I started writing about shipping in 1980 when I joined The Motor Ship magazine as a junior reporter. As that publication marks its centenary this year, I have been reflecting on how things have changed in the marine publishing world over my career.
For one thing, I was part of a team of 10, most of us with industry experience, plus two secretaries. We produced a monthly magazine – anything less than 100 pages was a small issue – numerous supplements, a weekly newsletter and an annual directory. And we did it without using correspondents or freelancers: if an international report was in the programme, we went there and what little seatime I have was mostly accumulated during sea trials I attended for The Motor Ship.
That staff roster included a full-time statistician whose job was to produce monthly contracts and deliveries lists, research a quarterly Ships on Order supplement and prepare annual league tables of engine manufacturers’ market shares, based on the installed power in ships delivered during a calendar year. For many years, this was done without the aid of a computerised database.
Every engine maker waited for those tables with keen anticipation and one company sent a representative to our offices each year to spend a day with our statistician to make sure we had recorded each of their engine contracts. Although other manufacturers did not go to that expense, they had an obvious incentive to keep us up to date about their engine orders – and thus of the related ships – so I believe The Motor Ship’s database was better than most – perhaps all – other newbuilding data sources at that time.
In the two-stroke segment, the market was dominated by the then newly-formed MAN B&W (now MAN Energy Solutions and part of the Volkswagen group) and Sulzer, which is now the CSSC-owned WinGD. Mitsubishi had and has a loyal following for its low-speed engines, but its share of the market has always been small compared to those two leaders.
This interests me at the moment because the emergence of LNG as a viable marine fuel is disturbing the balance between the two leading players. It has changed the landscape because it has opened up a significant difference between the two companies’ technologies. MAN Energy Solutions’ dual-fuel ME-GI engines – announced in 2011 – require an injection pressure of about 300 bar and its advantages over low-pressure engines are set out on its website.
Two years later, WinGD announced its X-DF engines, which use the Otto, rather than the Diesel, cycle, allowing them to run with an injection pressure of no more than 13 bar. Its advantages are set out on its website and it seems to be attractive to LNG carrier designers who find it simpler to introduce boil-off gas to the fuel supply in a low-pressure system.
Since then, WinGD’s data suggests, its market share in the LNG carrier newbuilding sector has soared. According to a graph based on data from Clarksons Research and supplied to me for this article (but which I may not reproduce), out of 183 LNG carriers of 40,000m3 and above ordered from 2012 onwards with two-stroke dual-fuel propulsion, 116 (63%) of them have been specified with WinGD engines. In 2019, the proportion was 90%.
However, the graph’s message is confused because it is based on the number of ships ordered rather than on installed power, which would provide a better reflection of market dominance. Without knowing the installed power for each of the 183 vessels covered by the analysis, it is impossible to say with certainty how the two manufacturers compare in this sector and the percentage figures I have mentioned certainly cannot be viewed as a barometer of their relative positions across the rest of the two-stroke market.
On top of that, the graph is not even a complete picture of the LNG-fuelled segment. Because it only covers LNG carriers it does not include a number of significant projects, such as TOTE’s LNG-fuelled container ships, ordered in 2012 with MAN Energy Solutions engines. Nor does it take account of AET’s LNG-fuelled tankers: its aframaxes ordered in 2017 and its VLCCs, which were announced in April this year, all of which have WinGD engines.
A little historical information about the leading players’ total two-stroke market shares can be gleaned from past Wärtsilä annual reports from the years when it was a 30% shareholder in WinGD. They are based on installed power and were not offered in every annual report, but here are some snapshots: 2009 (13% of the two-stroke market); 2010 (22%); 2011 (no figure offered); 2012 (“remained stable at 18%”); 2013 (10%); both 2014 and 2015 (“approximately 10%”).
There are no figures in subsequent reports since Wärtsilä sold its share of WinGD in 2016 and I cannot find any assessments of market share for any year on either WinGD’s or MAN Energy Solutions’ websites.
So I approached both of them to ask for their own assessments of their current market shares in the two-stroke segment and the communications manager at MAN Energy Solutions told me that its share has been “above 70% for the past five years” but he could not offer any further detail. Despite that high number, however, “we are humble and fight for every order in what is a strongly competitive field,” he said.
Volkmar Galke, WinGD’s global director of sales, told me yesterday (23 June) that its market share in 2019 – again, taken from Clarksons Research data – was 36%, based on MW ordered during the year. This represents a huge uplift from the figures that Wärtsilä was reporting just a few years ago and I cannot reconcile why the current figures I have been given by the two leading players total more than 100% of the market.
Given all that background, you will understand why I took an interest in last week’s announcement by WinGD of its latest technology upgrade: version 2.0 of its X-DF engines. This adds a new technology to the engine, called Intelligent Control by Exhaust Recycling, which the company says will dramatically reduce methane slip. That was one of the criticisms levelled by MAN Energy Solutions at low-pressure technology in the article I referred to above and may be a factor that yards and owners take into account in choosing their engine.
I attended a webinar last week at which Volkmar and two other WinGD boffins explained the new development and when it came to the Q&A I asked what impact it was expected to have on the company’s share of the two-stroke market. Volkmar said then that he hoped it would have a positive impact as more LNG-fuelled ships are ordered and when I spoke to him again yesterday he hoped it would “stabilise” its current share.
His colleague Marcel Ott, general manager of its Chinese operations pointed out during the webinar that “the competitor” is developing a low-pressure engine because “it is very obvious that this technology has a large potential in the market.”
He was referring, of course, to MAN Energy Solutions’ ME-GA engine project that was announced in May 2019, when its senior vice-president and head of two-stroke business Bjarne Foldager said that when development is complete in the first half of 2022, “the low-pressure engine will fill a gap within our portfolio.”
He also said that its ME-GI engine “has become the de-facto industry standard.” You might think that claim is contradicted by WinGD’s figures for the LNG carrier segment which, even by removing its 2019 sales from the equation, show that it could claim by the time of MAN Energy Solutions’ announcement to have won a majority of LNG carriers – a major market for dual-fuel engines. But Mr Foldager would have been including all ship types with LNG fuelling and probably basing his assessment on installed power rather than a simple ship-count, so there is no direct comparison between the two assessments.
With that difference in approach in mind, you can understand my wish for some independent and consistent data about this.
I am looking forward to the ME-GA’s arrival. Competition is always good, both for innovation and for business and if LNG is going to become a major – perhaps dominant – fuel on the journey towards lower emissions, then it will be engines such as those being developed by these two designers that will drive us towards that finishing line.
Yet although it is only a two-horse race, it is impossible for those of us in the stands to see their steeds jockeying for position. I believe many customers would like to know whether they are backing a winner and will share my hope for better data about this. But I am not counting on it.
• Do you know of an independent source of engine market share data? Where do you stand on the high vs low pressure LNG fuel debate? Email me now with your views.