Laying Up Ships – An Increasing Trend In The Current Shipping Scenario


Dr-R.-Vis-CEO-of-Viswa-Lab1.jpgThanks to multiple factors headed by the fall in demand of China for commodities, the shipping industry particularly the bulk carriers and container vessels are getting hit to unprecedented levels.  There are bankruptcies galore as well as many companies are either scrapping the dry bulk vessels or idling them.  How are the ships idled and what is the cost of idling? These are some important information that will be useful.


1. How many methods of layup are available?

There are 3 main methods of layup namely cold, warm and hot.  As the name suggests, the hot ones (up to 3 months) can be commissioned in a very short time (as short as 24 hours), warm (up to 12 months) can be recommissioned in about a week and cold (up to 5 years) layup takes 3 weeks to 4 weeks for recommissioning.

2. What is the cost of the layup?

The layup cost may vary from $15,000 to $22,000 per month.

3. How many dry bulk ships are now laid up?

According to some brokers about 700 ships have been laid up (Feb 2016).  These brokers estimate that at least 1,400 vessels have to be laid up before the demand and capacity are matched.  On 10 February 2016 the Baltic Dry Index reached the historic low of 290.  It was 4,661 in 2009 and as high as 11,793 in 2008.  New Cape size vessels are commanding a charter rate of $3,000 per day while the owners need $6,000 and, with financing costs $12,000 per day to break even.

Mercator shipping, an India based bulk carrier operator sold 67% including 6 dry bulk ships to 3 Singapore investment companies for a token $1.

4. Who are the companies offering Layup services?

GAC, Wilhelmsen and many others offer this service.  The most popular countries for layups are Singapore, Indonesia, Malaysia, Sri Lanka and China.

5. What are the instructions for layup?

Do not hesitate to contact Viswa Lab for Lay Up Instructions.  We would be happy to guide you.



Viswa Lab


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