As 2010 draws to a close and many owners and operators brace themselves for what will inevitably be a very tough year ahead, reasons for ship repairers to be optimistic may not be immediately apparent. Deep economic uncertainty still prevails throughout large areas of the developed world. Global finance markets may no longer be teetering on the brink of collapse, but they are by no means rock solid. Shipping’s largest-ever fleet looks likely to be in oversupply for some time. And the pace of economic development in the so-called BRIC nations – Brazil, Russia, India and China – is so dramatic that long-established trade flows are being radically altered, with huge implications for global shipping.

Against this backdrop, the shipping industry’s principals – primarily its owners – must base investment decisions on the acquisition of expensive assets which are likely to last at least two decades, and possibly three. In times past, owners often received assistance in these decisions from charterers and cargo interests keen to secure the long-term supply of fairly priced shipping capacity. Such transactions are still evident on occasions, but tend to be the exception rather than the rule.

Faced with an extremely complex decision-making process, it is no surprise that shipowners – sometimes with the help of their bankers – get things wrong. Sentiment is very important and they often follow each other in the ordering of too many ships of one type, and not enough of another. They give in to bossy shipbuilders who wish to carry on building the same relatively inefficient ships as they have done for decades. Change costs money, they are told, but equally, no change costs money too … as the shipping industry is now discovering.

This forms the basis, as 2011 dawns, for three good reasons to be cheerful. One, shipping is in the environmental spotlight as never before. Climate change sceptics, particularly in the US, may continue to bury their heads in the sand, but shipping’s environmental pioneers are already recognising that change means opportunity – particularly in long-established ship design and operational parameters. In fact, it is spawning the design of a wide range of equipment and systems for retrofit – from exhaust gas scrubbers to ballast water treatment plants; from electronic hull gauge devices to remote condition monitoring systems; and from trim optimisation systems to the latest generation of hull coatings.

Two, this pursuit of new technology to make existing ships work more efficiently is being matched by leading owners and class societies. They are spearheading the introduction of new technologies which would have been written off as infeasible just a few years ago. Engine builders like MAN, Wärtsilä and Rolls-Royce are embracing new systems to make ships’ engines more fuel-efficient and less environmentally damaging. Meanwhile ferry operators, short-sea owners and offshore operators – particularly in northern Europe – are implementing these new technologies with alacrity. And they are receiving sound public support and, in the offshore sector, commendations from charterers too.

Which brings us neatly on to point three. As the quest for new supplies of energy becomes more pressing, oil and gas exploration inevitably moves into more difficult regions where conventional energy-handling systems are inadequate. Floating oil and gas technology, offshore wind power installations, together with the countless vessel types required to construct, service and maintain such systems is providing a potentially rich new revenue stream for those repair yards which a focus on these sectors. In fact, a shortage of suitable repair and maintenance expertise is already evident in some key offshore markets – notably Brazil.

So there may be some daunting challenges ahead for the shipping industry – as there invariably are – but there are also many exciting opportunities in store over the next year. Have a good one!

Republished by kind permission of: A&A Thorpe, 131a Furtherwick Canvey Island, Essex SS8 7AT Tel: +44 (0) 1268 511300 Fax: +44 (0) 1268 510467 shipaat@aol.com
The views of the Publishers do not necessarily correspond to the views of Lambos Maritime Services Ltd.