World shipbuilding capacity is still about 50% more than the level required to meet typical annual average demand despite the mothballing of 581 shipyards worldwide and a resulting 20% cut in construction capacity, according to shipping economist Martin Stopford.

Speaking to journalists in Hamburg three months prior to this year’s SMM 2016 exhibition staged in the German port city, the Clarkson Research non-executive President said that many of the closed yards were relatively small and still left 423 facilities with annual building capacity of about 100m dwt compared with typical demand of 65m dwt.

“Shipyards haven’t done enough yet,” he declared. However, at long last, shipowners had reined in new contracting. Contracts placed so far this year were running at levels not seen since the 1980s. Only 71 new ships were signed in the first quarter, according to industry statistics.

Stopford believes that despite weak shipping demand resulting from China’s slowdown and the generally poor performance of the global economy, shipping is poised on the edge of a technological breakthrough in which a digital revolution will transform traditional shipping operations. Likening the business to Formula One in which computers control many aspects of vehicle operation, Stopford said that smart technology will enable more cargo to be shipped more efficient and more safely.

Citing six elements in smart shipping’s “toolbox”, Stopford said new technology would enable the streamlining of maritime distribution systems and likened possible progress to that which is evident at companies including Uber (in which Saudi Arabia’s wealth fund has just invested $3.5bn), Amazon and UPS. Tools in the box, he said, included new satcoms such as Inmarsat’s high-throughput Ka-band services, telematics sensors, data storage, smart-phone apps, information systems and automation.

Stopford will be speaking at the gmec conference at SMM 2016 in September on “Big data – smart shipping and the environment”.