.maritimeoptima.com/blogdata/different-type-and-

sizes-of-tanker-vessels

MSI. “Carbon Carriers.” Maritime Strategies International Ltd, 17 July 2019,

msiltd.blog/2019/07/17/carbon-carriers/. Accessed 27 Nov. 2020.

Randall, Tom. “Here’s How Electric Cars Will Cause the Next Oil Crisis - Institute of

Energy of South East Europe.” IENE.Eu, www.iene.eu/heres-how-electric-cars-will-

cause-the-next-oil-crisis-p3240.html. Accessed 27 Nov. 2020.

14