In the years before the financial crisis and the recession that followed it, leading cruise shipping groups contracted new tonnage at a rate that had never been seen before - and it may indeed take a while before anything like that will happen in the future.
Right now, the orderbooks of shipbuilders like STX Europe and Fincantieri are thinning at a worrying rate, while Meyer Werft in Germany can enjoy a slightly longer spell of good workload thanks to contracts from Aida, Disney and Celebrity.
The current challenging economic climate will not last forever and there are strong signs coming from various parts of the world that indeed the worst should be over and leading economies should either have entered or enter to growth.
However, the cruise yards and a complex infrastructure of suppliers and contractors that complement the yards are facing tough times. While major business failures have been avoided so far, the conditions are becoming tougher almost by the day in the current drought of orders. There is little help to be expected from the cargo shipping sector - an excessive spree of orders has led to severe overcapacity in many sectors and owners are trying to cancel existing orders rather than to seek to place new ones.
It is vitally important that the infrastructure of yards, suppliers and contractors overcome the current lean times. Without that it will be very hard indeed to build a major cruise liner and it must take quite a bit of time and effort to re-establish such an infrastructure in case an existing network collapsed.
Therefore, some companies might do well for themselves and the industry as a whole by considering counter-cyclical ordering. Yes, freight volumes are low for ferry companies and ticket prices plus on board spending below the levels seen before 2007 in both ferry and cruise trades.
However, the cost of labour, equipment and raw materials must be well below those seen in the peak of the recent strong cycle. Interest rates are lower too and if companies can raise the required funding, they might save quite a bit of cash by ordering now rather than once a strong cycle is gathering momentum again with all its subsequent implications. Furthermore, delivery times of ships themselves plus vital components, such as main engines, which were very long only a couple of years ago, must be much shorter today.
A problem with shipping in general is the fact that it is cyclical to the extreme. The recent long, strong cycle led to a situation in which there were more than 11,000 ships of all types put together on order. some of the yards that were supposed to build them did not exist at the time and the downturn may well mean that many of them will not come into existence either.
So much the better: the world is not suffering from a shortage of ship building capacity. Combined with easy credit in those hectic pre-2007 days, excess shipbuilding capacity was in fact a major reason why the sector as a whole ended up in the mess in which it is today.
Passenger shipping, however, is very different. In the cruise industry, Carnival Corp & PLC alone controls about half of all beds on the market. Such degree of consolidation is unknown in other areas of shipping: Maersk Line only has 15% of the global container shipping capacity, by comparison.
In ferries, a couple of strong players usually share a market between them as these companies operate on regional rather than Europpe-wide let alone global level. Many ferries are old and ripe for recycling, so hopefully some owners will think outside of the box when it comes to ordering new tonnage and take up the counter-cyclical way.
Tuesday 13 October 2009
Tuesday 6 October 2009
Artemis - pioneering ship to change hands
P&O Cruises have sold their oldest ship, the 1984 built Artemis. At 44,588 gross tons, it is also the smallest unit in the fleet that will grow to seven units next year with the arrival of the 115,000 gross ton Azura in April - Artemis itself will continue to sail for the current operator until April 2011. That ship triggers mixed feelings when I think about its design concept and the execution of that concept.
When I took a cruise on Artemis in 2006, the ship did not impress. While the cabin accommodation was good, the ship's public rooms were just woefully inadequate to keep me happy for the 12 or so nights that I spent on board. There is a show lounge forward and a secondary lounge aft. In between a two-deck high atrium with a bar provided the only alternative to those two large, bland and boring principal public rooms on the same deck. The bar was cosy, but the seats so uncomfortable that relaxation was all but impossible.
An observation lounge at the foot of the funnel was slightly better, but even there a handrail was placed so that when I sat at a table close to the floor to ceiling windows, I could see the handrail rather than what was outside.
Although this is a personal opinion, and admittedly a rather unkind one towards the designers of the vessel, it is difficult to appreciate that way back in 1982 when the ship was ordered, it was hailed as the most forward looking cruise liner contracted so far.
The design itself was called All Outside Cabin or AOC for short - and created by a team of naval architects at the then Wartsila shipyards in Finland, which today are part of STX Europe. In previous designs, most cabins had been placed in the hull and thelowermost decks of the s uperstructure, while principal public spaces were located above these, together with a handful of luxury cabins.
In AOC, this was reversed upside down: cabins would go up and the principal public rooms find their way down, in case of Royal Princess as Artemis was first called, to the upermost deck in the hull. Consequently a quarter of the 600 or so cabins on the ship could have private balconies, an unprecedented figure.
AOC was first conceived as a 55,000 gross ton design, whose rounded strern bore striking resemblance to Song of America that Wartsila had delivered to Royal Caribbean in late 1982. Although the original design was never built, AOC set the benchmark for most cruise liners that have been built since then. A layout whereby a theatre is located forward, principal dining venue either aft on the same decks - or closer to midships on a lower deck - and a host of other public space in between these, usually on the uppermost deck in the hull and the one just above that, is the benchmark to which most cruise liners on order still today are built.
This demonstrates that the AOC concept itself was an excellent idea - indeed, it is tempting to guess whether the cruise industry could have staged the stellar rise it has enjoyed since the introduction of Royal Princess in 1984 and subsequent ships with lots of cabins with balconies had that concept not been introduced.
The early 1980s saw a flow of concept designs to flow from the offices of Wartsila. Sail Cruiser was a boutique sail cruise ship that emerged with Windstar, although the ships were built in France. SWATH or Small Waterplane Area Twin Hull used ideas from oil rigs and combined these with ones of the cruise industry, in 1992 a catamaran vessel called Radisson Diamond was built to this design. However, slow and with a deep draft, it was not a success.
Still, a feature from SWATH is now making headlines again: a large town square that cabin balconies face will be repeated in Oasis of the Seas and Allure of the Seas, the 225,000 gross ton giants of Royal Caribbean International.
AOC was an excellent concept, although Royal Princess / Artemis was not an impressive execution of that concept. SWATH has not been repeated since the single pioneer vessel that was anything but a success, but the town square part of the design may well become the next big think in cruise liner design.
And who knows, perhaps SWATH itself will get a second chance as a result!
When I took a cruise on Artemis in 2006, the ship did not impress. While the cabin accommodation was good, the ship's public rooms were just woefully inadequate to keep me happy for the 12 or so nights that I spent on board. There is a show lounge forward and a secondary lounge aft. In between a two-deck high atrium with a bar provided the only alternative to those two large, bland and boring principal public rooms on the same deck. The bar was cosy, but the seats so uncomfortable that relaxation was all but impossible.
An observation lounge at the foot of the funnel was slightly better, but even there a handrail was placed so that when I sat at a table close to the floor to ceiling windows, I could see the handrail rather than what was outside.
Although this is a personal opinion, and admittedly a rather unkind one towards the designers of the vessel, it is difficult to appreciate that way back in 1982 when the ship was ordered, it was hailed as the most forward looking cruise liner contracted so far.
The design itself was called All Outside Cabin or AOC for short - and created by a team of naval architects at the then Wartsila shipyards in Finland, which today are part of STX Europe. In previous designs, most cabins had been placed in the hull and thelowermost decks of the s uperstructure, while principal public spaces were located above these, together with a handful of luxury cabins.
In AOC, this was reversed upside down: cabins would go up and the principal public rooms find their way down, in case of Royal Princess as Artemis was first called, to the upermost deck in the hull. Consequently a quarter of the 600 or so cabins on the ship could have private balconies, an unprecedented figure.
AOC was first conceived as a 55,000 gross ton design, whose rounded strern bore striking resemblance to Song of America that Wartsila had delivered to Royal Caribbean in late 1982. Although the original design was never built, AOC set the benchmark for most cruise liners that have been built since then. A layout whereby a theatre is located forward, principal dining venue either aft on the same decks - or closer to midships on a lower deck - and a host of other public space in between these, usually on the uppermost deck in the hull and the one just above that, is the benchmark to which most cruise liners on order still today are built.
This demonstrates that the AOC concept itself was an excellent idea - indeed, it is tempting to guess whether the cruise industry could have staged the stellar rise it has enjoyed since the introduction of Royal Princess in 1984 and subsequent ships with lots of cabins with balconies had that concept not been introduced.
The early 1980s saw a flow of concept designs to flow from the offices of Wartsila. Sail Cruiser was a boutique sail cruise ship that emerged with Windstar, although the ships were built in France. SWATH or Small Waterplane Area Twin Hull used ideas from oil rigs and combined these with ones of the cruise industry, in 1992 a catamaran vessel called Radisson Diamond was built to this design. However, slow and with a deep draft, it was not a success.
Still, a feature from SWATH is now making headlines again: a large town square that cabin balconies face will be repeated in Oasis of the Seas and Allure of the Seas, the 225,000 gross ton giants of Royal Caribbean International.
AOC was an excellent concept, although Royal Princess / Artemis was not an impressive execution of that concept. SWATH has not been repeated since the single pioneer vessel that was anything but a success, but the town square part of the design may well become the next big think in cruise liner design.
And who knows, perhaps SWATH itself will get a second chance as a result!
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