Shipbuilding and Repair

Routine work grows with fleet size


Malcolm Latarche
Malcolm Latarche
ShipInsight

14 May 2019

Routine work grows with fleet size

If shipbuilders are facing a hard time due to falling orders, the same cannot be said for the ship repair sector. In most of the past 10 years, new deliveries have outweighed retirements and scrappings so that the world fleet is consistently increasing. That alone would tend to suggest that emergency repairs and one-off jobs would increase, although shipping has improved its safety record and so it might be expected that the rate of casualties should decrease.

The main factor in the improving environment for ship repair facilities is the increase in the world fleet and the fact that all ships with some minor exceptions are obliged to undergo special surveys every five years and intermediate surveys at some point in between. These scheduled drydockings, which usually take around 14 days, are the mainstay of the ship repair yards’ work and income.

In the run up to the crash of 2008 and for some three or four years after, ship deliveries were running at double the long-term average with some 1,500-2,000 ‘extra’ ships being built. Even allowing for some deletions from the world fleet over those years, it can be estimated that there should be around 3,000 extra work-weeks for ship repair yards resulting from fleet growth alone.

Another factor that should be borne in mind is that the newer deliveries were generally much larger ships than those being scrapped. A larger vessel generally requires more in the way of drydock work, especially in areas such as surface preparation and coating applications.

Drydocking is the routine work of ship repair yards, but there are other revenue streams as well. Safety in shipping may have improved since the advent of the ISM Code and accidents reduced, but it would be a miracle if they were eliminated altogether.

Groundings, minor collisions and more dramatic incidents continue to occur and require emergency repairs. At the end of March, around 350 vessels were out of action due to an incident of some form or another.

Most of these incidents never make headlines but fires – such as those that occurred on the container ships APL Vancouver and Yantian Express early in 2019 – do gain international attention. A report in March this year by the TT Club suggested that a major fire occurs on a container ship every 60 days but most of these do not become widely known about. Both of the container vessels mentioned are presently undergoing repairs, as is another fire casualty, the car carrier Sincerity Ace on which the fire started on 31 December 2018. Five crew died in that fire and the vessel was abandoned by the crew before assistance arrived. Also included in the figures are the LNG carrier Aseem which collided with the anchored VLCC Shinyo Ocean in Fujairah in late March.

Conversions on the up

One of the other revenue streams is conversions but usually there are far fewer of these taking place at any given time. A snapshot of ships in drydock at the end of March 2019 revealed that there were 44 vessels undergoing a conversion of some sort. Conversions take many forms, from changing ship type, altering a vessel’s size or changing engines or other equipment and systems.

Tankers and gas carriers have been regular candidates for conversion for many years. In the past, some of the conversions were from tankers to bulkers but after the loss of the Stellar Daisy, that change has been discredited. However, conversions into floating offshore storage units is still practised with around half a dozen taking place at the moment.

Altering ships’ dimensions, or ‘jumboisation’, is a well-established practice for passenger and cargo ships. At present, two of the APL 14,000teu container ships acquired by CMA CGM during the 2017 takeover are undergoing lengthening to 17,000teu vessels. APL Fullerton and APL Singapura are the last in a series of five similar conversions that were contracted in December 2017. The APL conversions involve the insertion of a 29m hull section equivalent to two 40ft bays, which would lengthen the vessels from around 365m to just under 400m. The APL ship conversion contract included five options which have yet to be declared. MSC has contracted for similar conversions.

The current passenger ship conversions include a €60M contract signed by Grimaldi with Fincantieri to lengthen the 2008-built ro-paxes Cruise Roma and Cruise Barcelona with new 30m hull sections. The additional length will allow for 500 extra seats,50 new cabins and cargo space for 50 trailers and 50 cars. Batteries will also be installed to allow for zero-emission operation in port.. Another ro-pax due for battery installation this year is Stena Line’s Stena Jutlandica.

Battery installations have been increasing in number for some years now and are becoming widely accepted for several ship types, but ferries and cruise ships seem to be accounting for most retrofit installations. In part, this is because it addresses improving the environmental image of the sector but is also a reaction to likely future regulation in areas such as Norwegian fjords and Arctic seas. Norway has already proposed that cruising in the Heritage Fjords will only be permitted by emission-free vessels after 2026.

Hurtigruten, the Norwegian coastal ferry operator, signed an MoU with Rolls-Royce Marine – which became part of Kongsberg on 1 April – to retrofit batteries to most of its fleet. As well as the batteries, the ships will also be converted to run on LNG. Another Norwegian vessel that is planned to be hybridised with a battery installation is the coastal cargo ship Hagland Captain. The contract for the conversion was announced by Wärtsilä in February.

Wärtsilä’s battery hybrid propulsion package will enhance the ship’s environmental performance by reducing its emissions, fuel consumption and noise. The battery capacity is enough to sail in and out of the harbour on electric power for approximately 30 minutes.

The work includes a shore power connection to provide power for loading/unloading operations and battery charging, power take-in (PTI) and power take-off (PTO) technology, as well as a Wärtsilä NOx Reducer. Estimates put the total reduction in NOx emissions as close to 90% and overall fuel cost savings in the range of 5-10%. Before the retrofit was begun Hagland Captain was taken in for repair after losing power in the same storm in late March that disabled the cruise ship Viking Sky.

Offshore vessels which spend a lot of time in DP mode are also good candidates for battery retrofits. One that is soon to be fitted is the well intervention vessel Akofs Seafarer. In May this year the ship will be undergoing a major upgrade at the Mykleburst yard in Norway. As part of the upgrading it will be fitted with a Siemens battery energy storage system.

Running on gas

As 2020 and the imposition of the IMO global cap on sulphur looms closer, some owners are preferring the option of switching to LNG rather than installing a scrubber or switching to what will probably be expensive low sulphur fuel oil (LSFO). The numbers concerned are not yet comparable to those who have opted for scrubber installations, but there are some pioneering owners who have bitten the bullet.

One of those is German liner operator Hapag Lloyd which has announced that it will be converting some of the ‘gas-ready’ ships it acquired in 2017 when it took over UASC. The first of those that are to be converted is the Sajir, a 2014-built 15,000teu vessel. The contract for the retrofitting was signed in February with Hudong Zhongua Shipbuilding. The conversion will be carried out in the Shanghai-based shipyard Huarun Dadong Dockyard.

During its time in the shipyard, the ship’s fuel system and its existing MAN B&W 9S90ME-C10 heavy fuel oil-burning engine will be converted into a dual-fuel variant. The plan will be to operate the vessel using LNG, but to also be able to use LSFO as a backup. The Sajir is one of 17 vessels in Hapag-Lloyd’s fleet that were originally designed to be LNG-ready and its 16 sister ships are also technically prepared for retrofitting. With the conversion of the first vessel, Hapag-Lloyd will be implementing a technological option to reduce the environmental impact of large vessels.

MAN Energy Solutions has previously converted the smaller feeder container ship Wes Amelie to LNG in 2015 and has been in discussions with other owners for similar conversions. The German government is aiding in some instances by giving grants for conversions. Stena Line had been approved for a grant to convert its 1997-built ro-pax Mecklenburg-Vorpommern to burn LNG but in mid-March decided that the ship’s age made such a conversion impractical.

Despite the Stena Line decision, analysts believe that there will be several more conversions put in place, not least because over the last few years, many newbuildings have been delivered as ‘gas-ready’ and engine suppliers have designed modern engines to be more easily converted.