Owners weather the storm

The German-owned fleet (1,737 vessels totalling 26.1 million dwt) is the world`s seventh biggest, but includes by far the largest capacity of container ships – over 21 per cent of the world`s total TEU capacity. Equally impressive is that the average age of the container ship fleet is under three years. However the German flagged fleet ranks in 15th position with 9.7 million dwt.

With such a large exposure to the container trade, German owners have felt the impact of the downturn in trade. However, Bernt Kroger, president of the German Shipowners` Association, says that not every owner is suffering. Many owners are protected as their vessels are on long term bareboat charter signed in better times. But, he adds, a lot of charters have been re-negotiated in mid term.

Pressure on charter rates has caused owners to look at cutting costs and more are flagging out, and currently around 60 per cent of the German-owned fleet is flying foreign flags. German owners can apply to the ministry for permission to flag their vessels in another country for two years, and this can be renewed once the term has finished.

Around 90 per cent of vessels are owned by one-ship companies – a system encouraged by the German tax system. When the assets of a closing business are sold, the tax rate is halved. So if the company only owns one ship, when this is sold the company closes and the tax liability is halved. This is not possible if the company owns several ships.

At the beginning of the year Germany introduced a tonnage-tax system for domestically owned and registered vessels, but to qualify the ship also has to be managed from Germany. Owners have three years to decide whether to opt in, or remain in the existing tax-on-profits system and, once decided, the company must remain in that system for ten years.

Ten years after the wall came down, Germany`s yards are still divided into east and west – but both sides are suffering from the low prices on offer in Korea. Orders have been scarce over the past couple of years and some yards have decided that they cannot compete in the container ship building market – particularly painful for the country with the world`s largest container ship fleet. Even yards in the former East Germany that have benefited from vast government-backed investments are struggling.

Three yards dominate shipbuilding in the former East German: Volkswerft Stralsund, Kvaerner Warnow and Aker MTW. The EU has limited production to 85,000 cgt for the first two, and 100,000 cgt for Aker MTW as a condition of allowing the post-reunification investment. Following the closure of a capacity-restricted Elbewerft Boizenburg yard, all three have recently bought an additional 6,000cgt capacity allowance. Therefore, these ultra-modern yards cannot fully utilise their facilities until 2005, although there is a review at the end of 2001.

AP Moller`s Odense yard took over Volkswerft Stralsund in early 1998. Volkswerft has a covered building hall measuring 300m by 108m serviced by an 800t gantry crane and can produce ships up to panamax size. At the inland end of the hall is a rail system which transports sections up to 1,800t from the block construction area to the building area. A rail system also transports the ship onto a shiplift of 21,735t (lightweight) capacity for launching. Parts of the 35 mile route to the Baltic have only 6m of water which prevents building container ships above 2,500 TEU capacity. This will rise to approximately 3,200 TEU in 2001 following dredging operations.

Transgressing the capacity limit in 1998 has already cost Kvaerner Warnow Werft (KWW) $42.5 million in subsidy repayment, and there may be up to $22 million the yard has to repay for over-production in 1997. The prospect of further repayment coupled with the capacity limit makes KWW`s president Robert Stenius doubtful if the yard can be sold this year in line with Kvaerner`s stated aim. He expects the EU case to be settled by Christmas and says that right up to the point of sale, Kvaerner will support the yard. As to the capacity limit, he is looking for a more flexible interpretation of the EU regulations, as the full 327,000 cgt of production capacity from yards in Mecklenburg-Vorpommern has not been used in the last three years.

The Norwegian group Aker took over MTW at the beginning of March 1998 and has helped it to win an offshore order (which is not counted in the cgt limit). As a result of the high cgt content of the P&O vessels the yard will deliver four ships this year, and it has a backlog of 11 vessels – either containerships or icebreaking oil/chemical tankers. Spokesman Joachim M<#159>ller says the yard is likely to focus on more specialised tonnage in the future, and is finalising an order with P&O-controlled Aida Cruises for two of the yard`s PU 1200 cruiseliners. These 1,270 lower berth vessels will have a 202m loa and will be delivered in 2002 and 2003.

Further along the coast Howaldtswerk-Duetsche Werft (HDW) has recently strengthened its hold of the submarine building market by purchasing the Swedish yard Kockums. With low prices on offer for standard tonnage, the yard has put plans for an 8,000 TEU container ship on hold. Instead it has been tending towards the specialist end of the market – even the 2,046 TEU vessels being built for Dole have reefer points for all containers. It has already delivered the fast container ships for Norasia, and will build the next generation of six SuperFast ferries – the first two of which will be ice classed. It is known that the yard is in discussions about building cruise ships for Carnival although neither party will divulge any details.

One yard specialising in cruise ship building is Meyer Werft, which has just delivered the 76,800g Superstar Virgo to Star Cruises. In mid-September the first of 60 blocks for the 293m loa Radiance of the Seas was laid in Meyer Werft`s 358 x 39m dock by its 600t SWL crane. The yard will built two of the 24 knot gas turbine propelled ships for Royal Caribbean International with delivery of the first 2500 passengers/1051 cabin vessel in spring 2001 and the other in the second half of 2002.

There are hopeful signs for German shipbuilding in that Blohm + Voss has entered the newbuilding market with a contract with Royal Olympic to build two 24,500g/800 passenger cruise ships. This vessels will use a fast monohull concept recently patented by B+V which features mechanically driven twin propellers. However, the two 5m diameter 130 rev/min (inward rotating) propellers are set very close together with a lateral offset and are said to operate with the efficiency of a single propeller. With only a 7.1m draft there is a tendency for cavitation which is counteracted by the yard`s hydrodynamic concept. This calls for a curved recess in the single skeg aftbody which acts to create a ?tunnel` for the inflow water. This is said to improve efficiency and reduce cavitation.

Flensburger is also looking at vessels with improved operating efficiency. It is currently finishing a run of 11 ice classed multi-purpose vessels (some for its owner Oldendorff) which are said to have operational costs of $1,200/day. Sales manager Uwe Otto says that yard puts has 25 engineers on R&D (out of a total workforce of 600) and is developing new hull lines which, he says, will give life-long advantages to shipowners. For instance he compares the yard`s design for its 2,640 lane meter ferry to the 2,630 lane metres Norsky recently delivered from Aker Finnyards. He says vessels of the type Flensburger is building for UND will consume 53.1t of fuel per day (against 71.4 for Norsky), have a speed advantage of one knot and could be around $10 million cheaper.

Filling a niche market for vessels of around 13,000 dwt is Lindenau in Kiel. It is building a series of 13,000 dwt coated steel chemical tankers for German owners and says its customers believe a ships` quality and lifetime outweigh any difference in initial purchase price -which has recently been up to 30 per cent. The yard can construct vessels up to 180m in length and while crane capacity is limited to 70t, a local owner of a 2,000t floating crane usually moors the adjacent to the yard and this is used for lifting larger sections.

Engineering solutions for export
As domestic yards struggle, Germany`s equipment manufacturers are increasingly signing deals with foreign yards. One example is Siemens Schottel which has secured the first order for its propulsor from Shanghai Edward (The Motor Ship, January 1999, and July 1997).
The azimuthing SSP uses a permanently excited motor – that is permanent magnets attached to the rotor. This has two main advantages, says sales engineer Peter Andersen: it does not require any electrical contact to the rotor and there is no heat produced. As there is no heat generated in the rotor there is no need for it to be air cooled, allowing the rotor/stator gap to be minimised. This improves the motor`s efficiency by up to 2 per cent, says the company.
In Kiel, MaK is busy delivering 27 or 28 engines a month over the last quarter of the year, bringing the 1999 production to 700MW (0.95 million bhp). John Phipps, manager of sales and marketing, says the level of orders for the M43, 37 to date has surprised the company. Mr Phipps says the engine has arrived at the right time, with an increase in roro and ropax vessel orders and more owners considering diesel-electric driven ships.
When asked about the possibility of a larger bore version to the range, Mr Phipps says he feels this is unlikely as the low volumes make the investment difficult to justify.
Following the merger with Caterpillar, Mr Phipps says that the new company can now offer shipyards a single supplier for both main and auxiliary engines.
Hamburg is the centre of MAN B&W`s service operations. While the centre undertakes a variety of repairs and reconditioning, it is best known for its work on crankshafts. One recent arrival is a bulker with a broken web on the crankshaft of its low-speed main engine. Having moved the rear section of crankshaft to the workshop, the damaged throw was removed by taking the main bearing journal out of the adjacent throw. A new web was cast and fitted to the existing big end. New main journals were then installed and the new part of the crank refitted to the undamaged rear section. The complete rear section has been sent to Czechoslovakia for grinding of the bearing journals.