Tradewinds – Maersk puts faith in older ships

(Written by Adam Corbett)

20 March 2013 - The world’s largest boxship operator says efficiency is not all about building new — upgrading older ships can be just as effective, writes Adam Corbett in London

Yet, while the mega-boxships may be grabbing all the attention, the leading containership operator is keen to stress that newbuildings are not the only way forward. Maersk Line says its extensive retrofitting and efficiency programme for its 500-ship fleet is showing similar prospects for efficiency gains.

Niels H Bruus, head of optimisation at Maersk Line, believes retrofitting can match newbuildings and that it is wrong to assume newbuildings are the only way forward.

Maersk’s commitment has been evidenced by the recent completion of a project to change the bulbous bows of a series of five containerships at China’s Qingdao Behai Shipbuilding & Heavy Industry to match the hull form with lower operating speeds.

Bruus said: “There is no doubt our approach to efficiency has been driven by optimising the way we operate.

“It is our firm belief that the opportunity for savings in the existing fleet is the same if not more than in the newbuildings.

“We think the technology that has the greatest potential for savings is in retrofitting and doing a thorough review of ships’ performance from the cost perspective.

“The last thing the industry needs is more vessels and there is no sense in making further [newbuilding] investments to get efficiency gains.”

That statement might surprise some given that the company is about to take delivery of 20 of the largest ships ever built into one of the most overtonnaged markets.

Yet Maersk is insistent that retrofitting, which could include anything from improving hull form, as with the Beihai vessels, to changing coatings and adding technology to improving propulsion performance, will pay dividends.

The company calculates that up to an extra 20% efficiency could be squeezed out of existing boxships. Payback time for the investment varies from a month to two years, although Bruus concedes it may be longer for major retrofits such as changing the bulbous bow.

A reduction in containership operating speeds has largely offered the rationale behind the retrofitting programme to optimise ships for the lower speeds.

Maersk’s efficiency drive on its existing fleet seems to be paying off. It has already reduced greenhouse gas emissions, which roughly equates to fuel consumption, by 25% per container since 2007 and it wants to see a 40% reduction by 2020.

The group is targeting a 20% carbon dioxide (CO2) reduction by 2020. Even marginal cuts in fuel consumption can pay huge dividends. The group’s fuel bill comes in at a huge $7bn annually and even a 1% reduction would save the company $70m.

Other sectors of the Maersk group are also contributing, with Maersk Tankers recently agreeing with Statoil to reduce emissions by 10% between 2012 and 2014 and investing nearly $1m-worth of energy-saving efficiency devices in each of its VLCCs. The aim is to improve fuel consumption performance by 8%.

Bruus said: “I think what we are doing is right, we have to optimise our fleet and it will turn out to be the right decision even if the price of fuel falls.”