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“Sink or swim”

In both China and India, international experts revealed that, percentage growth in the population moving into the middle class has declined, and anticipated growth in Inter-Asian trade is quite modest. Still, the BRICKTIM countries constitute 40% of the world population and have outgrown the largest economies of the past. Yard capacity is at an all-time high, order books are empty and the yards are suffering as a result of low newbuilding activity. They are more than willing to develop innovative solutions.

shippicHowever, there are few buyers, apart from some risk-willing first movers, due to limited capital availability. As a consequence, the yards’ main focus is on retrofitting. Overall, they estimate the size (dwt) of the 2020 world fleet to be 25–30% higher than the 2012 level. The prices of HFO, MGO and LNG follow the oil price, and as such all three remain at a high and increasing level in 2020 and beyond. MGO remains the most expensive of the three, at approximately twice the HFO price, with LNG at approximately 10% above the HFO price (including bunkering cost). Poor economic conditions limit the funding of new technology. At the same time, environmental awareness is rising and there is an increased focus on the problem of pollution from the maritime sector. The Experts have experienced accelerating global temperatures due to greenhouse effects and severe consequences in terms of flooding in several parts of the world.


Strong local and regional regulatory initiatives are supported. One of the few successful global initiatives is the BWMC, which was ratified in 2014. This initiative requires most ships in international trade to install ballast water cleaning systems by the end of 2019. The implication is that several thousand ships will need to have systems installed within a very short time span. The yards position themselves to get the work of installing the systems, but the costs concern owners. Furthermore, there has been limited success in implementing MBMs, and the global cost of CO2 emissions is effectively in the range of $30–50/tonne. A world where there is low GDP growth but high regulatory pressure is a bleak scenario for yards and owners alike. Low capital availability in the market puts limitations on the funding of new technology. Still, yards and manufacturers see opportunities coming from the high regulatory and stakeholder pressure, and some first movers will invest in innovation as a means to gain a competitive advantage.

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