It is fitting that Danish shipowners are amongst the leaders in the pursuit of energy-saving technology and emissions reductions. It is their capital, after all, which hosted what many people believed might have been the most important environmental meeting of all time. Despite protracted negotiations over many days, the fact that the Copenhagen summit failed to deliver a robust consensus on tackling the global climate change challenge has proved a disappointment for many. Proactive shipping companies, though, are not deterred.
Denmark is home to a number of blue-chip owners, amongst them leading tanker and bulk carrier operators including Lauritzen[ds_preview], Norden and Torm, and of course the world’s largest liner company, Maersk, which also has interests in tankers, terminals, offshore energy, intermodal transport and oil trading.
These leading owners should be commended for their pursuit of new green initiatives. But some point out that more could have been done, and sooner. Mikael Skov, acting chief executive at Torm, says shipping has not been sufficiently proactive. Through years of record profits, it has not embraced the new sustainability goals and corporate social responsibility issues in the way that it should. Now, he says, charterers are increasingly setting the agenda and shipping companies are finding themselves under increasing pressure to demonstrate their green credentials.
Torm executives believe that companies involved in ocean transport in future, led still by the IMO, must demonstrate that they are taking environmental issues very seriously. Both ship design and operational procedures are firmly in the spotlight but the development of new technologies has not lost momentum as a result of the disappointing Copenhagen outcome, experts insist.
There are a broad range of green initiatives currently in the frame and some, it must be said, are less to do with environmental magnanimity and more to do with a vital drive to cut costs. But, as the old English proverb states, necessity is the mother of invention and whilst the fight for survival is top of many shipping firms’ agendas, so too is the need to be seen to be active in the development of sustainable and greener shipping.
Some of the energy saving measures are really so obvious that observers might wonder why they have not been adopted before. Switching off the lights, as Maersk describes one of its energy-saving initiatives introduced across its container fleet recently, really does make a difference. And timing ships’ arrivals at destination ports to avoid unnecessary delays would also seem to be a pretty obvious move, though the legal implications for owners of not delivering cargoes with the »utmost despatch« are far more complicated than would at first appear. It is an issue that has kept a number of shipping lawyers very busy in recent weeks.
Torm’s Skov is one of a number of Danish shipping executives who believe the concept of »virtual arrival«, as it is known, has considerable merit – not just for ship operators but also for charterers, ports and terminals and, of course, the over-tonnaged market where ships steaming more slowly than usual helps to absorb more vessels and prevent yet more sailing into lay-up. This is likely to become increasingly important as large numbers of new ships, even with delayed deliveries, are commissioned over the coming months.
Torm runs a fleet of 130 products tankers and 13 bulk carriers, a mixture of owned, chartered-in, and pool- managed tonnage. As well as participating in likely consolidation in the product tanker trades and leveraging on the pool concept by adding mass, the company is emphasising its commitments in corporate social responsibility (CSR). A new vice-president of CSR has been hired and it has declared aims relating to climate strategy of reducing CO2 emissions per vessel by 20 % between 2008 and 2020, 5 % more than the target set by the Danish shipping industry as a whole, and at its office locations by 25 % over the same period.
The company is keenly pursuing the concept of virtual arrival. Owing to the nature of the spot market, tramp vessel owners focus on ensuring that their ships arrive as early as possible, even though a berth is often not ready. As a result, they burn more fuel than necessary, produce more harmful emissions and contribute to port congestion. Three quarters of tanker emissions are a direct result of propulsion, the company says. Speed is the most critical parameter affecting emissions – »twice the speed, four times the emissions«, it says.
The concept of virtual arrival benefits both owner and charterer, Torm executives explain. On the one hand, charterers benefit from paying for less fuel whilst the ship owner gains by keeping revenue as though ships were sailing at their planned speed. They are constantly monitored on the basis of actual weather information and vessels’ actual position at any time. Certainly, the concept has caught the attention of a number of leading owners and charterers including BP Shipping, Chevron, Euronav, OSG, Shell and Vitol, as well as industry bodies such as Bimco and Intertanko.
Some pretty radical realignment moves have taken place at long-established Norden, first listed in 1871 and ranking, therefore, as one of the oldest public shipping companies in the world. It has radically cut costs, shedding around 15 % of jobs ashore and reining in overheads by about 30 %.
The company carried out a detailed analysis of counterparty risk during 2009 and, as a result, had no defaults after the first quarter of the year. It cut back its fleet by almost 40 %, redelivering expensive chartered-in tonnage, and has been actively increasing its 2010 charter coverage. Meanwhile, newbuilding commitments can be financed internally with cash in hand.
One bright sector in an otherwise uncertain dry bulk market, Norden executives believe, is the handysize range. The company is building ten sister vessels in China, equipped with stanchions and lashings to allow the carriage of logs both on deck and in the cargo holds. The first vessel in the series, the Nord Shanghai, set out on its maiden voyage in September to carry logs loaded at Wellington and Napier in New Zealand, bound for South Korea and Shanghai.
The company believes that handysize bulkers offer significant flexibility; they are well suited to many different types of cargo and can call at a wide range of smaller ports. It has 14 owned newbuildings on order and between now and 2012, will take around 12 other handysize units on charters of more than three years’ duration.
J Lauritzen is optimistic on the outlook for the handysize bulk carrier sector too. Speaking to journalists recently, Ejner Bonderup, president of Lauritzen Bulkers, pointed out that more than 60 % of the global handysize fleet is more than 20 years old, compared with 21 %, 22 % and 17 % of the handymax, panamax and capsize fleets respectively. Meanwhile, the handysize orderbook is equivalent to only about 30 % of today’s existing fleet, compared with 49 % and 45 % in the handymax and panamax ranges, and a staggering 86 % in the capsize sector.
Like its shipowner counterparts, Lauritzen has also adopted an environmentally progressive stand. A feature of this recently has been the disposal of older, less efficient tonnage built in the 1990s. The result has been a saving of between 16–26 % in bunker consumption. The company has also initiated a new »Lab-On-A Ship« project to enable more precise measurements of engine performance and resulting environmental impact.
A fresh look at ship design
Hans Otto Holmegaard Kristensen is a senior researcher and adjunct professor at the Danish Technical University. In a research project part-funded by the JL-Foundation, Kristensen has been instrumental in the development of new software which should help to improve the design and subsequent operation of various ship types including container vessels, bulk carriers, ro/ros and tankers. The software, which has been under development for about ten years, is aimed at improving ship design so that in the future, vessels will be more energy-efficient overall. As a result of more effective propulsion, they will also emit significantly less noxious exhaust gases.
Kristensen, a naval architect by background, has held a number of leading positions in ship design over the years. He has worked in a consultancy role for various Danish shipping companies, including J Lauritzen; he worked at the Lyngby ship model basin, now Force Technology, on research into ship propulsion; and he also worked for the Danish Navy on the design of the support ship Absalon.
Then about a decade ago whilst working at the Danish Shipowners’ Association, he started to focus on the ship efficiency project. Interviewed recently for the shipping company’s in-house publication Lauritzen News, Kristensen said: »The genesis of the programme occurred ten years ago when I worked for the Danish Shipowners’ Association. Peter Bjerregaard, the Association’s director, asked me to try to calculate the efficiency of different ship types.«
»It was long before anyone else was doing this,« says Kristensen, »so Peter was well ahead of the curve to be thinking in these terms. On one level or another, I’ve been occupied with the idea ever since.«
Now, as a full-time research at the Technical University, he has had time to complete the software. The program uses a wide range of data for each ship type, as well as cargo capacity, and from this, it enables the effects of small changes in design to be assessed. The object is to reduce propulsive power requirements and total energy consumption.
Kristensen gives the example of a 250-metre container ship in his Lauritzen News interview. »If we increase the length by just 5 %,« he explains, »we would also increase efficiency by approximately 5 % because the hull will be more streamlined. When speed is unchanged, a longer hull produces less water resistance. Of course, many other variables have to be considered. And remember that a longer hull is more expensive, so in the days of low fuel prices, hull length was kept down. But today and in the future, because of generally higher prices and environmental regulations, the emissions reductions can more than compensate for increased building costs.«
Maersk B-class benefit from Loch Striven lay-up
German container ship owners are understood to have approached the UK’s Clyde Ports Authority about the possibility of laying up box ships in the sheltered waters of Loch Striven on Scotland’s west coast. The Loch, some 15 kms long and about one kilometre wide, on average, lies north to south and has been used in the past as a well-protected north European lay-up location by Shell. The oil major laid up the LNG carriers Gastor and Nestor, as well as its L-class ULCCs.
Today, the Loch is providing a lay-up site for five of Maersk’s seven B-class vessels, the »Maersk Brooklyn«, »Maersk Baltimore«, »Maersk Bentonville«, »Maersk Beaumont« and »Maersk Boston«. Together with the similarly-sized Sealand Performance, the five 4,170 TEU ships have formed a six-ship raft in the Loch since mid 2009. Two more B-class vessels are laid up in Laem Chabang, Thailand, where they form the first two units in what is likely to be a four-ship raft comprising two B-class vessels, the »Maersk Brownsville« and the Maersk Buffalo, and two M-class ships, the 4,600 TEU »Maersk Montreal« and »Maersk Malacca«.
Tony Greener, Maersk Fleet Group Manager based in Newcastle, UK, is in charge of the operation of Maersk’s 28-strong UK fleet and a part of his remit recently has been to draw up safe lay-up procedures for the B-class vessels in both Loch Striven and Laem Chabang.
Greener explains that Maersk has gone to considerable lengths to protect the value of these seven vessels, delivered from Volkswerft in 2006/7 at a total cost of some $ 600 m. Originally intended to run an express service between China, Japan and the US east coast, the 30-knot plus vessels have main engines only slightly smaller than Maersk’s E-class which, in capacity terms, are nearly three times larger. The B-class burn around 300 tonnes of bunkers a day at their design speed and are therefore very expensive to run.
Copenhagen-based Soren Andersen, who is responsible for the operation of Maersk’s 460-strong container ship fleet, says the market in this size range is currently saturated and, since the ships belong to Maersk, it made good sense to mothball them carefully so that their condition is preserved for the future.
»These ships are modern and can super slow-steam.« Andersen explains. »We will likely slow-steam them when they are redeployed.«
Just when that could be remains an open question. Some analysts are predicting that the scale of overcapacity on the world’s key container trades will mean a tonnage surplus for years to come. Others believe that just as the speed and scale of the downturn caught everyone by surprise, the rebound will be faster than many economists are predicting. The potential tonnage surplus could be absorbed much more quickly than forecast, they say.
Still others point to the fact that container ship operating economics have changed so dramatically in the face of soaring bunker prices and the drive to cut costs, that mainhaul container vessels may never sustain their originally intended design speeds. In which case, they argue, a two-tier market could develop, with carriers running normal services using large and ultra-large units running at 18 knots, say, with smaller vessels such as the B-class providing an express service on a premium basis.
Whatever the future may hold, Maersk is cutting no corners in its lay-up procedures. The waters of the Loch are cold and clear, Maersk’s Greener explains, which results in lower humidity and less hull fouling. That’s one of the reasons the company has chosen to lay up two other M-class vessels, the »Maersk Maine« and the »Maersk Maryland«, at Clyde Ports’ old molasses terminal in nearby Greenock.
Other benefits of the Scottish lay-up location include the fact that it is relatively close to trade lanes in and out of Europe; that the waters are well-protected and subject only to occasional cross winds which have been carefully analysed by DNV prior to signing off on the mooring arrangements; and that port authority charges are reasonable as compared with some third-party managed lay-up schemes in other parts of the world.
Now that Greener and his colleagues have established sound lay-up procedures for the B-class vessels, others in the company are looking to him for advice on best practice. Could it be that Maersk might itself provide a service for third-party owners in the future? After all, some are predicting that some independently-owned tonnage could sail from delivery directly into lay-up in the coming months.
Greener will not be drawn, however. It’s not something that has been ruled in or out, he explains guardedly, but it would be an activity the company would consider very carefully before getting involved.
New »sustainable« focus a prelude to changing shipping relationships
Bo Cerup Simonsen is the head of A P Moller-Maersk company Maersk Maritime Technology. He believes that in a group as diverse as Maersk, it is vital to have an entity capable of developing key environmental and sustainability strategies across all of the companies within the group.
He says that a lot has been achieved already, pointing out that within the container company Maersk Line, CO2 per TEU kilometre has been reduced by 15 % and is continuing to fall. Meanwhile the company’s ships on order are, on average, 23 % more fuel efficient that existing vessels.
Innovation, Simonsen admits, can often lead to more expense. Examples include moves to improve the design of a number of ship types, measures to raise propulsive efficiency and reduce emissions, and other initiatives like reducing hull resistance through the use of latest generation hull coatings. But, he says, many of the initiatives have payback periods of less than twelve months. And payback periods are moving all the time – as bunker prices continue to rise, they are getting steadily shorter.
Not all of the green initiatives have an identifiable payback. The company’s decision to »re-cycle« its vessels in a shipyard in China at the end of their lives, rather than run them on to a beach in India or Bangladesh, is a relatively expensive option, but one that Maersk feels is corporately responsible. As a result, however, the company has given up millions of dollars in scrap sale proceeds.
Maersk has always been in the vanguard of innovative development, Simonsen points out, and stresses the vital role that group shipyard Odense has played over the years, by working in partnership on innovative ideas and transforming them from mere concepts to reality.
Simonsen has identified some more fundamental changes in global shipping which, he suggests, proactive owners need to address. He notes, for example, that cargo interests are increasinyl focused on ship owners’ corporate social responsibility (CSR) strategies, with particular interest in sustainability and environmental performance.
However, the focus on such issues is not only from shippers and customers. Shareholders and employees also have rising expectations and are increasingly aware of these issues. It is probably no coincidence, then, that Maersk is already in close dialogue with a number of leading customers, including Wal-Mart, IKEA, H & M and Starbucks.
Simonsen also believes that some of shipping’s other traditional relationships will be changing when the present downturn starts to ease. Traditional relationships between ship owners and charterers are likely to change in emphasis, he believes, as will the dynamics between owners and shipyards. For the moment, he notes that South Korean shipyards are more likely to work jointly on innovation than shipbuilders elsewhere.
Hempel optimistic on latest hull coatings
Amidst the general let-down of December‘s Copenhagen summit, there is disappointment amongst coatings manufacturers who had spent considerable time at the IMO promoting the emissions-reducing potential of their products in a technology that is available right now. In the IMO’s second Greenhouse Gas study, coatings were barely mentioned even though some of the premium products have proven fuel, and therefore emissions savings of between 5–10 %.
However, Denmark’s Hempel sees a growing market for the latest generation of biocide-free »foul release« coatings and its confidence appears to be borne out in a customer survey conducted recently.
The company’s sales force concede that selling premium coatings is tough in the present market, but point out that rising bunker prices mean the extra expense is paid back more quickly than before. Depending on the ship and her particular trade, the extra cost can be recouped in a matter of months, they point out. Furthermore, unlike earlier silicon-based hull coatings, products based on fluoropolymer technology work effectively at much lower speeds. This means that they are not only well-suited to a wider range of vessels, but that they are also effective on slow or super-slow steaming container vessels.
Marie Bakholdt Andersen, a Hempel Group Product Manager, explained the results of the survey to Hansa recently. Some 200 shipping companies were contacted by telephone and asked which type of antifouling coatings were most likely to be used in two years’ time. Nearly half – 46 % – said they expected to be using both biocide-based conventional antifoulings and biocide-free fouling release coatings. A slightly larger percentage of 49 % expected to use biocide-based paints and 5 % said fouling release only. Of the 46 % expecting to use both types, however, more than a third said they thought they would be using fouling release paints which, the coatings manufacturers claim, offer the best fuel and emissions savings that are currently available.
Hempel is so confident of the fuel-saving performance of its top-of-the-range hull coatings, Hempasil X3, that it is working with Force Technology, a ship model basin design specialist, on monitoring in-service performance. Hempel is offering to install Force Technology software – SeaTrend – at its own expense to prove the savings and, on this basis, is guaranteeing the fuel consumption reductions. The company pays for the software installation for the first 12 months for those ship operators that want it but, after that, the operators themselves are liable for the SeaTrend license fee. By then, say Hempel executives, owners investing in Hempasil X3 will easily have covered their costs in fuel savings.
Hempel claims that Hempasil X3 works on vessels operating at speeds in excess of eight knots and affords the potential to increase drydocking intervals from 60 to 90 months. Giving the example of a VLCC, the company claims fuel savings of between 8-9 % at the outset, falling to 3 % at 60 months and zero at 90 months. Over a five-year period and assuming a fuel cost of $ 500 per tonne, operators could save in excess of $ 5 m.
Hempel’s Andersen says around 70 ships have now had Hempasil X3 applied to their hulls and mentions a new product, due for release any time now, which will make the transition from silicon-based foul release coatings to Hempasil X3 easier, faster and cheaper.
P. Bartlett
