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Container Ship Update - DNV Powered By Docstoc
					INFORMATION FROM DNV TO THE CONTAINER SHIP INDUSTRY
NO. 3 – SEPTEMBER 2004




Container Ship Update




  SMM Edition:

  Serving the German
  Shipping Cluster

                                               I   Carsten Rehder Shipping:
                                                   A global view
                                               I   Flensburger Schiffbau-Gesellschaft:
                                                   Testing approval system of the future
                                               I   Container ship safety:
                                                   An area for increasing concern?
                                                                              Hafen Hamburg




Serving the German                                                            Hafen Hamburg:
Shipping Cluster                                                              Exceptional
                                                                              growth for
In 2002, DNV celebrated the 100th anniversary of the establishment
of the first DNV office in Hamburg. 102 years later, in 2004, we cele-
brated the introduction of our German Committee. A vital step,
marking our dedication to maintaining a significant presence in
Germany.
   Our German committee provides a forum for dialogue and dis-
cussion. For DNV it is vital to understand the needs and priorities
                                                                              key port
of the local market. Personal relationships and trust are built and
developed over time in various settings, be that in business or in
other social events. So we will listen to the German market and               “The port of Hamburg is very well
contribute with our international experience and technical back-              positioned for the future. We have
ground from several shipping segments.
   At the last committee meeting in September, decisions were
                                                                              the capacity to handle any size of
made to introduce new initiatives to enhance the services offered             ship, we have the road and rail
to the local market. Our objective is to serve the German market in           networks and we have an excellent
the best possible way.                                                        geographical position,” says Dr. Jür-
   Our service centre in Hamburg is our day-to-day first line point
of contact with our German clients. We strive for continuous                  gen Sorgenfrei, Chairman of the
improvement in the services we offer. We have to earn the trust of            Port of Hamburg marketing organi-
our clients every hour, every day throughout the year. This is a good         sation. So far this year, the port has
ambition which agrees well with the primary strategy of DNV, to pro-
                                                                              grown by an exceeptional 15 per
vide quality services. Should there be incidents where we do not
fully succeed, we see that as an opportunity to put things right and          cent in terms of volume. “For the
improve our services in an effort to help our customers reach their           foreseeable future we are looking at
goals.                                                                        an annual growth rate of some six to
   DNV is an active, integrated part of the German shipping cluster.
We are looking forward to further expanding our business with our
                                                                              eight per cent, further positioning
many customers and contacts in this important part of DNV’s home              Hamburg as the number one sea port
market.                                                                       in Europe – with a strong focus on
                                                                              container shipping,” says Sorgenfrei.



                                                                              OOCL of China has the largest vessels coming
                                   Tom Virik                                  into Hamburg for the time being, with the
                                   Senior Executive                           OOCL Hamburg and OOCL Long Beach being
                                   Vice President and                         the largest with 8,063 TEU capacity. “We have
                                   Member of the                              no problems in handling the draft of vessels like
                                   Executive Board                            these two. The maximum draft in Hamburg is
                                                                              14 metres or more after dredging in 2002 and
                                                                              further dredging is planned for 2006. Later this
                                                                              year there will be container vessels of 8,500 TEU
Providing service in Germany                                                  coming to Hamburg,” continues Sorgenfrei.
                                                                                 Hamburg Hafen (Port of Hamburg) is mar-
                                                                              keted very actively at shipping and transport
                                                                              conferences and exhibitions worldwide, and a
                                                                              large number of customer seminars are
                                                                              arranged in Germany, as well as in a host of
                                                        DNV Maritime          other countries. The marketing organisation
                                                        Service Centre        counts 36 employees with offices in New York,
                                                        Hamburg.              Singapore, Shanghai, Seoul, St. Petersburg and
                                                        From left to right:   Hong Kong, to mention a few. The Port of Ham-
                                                        Susanne Kniel,
                                                        Jost Bergmann,
                                                                              burg celebrated its 815th anniversary this year
                                                        Jörg Langkabel and    with an extensive exhibition about the port, its
                                                        Per Jensen.           history and importance to the country.


2   CONTAINER SHIP UPDATE 3 2004
A container vessel passing under the Köhlbrand bridge in Hamburg.




                                       “Our customers,” continues Sorgenfrei, “are of      Bahn (DB), but a total of 23 rail operators serve
                                       course mainly shipowners and operators to           the port. The trains go to several countries in
                                       whom we demonstrate how attractive Hamburg          Europe, for instance the Czech Republic where
                                       is compared to competing ports. Here I would        some 50 per cent of the country’s total imports
                                       like to highlight the Eurogate terminal, as well    and exports go in and out through the port of
                                       as the new Altenwerder container terminal. In       Hamburg. Other important countries are
                                       total 106.3 million tons of cargo went through      Poland and also Russia, where the growth rate
                                       the Port of Hamburg in 2003, and the growth         is 30 per cent per year. Typically, most of the
                                       in the first quarter of 2004 was an astonishing      trade to the latter countries is by smaller, feeder
                                       27 per cent. Container shipping constitutes         container vessels, which are also important in
                                       the largest portion of the trade with some 90       the trade with Scandinavia.
                                       per cent of the total volume for the Port of            “The Volume for the year 2010 is expected
                                       Hamburg.                                            to reach approximately eight million TEU,”
                                           “When looking at the capacity, we can turn      according to the port’s projections. “The exist-
Dr. Jürgen Sorgenfrei, Chairman        around container ships within a few hours           ing port areas can accommodate a future
of the Port of Hamburg marketing       where typically some 2,500 boxes go out and         increase in container throughput of up to 15
organisation.                          just as many go in to a large vessel. A train can   million TEU.” DNV will work with the port in
                                       handle some 90 containers. This means a need        the future on matters of safety and security as
                                       for some 30 trains per container ship. Port of      these are also important matters for DNV’s
                                       Hamburg is a rail port,” says Sorgenfrei. In        international customers in the container trade.
                                       2003 some 1,200,400 car wagons went in and
                                       out of the port. The largest operator is Deutsche   Magne.A.Roe@dnv.com



                                                                                                            CONTAINER SHIP UPDATE 3 2004    3
                                     Carsten Rehder




                     Carsten Rehder:
                     A global view
                     “Containers are the instrument of globalisation,” says Thomas
                     Rehder, CEO of Carsten Rehder Shipping. The shipping company
                     is 101 years old and was founded in Hamburg. Thomas Rehder
                     is the fourth generation at the helm of the company.




                     1,100 TEU container feeder vessels to DNV class.



                     “Containers are the instruments of globalisation,” says    buy and sell second-hand tonnage,” says Rehder. “We
                     Thomas Rehder, CEO of Carsten Rehder Schiffsmakler         do have one newbuilding under construction in Roma-
                     und Reederei GmbH & Co. KG. The shipping company           nia, but this was ordered a while ago and will be deliv-
                     is 101 years old and was founded in Hamburg, and           ered in 2005. If we order today at present price levels
                     Thomas Rehder is the fourth generation at the helm         we may get the newbuildings in 2007 and that is very
                     of the company.                                            far into the future. We own some vessels ourselves, in
                         Neatly written in the official records of the local     other cases the ownership is organised as a KG Invest-
                     court in Hamburg, the company was founded on               ment with a number of investors.
                     December 23, 1903 and this was actually a Christmas           “We must always be in a position to buy and sell
                     present. The office address was – as today – 42 Grosse      vessels, and we stick to what we are best at – container
                     Elbstrasse. The building, however, is of a newer date.     feeder vessels and multipurpose ships, and maybe
                     Around the corner there is actually a street called        other dry bulk tonnage. We will not venture into oil
                     Carsten-Rehder-Strasse. Today, Carsten Rehder oper-        transport. We arranged the purchase of ten vessels en
                     ates a fleet of 10 ships, eight of which are container      bloc this year from Keppel in Singapore as they with-
                     feeder ships with a typical capacity of 360 to 1100 TEU.   drew from operating container vessels,” continues
                     One vessel is a multipurpose tweendecker and one           Rehder. This deal was done in partnership with INC
                     ship is a gearless coaster which Carsten Rehder oper-      Interorient Navigation Co in Limassol, who took over
                     ates for foreign owners.                                   one part of the fleet. “The timing for this was right,”
                         The two largest container vessels are to DNV class     says Rehder and continues: “The market conditions
                     – the MV Dolphin Strait with a capacity of 1,118 TEU,      are very favourable right now, and I believe this will
                     and its sister vessel MV Victoria Strait with the same     be the picture for a while as it is mainly China and
                     capacity, both built at the Jinling Shipyard in China.     globalisation which are driving the market.”
                     “We generally not only go for newbuildings, but also          When asked what he expects from class, Thomas
                                                                                Rehder says: “I expect class to understand my business.
                                                                                We focus on quality of operations and so does DNV.
                                                                                Both companies are shipping experts and I like inte-
                                                                                grated, professional know how DNV’s and the good
                                                                                service we get from the Hamburg office, with the short
                                                                                way to Oslo should any problems need to be solved.
                                                                                We also have good experience of ISM with DNV,” says
                                                                                Rehder.

                                                                                Magne.A.Roe@dnv.com

                                                                                Thomas Rehder, CEO of Carsten Rehder Shipping.



4   CONTAINER SHIP UPDATE 3 2004
DNV Navigator for Carsten Rehder:
Updated information for
any port worldwide




    Navigator                                                                         Captain Reinhard Braun is the Nautical
                                                                                      Superintendent for the Carsten Rehder fleet.




Captain Reinhard Braun is the                   with an increased focus on safety and secu-
Nautical Superintendent for the                 rity. Today, the Master and his officers find
                                                themselves with a large amount of paper-
Carsten Rehder fleet. Six contain-               work in addition to their other normal
er vessels in the fleet are using                duties. The demand for reporting is con-
the DNV Navigator system. “The                  stantly growing and puts a heavy burden
                                                upon the bridge team.
system has been very positively
received on the ships and by their              Reduces paper work
masters,” says Braun. DNV Navi-                 DNV Navigator contains information about
gator is always updated per e-                  requirements related to navigation, security,
                                                ballast water and reporting to port authori-
mail to the vessels and also by                 ties. It makes all the information available
CD-ROM.                                         at the officers’ finger tips and produces the
                                                reports within minutes.
Avoid delays                                        “The USA is the most demanding as
DNV Navigator is an on-board electronic         regards paper work,” says Braun. “We see
information system which generates port         the many benefits of DNV Navigator on the
clearance reports and reduces paper work        long term horizon as it will save our crew
and reporting time. These are some of the       members from having to carry out many
highlighted benefits of DNV Navigator. It is     time consuming operations.”
well known that the shipping industry has
changed substantially over the past few years   Magne.A.Roe@dnv.com



                                                                                                  CONTAINER SHIP UPDATE 3 2004       5
                                       Flensburger Schiffbau-Gesellschaft




                                      Flensburger Schiffbau-Gesellschaft:
                                      Testing approval system
                                      of the future
                                      “Speeding up the process is very important,” says Wolfgang Bühr,
                                      head of design and development at Flensburger Schiffbau-
                                      Gesellschaft (FSG). “In the interaction between class and yard,
                                      the use of DNV’s eApproval saves time and thus also money.”




    From left: FSG’s Wolfgang Bühr, Head of Design and
    Development, and Broder Hinrichsen, Manager Steel Design.




                                      “For us, with a large design       courier. Needless to mention,     cally and stamp the drawings
                                      department working solely          this takes time, and in ship-     and upload the documentation
                                      with state-of-the-art design       ping, time is money.              back to DNV Exchange togeth-
                                      tools, using old fashioned ways       To DNV, the application of     er with the approval letter.
                                      of approving drawings from         smart, cutting edge IT solu-
                                      a classification society is not     tions is essential for the effi-   First yard
                                      good enough. We have tested        cient delivery of our service.    FSG was the first DNV cus-
                                      out DNV’s eApprovals for           This is why DNV, as the first      tomer outside Norway to use
                                      a while, and the system works.     classification society in the      the eApproval service for its
                                      As with all new ways of work-      world, is introducing eAp-        new roll-on/roll-off carriers
                                      ing there are bugs, but on the     proval – the approval system      for UND Ro-Ro Isletmeleri
                                      whole this works nicely for        of the future.                    AS. We are highlighting this
                                      us,” says Bühr.                                                      service in Container Ship
                                                                         How it works                      Update as this will be the
                                      No stacks of paper                 Through a secure service on       future for ship design and
                                      Stacks of drawings and docu-       DNV’s web tool, DNV               construction work.
                                      mentation. This is a familiar      Exchange, manufacturers, ship        Broder Hinrichsen is the
                                      sight to shipyards, owners and     yards and designers can submit    manager of steel design at
                                      operators during the plan-         and receive documentation         FSG: “We look forward to
                                      ning, design and construction      over the Internet. Using eAp-     using eApproval in our future
                                      of vessels. Paper copies, folded   proval, drawings, calculations    DNV projects and to con-
                                      many times into binders and        and accompanying letters are      tributing our feedback to the
                                      storage boxes must be found,       uploaded to the DNV               further development of the
                                      placed on the table for discus-    Exchange server. In this work-    system by DNV.”
                                      sion and then quite often sent     ing process, DNV will approve
                                      back and forth by mail or          the documentation electroni-      Magne.A.Roe@dnv.com



6   CONTAINER SHIP UPDATE 3 2004
HSH Nordbank




HSH Nordbank in Hamburg:
Largest in the world
in ship finance
HSH Nordbank has one of its corporate headquarters in the city
centre of Hamburg, the other one in the port town of Kiel a
short drive north of Hamburg. The bank, with assets of 180 bil-
lion Euro, is a major part of the German shipping cluster.




From left: DNV’s Jörg Langkabel and HSH Nordbank’s Harald Kuznik, Executive Vice
President and Global Head of Shipping.



HSH Nordbank’s volume of shipping               tinues Kuznik. “We know the owners           yards, a class society can be hired in to
business is 20.8 billion Euro, making           and the yards very well and can tailor       carry these out as a class society has
the bank the world’s largest in ship            our solutions to fit most needs. As we        technical competence and hands on
finance. Its customers are primarily con-        do mostly newbuildings we have to look       experience of all the yards, but the
tainer shipping, bulk carrier and oil           very closely at how the yards perform        price of the service must of course be
tanker operators, but other shipping            regarding quality standards. After all,      competitive,” says Kuznik.
segments are also financed. The bank             a vessel must meet the needed criteria          The driving force for last year’s steep
has extensive experience in shipping            regarding delivery time and vessel quali-    increase in ship rates is China, and for
and finances mainly newbuildings with            ty. As more shipbuilding activity goes       German shipping companies the
a long term perspective.                        towards China and new nations in this        demand for new container vessels with
    “Germany is a country where we have         regard, such as Vietnam, we have to          a capacity of more than 7,500 TEU
to import raw materials which we then           ensure that the quality is there. So, yes,   has grown substantially according to
process and export again. I believe that        we do take a close look at the yards         the bank’s annual report for 2003.
is a key explanation of why Germany is          where the owners choose to build.”           HSH Nordbank’s portfolio comprises
such a powerhouse in ship finance. The               After China became a member of the       container vessels (34.1 per cent), oil
container ship activities with German           WTO the country’s banking system has         tankers (18.8 per cent), bulk carriers
owners and capital started in the early         undergone radical changes away from          (18 per cent), chemical and product
1980s and our bank has developed with           a one state owned and run central bank       tankers (8.9 per cent), passenger ships
the market since that time in ship              to more diversified banking, also open-       and ferries (8.9 per cent), cruise ships
finance. Today our customers are global,”        ing for foreign banks based on a market      (2.5 per cent), gas tankers (2.2 per
says Harald Kuznik, Executive Vice Pres-        economy. This also makes China and as        cent) and others 6.6 per cent.
ident and Global Head of Shipping.              well as Vietnam, in general terms also
    “We have long experience in ship-           more attractive.                             Magne.A.Roe@dnv.com
ping and have an excellent staff,” con-             “Regarding the quality assessments of


                                                                                                     CONTAINER SHIP UPDATE 3 2004     7
                                   See-Berufsgenossenschaft




See-Berufsgenossenschaft (SBG)
Wants more vessels sailing
under the German flag




                                   “German shipowners have promised           “We see class as an important part of
                                   the German government they will            the safety and security measures in
                                                                              shipping, thus ensuring the imple-
                                   re-flag at least 100 of their ships to      mentation of the international rules
                                   the German flag by the end of the           and regulations,” continues Woelki.
                                   year 2005. This is their contribution to   “Our Technical Surveyors also run
                                   maintaining the favourable tonnage         Port State Controls in Germany and
                                                                              we employ people aged to 60 or so
                                   tax system. The German flag must            who are retired ship captains and
                                   also be attractive to the owners and       engineers – they have excellent
                                   operators,“ says Nicolai Woelki, head      hands on experience. To us, age is
                                                                              not a problem,” says Woelki.
                                   of SBG, the German flag state author-
                                   ity and also the pension fund and          Ship Safety Division
                                   health insurance for German seafarers.     For DNV, the safety division is the


8   CONTAINER SHIP UPDATE 3 2004
                                      Nicolai Woelki, head of SBG in Hamburg.




part of SBG DNV cooperates with          In addition the SBG is also the        Other SBG responsibilities
– SBG is authorised to do this by     Port State Control: “As from 1982,        The organisation manages the
the Federal Ministry of Transport,    SBG has also been responsible for         German Seafarer’s Social Fund,
Building and Housing. The divi-       Port State Control (PSC). The             providing social security for about
sion is described as follows on the   objective of PSC is to achieve har-       3,400 marine related companies,
SBG website (www.see-bg.de):          monisation and greater effective-         including 3,200 vessels flying the
   “The Federal Republic of           ness in the enforcement of inter-         German flag (2003 figures). Its
Germany has to a large degree         national conventions; it is based         total turnover was 1.3 billion
transferred the implementation        on an administrative agreement            Euro in 2003. The pension fund
of the international conventions      of the Western and Northern               has a total of 106,000 (2003)
in the sector of maritime safety      European transport ministers              beneficiaries and there are 70,000
and marine environmental pro-         of 26th January 1982. Within this         insured members in the health
tection, and the ordinances           scope at least 25% of all foreign         fund.
passed in supplement thereof,         flag ships calling at German ports
to SBG.”                              are inspected.”                           Magne.A.Roe@dnv.com



                                                                                                          CONTAINER SHIP UPDATE 3 2004   9
                                    Container ship safety




                                    Container ship safety:
                                    An area for increasing
                                    concern?




                                    Introduction                                          biggest ships will grow. In the same way, within
                                    The container ship has been growing steadily          the various size segments, there will be contin-
                                    in size since it was first introduced in the late      ued optimisation taking place, as is the case
                                    1950s. The biggest ship on order has regularly        with the Panamax ships. A few years ago, the
                                    beaten the previous year’s record, with the lat-      biggest Panamax ship was some 4,000–4,500
                                    est order from China Shipping Container Lines         TEU. The latest design published by Aker Ost-
                                    and Seaspan being for a 9,200 TEU ship which          see can carry 5,600 TEU. The superstructure is
                                    has been later increased to 9,600 TEU. Since          split in two sections, with the advantage of more
                                    the late 1950s, the maximum size has grown            containers in the holds and on deck, reduced
                                    more or less along a straight line until the early    warping stresses and a better field of vision
                                    1990s. The advent of the post-Panamax design          from the bridge.
                                    accelerated the growth rate. In some ways, it is
                                    similar to the development which took place for       Technical restraints
                                    VLCCs in the 1970s, when there seemed to be           So how big is the container ship likely to grow?
                                    no limit to the extent to which ships would           There are some technical restraints that decide
                                    grow. We know, however, that the ‘million             the current maximum size. The current design
                                    tonne’ tanker never materialised and the typical      is single screw, with the biggest diesel engine
                                    VLCC converged to the present 300,000 dwt             produced (12 cylinder), maximum bore (980
                                    tanker, which seems to be the most popular size       or 960 mm), the available horsepower is about
                                    for VLCCs.                                            93,000 BHP (68,500 kW), giving it a maximum
                                       Will the container ship growth continue or         speed of some 24–25 knots, which is what the
                                    will it level off? It is the unit cost per TEU mile   industry requires. However, in August this year
                                    which is the driving force, and economy of scale      it was reported that a 14 cylinder design had
                                    will fuel the growth, but the marginal gains are      been ordered in Korea for delivery to Odense
                                    likely to diminish with increasing size. So in all    Staalskipsværft. It is still unclear what size ship it
                                    probability, there is an optimal size to which the    will go into, but some press reports indicate


10   CONTAINER SHIP UPDATE 3 2004
With the increase in the volume of consumer goods pro-
duced in the Far East, in China in particular, liner operators
are demanding more and bigger ships. At the same time, we
see reports of incidents involving massive loss of containers
and huge fires that give reason for concern. Will container
ships continue to grow in size, and what are the major safety
concerns being faced by the industry?




that it will break the 11,000 TEU mark. This          design, like some shallow draft tankers have
engine can deliver some 80,000 kW, and even           done successfully? Various sources claim that
if there are 16 cylinder designs available on the     the initial investment is in the order of 10 per
drawing board, it appears that the single pro-        cent of the newbuild price. Improved propeller
peller cannot handle this size of engine.             efficiency reduces the running cost, but the
    Most ports around the world have a draft          economics still seem to discourage such a ven-
limitation of less than 14 metres. The typical        ture. The twin skeg design offers obvious bene-
scantling draft today is 14.5 metres, with a          fits, like redundant propulsion and a ‘take me
design draft of some 13–14 metres. Dredging           home’ option in case of an emergency. This is
and terminal development may change the pic-          a strong argument in view of the fact that the
ture over time, but this is likely to remain a lim-   rising value of ship and cargo represents an
itation in the foreseeable future. This is also       increasing insurance risk.
important for the propeller diameter. The big             The ship beam has been limited by the avail-
engines require propellers of close to 10-metre       able crane outreach and lifting capacity in the
diameter. With some clearance to the bottom           various ports around the world. Until the
and some margin for the upper tip, the 13–14          advent of the post-Panamax ship this was no
metre water depth is needed to accommodate            problem. The maximum beam has increased
the propeller even though ships move at slow          in steps from 32.2 metres to the present 42.5
speed in restricted waters with low draft. In fact,   metres for the 8,500 TEU class and to 45.8
the propeller may be the effective restricting        metres for the 9,600+ TEU class. Terminals have
factor for ships size at the moment.                  installed new cranes, some of them with an
    The single screw design prevails for the time     option to extend at a later stage if needed. The
being. Optimising for fuel economy and low            lifting capacity is important not so much for
vibration may be incompatible and a practical         the maximum container weight, but more for
trade off barely acceptable. So why not go for        the handling of the hatch cover pontoons. As
the twin skeg (two engines, two propellers)           the stack weight has been increasing, a corre-


                                                                                                         CONTAINER SHIP UPDATE 3 2004   11
                                    Container ship safety




                                    sponding increase in the weight of the covers        ican Institute of Marine Insurers has expressed
                                    is a logical consequence. Currently pontoons         concern about the increasing insurance risk.
                                    weighing up to just less than 50 tonnes are          They have put forward an average value of each
                                    being installed.                                     container (TEU) in the order of USD 45,000,
                                        Designs for 12,000 TEU and even 16,000           which puts the cargo value at some USD 430 mil-
                                    TEU (Malaccamax) have been mentioned in              lion, making a grand total of some USD 500 mil-
                                    the press. All designs beyond the 9,500–10,000       lion for the 9,600 TEU design. The ratio of cargo
                                    TEU limit require alternative propulsion, either     to ship value is about 5. That is a lot of eggs in
                                    twin screw or some kind of combination with          one basket.
                                    pods or contra-rotating propellers. This increases
                                    the investment and hence offsets the economy         Risk picture
                                    of scale incentive for bigger size. If it happens,   So what is the risk picture for these big ships?
                                    there will most probably have to be a jump in           FSA (Formal Safety Assessment) studies pro-
                                    size to compensate for the increased capital         vide information about the hazards associated
                                    cost. With the strong need for operational relia-    with container ships. Hull and machinery dam-
                                    bility and schedule integrity, it is no surprise     age rank highest, followed by collisions and
                                    that there is reluctance in the industry to try      fires. The total cost is estimated at USD 359,000
                                    this alternative. Various studies have been pub-     per ship per year for a 4,500 TEU (Panamax
                                    lished, and it seems that the twin-skeg alterna-     size) ship. Transposing the statistics from small-
                                    tive may the most likely to succeed. We have         er ships to the new big ones gives us figures in
                                    seen this in VLCCs where draft restrictions have     the order of USD 700,000–800,000 per ship per
                                    inspired the wide beam and twin propulsion           year excluding cargo value.
                                    alternative.                                            Some of the most prominent accidents
                                        The new big ships cost in the order of USD       involving container ships are collisions, contain-
                                    80 to 100 million to build, depending on mar-        er fires, ship side fatigue, bow impact damage,
                                    ket conditions and building country. The Amer-       loss of containers, parametric rolling and vari-


12   CONTAINER SHIP UPDATE 3 2004
ous cargo claims, often in connection with           of water to stop it from spreading, and then let-
reefer containers.                                   ting the stack burn out. The damage is normally
   A modern, well designed bridge, verified and       substantial, like in the case of the CMA Djakarta.
approved by class is a prerequisite for safe navi-   The ship had one hold completely destroyed by
gation. These ships are frequently in and out of     fire, and had to be re-built at the same cost as
port, often in heavy traffic. Officers’ qualifica-      building a new ship.
tion is another challenge. With the rapid expan-        Hull integrity is normally not a problem for
sion of the business, the best people are very       the container ship. Only one incident of a con-
much in demand. Simulator training for the           tainer ship breaking in two can be recalled,
biggest ships may not be available in time and       namely the MSC Carla, an old ship which had
numbers to cover the demand. The enormous            been lengthened. Container ships have always
windage and the mere size of these new big           been built with double sides, double bottom
ships may prove to be a challenge for both mas-      and each alternate bulkhead watertight. This is
ters and pilots.                                     because it is the best way of getting a box into
   Container fires have received a lot of press       a ship shape. It also gives a sound hull integrity
coverage in recent years. Huge fires have caused      design. The double hull is something the regu-
big ships to be abandoned and lost, like the         lators are seeking to introduce to large tankers
Hanshin Pennsylvania in December last year.          and bulk carriers, and it may still take many
The fires are often associated with problem car-      years before this becomes a common feature.
goes like calcium hypochlorite, an oxidising            The bow is an exposed area on the bigger
agent that will self ignite under given condi-       ships. The flare angle has continuously increased
tions. Extinguishing such fires can be a real         to values well above 45 degrees to increase the
problem as oxygen is released by the substance       number of deck containers. The deck cargo
when burning, making the fire self sustained.         and the ship size make it impossible to observe
A common strategy for fighting these fires has         the forward part of the ship from the bridge.
been to isolate the stack on fire with a flooding      That coupled with high speed makes it vulner-


                                                                                                          CONTAINER SHIP UPDATE 3 2004   13
                                    Container ship safety




                                    able to hull damage. This problem has been            last winter. But more research and attention to
                                    noticed by DNV on the big tankers since the           this problem may still be required. The DNV
                                    1970s, and rule formulations have been adapt-         AOG system will also give warning of parametric
                                    ed and adjusted over the years to cater for new       rolling.
                                    designs, to ensure that strong enough bows are            Side shell fatigue is damage that has been
                                    built. Still it remains a formidable task for the     brought to the attention of the industry over
                                    bridge watch to adjust speed and course to care       the last year. Severe cracking was discovered by
                                    for ship and cargo whilst maintaining a tight         German owners on Panamax designs after only
                                    schedule under varying weather conditions.            a few years in service. The problem is well
                                    Together with three container ship operators,         known from large tankers and bulk carriers, but
                                    DNV is currently testing an installation on the       had not yet been observed to any large extent
                                    bridge that will assist the master in his decision-   on container ships. Even though the technical
                                    making process. The ‘Active Operator Guid-            cause of the occurrence is somewhat different
                                    ance’ (AOG) aims at guiding the bridge watch          from tankers, the cure is much the same. With
                                    and assisting during navigation in heavy weather.     the increased use of high tensile steel, fatigue
                                       Parametric rolling has been the cause of very      issues must receive attention, as fatigue life for
                                    heavy losses of containers over the past few          all practical purposes is the same for mild steel
                                    years, of which the APL China seems to be the         and high tensile steel. So when the stress level is
                                    classic case. Parametric rolling may occur in         increased when using high tensile steel, atten-
                                    head seas with an unfavourable combination            tion must be paid to structural detail and stress
                                    of wave height, length and period in relation         concentration factors to maintain the same
                                    to the ship. Sudden extreme rolls may occur           fatigue life. The problem must be solved at the
                                    without warning, leading to container stacks          design stage. For ships already built and in
                                    toppling over, like dominos, causing severe           operation, fatigue life may be calculated retro-
                                    losses. Increased awareness among seafarers           spectively, and an inspection programme estab-
                                    seemed to have curbed the number of incidents         lished, paying attention to detail before the


14   CONTAINER SHIP UPDATE 3 2004
fatigue life expires. This will allow for budgets
and plans to be made and repairs to be carried
out in a controlled manner. The alternative may
be ship side cracks which, if occuring in a fuel
oil tank, may give rise to an embarrassing oil
spill in port resulting in immediate off-hire
and repair costs. Such unexpected incidents will
certainly have a higher cost than the planned
and organised repair.

Conclusion
Although the container ship is a safe ship type,
the rapid development of new bigger designs
and the increasing value of the cargo call for
a more proactive approach in order to deal
effectively with the hazards currently associated
with container ships. The industry as a whole
must focus on these issues and find suitable
solutions.

Knut.Dohlie@dnv.com




                                                    CONTAINER SHIP UPDATE 3 2004   15
Container market autumn 2004: continued boom




No summer slump in 2004
Until the beginning of August 2004 all indicators for the container market continued
their steep upward trend. The charter market reaches new all-time highs every week
with not a single small decline in the marketaverage.

The news from the demand side, namely            Again it has to be pointed out in this       eration and delay of planned orders.
the container ports, reflects the positive     context that container markets would be         Since the beginning of 2004, according
economic development at least in major        much quieter, not to say in a bad mood,         to Clarksonsan overall index, the level of
parts of the world and especially in Asia     without the China effect on demand.             building prices for container vessels has
and North America.                               Already in 2003 the Chinese ports            increased by about 44% and is now well
   The order activity for container ves-      handled about 70 m TEU – 23% of the             above the level of 1996 before the Asian
sels so far is almost as high as in 2003      global volume. Without the over-propor-         crisis. The main factor is the high steel
and the current orderbook equals about        tionate growth of container traffic from         cost.
44% of the existing fleet, a level that has    and to China during the past five years,
never been observed before. But new-          the global container handling market            Outlook
building prices have also increased           and also the transport demand would be          According to current economic fore-
sharply and it can be expected that this      11% less than it is today. This could not       casts, world production and trade are
will put the brakes on orders.                be and was not expected and very much           groving faster than expected only some
                                              helped to avoid the over capacity and           months ago. As a consequence a contin-
Charter Rates up 46% in 2004                  long lasting slump in the container mar-        uation of the present bullish container
The container charter market continues        ket that was forecast by many analysts          market at least for this and the coming
to establish new records every week. For      only two years ago.                             year is very likely.
about eight months the overall market
index of Howe Robinson (HRCI) showed          Almost 1 m TEU ordered
higher values each time it was published      According to Clarkson                                                          www.isl.org
and, with almost 1600 points in August,       Research order activity was
reached a level 46% above what was            still high 2004. Until the end
observed at the beginning of this year.       of July more than 290 vessels
Only for very few segments and short          with together about 974,000
periods was a slight decrease in rate         TEU of capacity had been
levels notified.                               ordered, raising the order-
   The highest rate increases were            book volume to more than
achieved in the medium size from 1,000        700 ships with 3 m TEU. This
to 1,700 TEU with a rise of up to 62%.        equals about 44% of the exist-
                                              ing fleet’s capacity – a level
China Effect on Demand                        that has never been observed
Now that the first six months of 2004          before.
are over, news on semi-annual container           Although the order activity
handling figures are being continuously        has slightly slowed down each
published. To date most of the ports          of the last three quarters the
show further upward trends and many of        calendar year’s order volume
them are reached two-digit growth rates       so far is only a little below the
compared with the first half of 2003.          level of July 2003.
Several ports in Europe, Asia and North           The reasons can be found
                                                                                                                                           Print: GAN Grafisk
America reported year-on-year growth          on the one hand in the yard
rates in excess of 15% for the first six       utilisation allowing only deliv-
months this year. Based on this it can be     ery dates in two years time or
expected that 2004 will be another very       later. On the other hand the
sound year for container transport            sharply rising newbuilding
                                                                                                                                           Design: DNVE Graphic Communications 0409-006




demand.                                       prices may induce a re-consid-



     DNV (Det Norske Veritas)        Container Ship Update             Please direct any enquiries to    Det Norske Veritas
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16    CONTAINER SHIP UPDATE 3 2004

				
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