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Feature 3 | GERMAN MARINE INDUSTRIES Banking on growth


German containership operator Jochen Döhle expects owners to start ordering vessels again within 18 months as the economy turns around and the vessels now being delivered find employment.


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ccording to Peter Döhle president Jochen Döhle the current market conditions are seeing cargo being


rolled over in many export ports around the world and with the growth having returned to 2008 levels there is an expectation that laid up ships will return to service. At the start of the year there were some 592


container vessels laid up and by the beginning of the summer that had fallen to 263 ships; “But another 70 to 80 ships were scheduled to re-enter service” by mid-summer claimed Mr Döhle. As a result of the laid up ships returning to


service there will inevitably come a time when re-entered service and with continued growth the need to speed up ships will arise again. “Slow steaming will stop in 12-18 months


time and the capacity problems will mean that cargo prices will increase again,” said Mr Döhle. In addition the president of the Germany-based ship operator said that the orderbook has been “stretched long”, of the 1357 container ships on order before the crisis there are now around only 600 remain today and they will be delivered, “not next year, but in 2013 and 2014,” he said. In a particularly upbeat message, not


uncommon in the container shipping sector which regularly predicted 13-15% growth in the Asia/Europe trades (most of which proved to be close to the mark, until 2008), Mr Döhle said that the container lines would


need to start ordering new ships soon in an effort to meet the growth expected by around 2012. Peter Döhle has already made provisions


for the expected upturn in the markets with an order of six vessels of the latest design by CSBC Corporation, Taiwan. CSBC has rearranged the positions of the fuel oil tanks and the ballast water tanks to reduce the amount of ballast water required and to raise the cargo carrying capacity of the new vessels. In all CSBC has delivered three ships of


this type already and the yard will deliver two more by the end of this year. CSBC has 10 orders for the 6600TEU container ships; six are from Germany’s Peter Döhle and four from Taiwan’s Yang Ming Marine Transport. Taking the decision to order vessels was


difficult, however, according to the company which is aware of a raft of new green regulations heading down the line towards the shipping industry in general. Mr Döhle explains that the smaller


operators must wait for the larger companies to set the tone in new orders so that more environmentally friendly vessels can be adopted by the industry. “Can you take the risk of ordering ships


designed to operate at slower speeds if the rest of the industry is moving fast, it needs companies like Maersk and Evergreen to set the pace,” he said. He went on to say that operating at


significantly slower speeds is only possible under certain economic conditions. “If inflation in Europe rises to 6% and the interest rates rise to 12% then slow steaming will be a problem because the cost of the inventory aboard the vessels will increase significantly.” If oil prices are above US$40/bbl then


slow steaming can be cost effective, if all companies adopt similar technology and operate at similar speeds. Other cleaner technology, such as LNG power, is less likely to be adopted. “Tere is a space problem for container ships operating engines that use LNG fuel,” said Mr Döhle. Ship size is unlikely to be a factor as ships


are probably at their optimum size, he said: “economies of scale are not found in ships that are much larger than the existing vessels”. Moreover, the KG system that financed


the German shipbuilding spree of the last 15-20 years is over with Asian banks that can lend at substantially cheaper rates than their European counterparts at this time will take the lead in ship finance in the future. It is the cost of financing which is increasing


in spite of the capital rich banks in Asia that Mr Döhle believes will shape the industry in the future. “It is market circumstances and not regulations that will decide any changes in direction for shipping,” concluded Mr Döhle. And at the moment the market is demanding faster delivery of an increasing amount of cargo. NA


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The Naval Architect September 2010


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