EMEA News
German Shipowners: Eco-Shipping Demands Government Support
Given the potential for customers to switch to road transportation in the face of rising shipping costs, European leaders should provide support for carriers, Ralf Nagel, CEO of the German Shipowners' Association (VDR) told industry news site ShippingWatch.
"If the politicians in Brussels want European shipowners to act as pioneers regarding environmental standards and climate causes, they have to help the industry if they want it to survive in Europe," he said.
"That's why it's important to look at the possibilities of state support and other initiatives."
VDR has noted that a switch to land transport in the Baltic region could be a viable option for shippers as most vessels operating in the area begin burning low sulfur fuel, which costs 50 percent more than the fuel they currently use, to comply with new regulations.
Nagel said the German maritime industry is in the middle of a major change in ownership conditions as private equity investors enter a market that has historically been dominated by German owners and traditional banks or KG funds.
"The shipping business is experiencing one of its most severe crises in recent history," he said.
"This crisis is characterised by low charter rates, low freight rates and tonnage overcapacities over a long period of time.
"At the same time, the shipping industry's most important partners are withdrawing from the shipping business: banks that used to offer financing services for ships and shipbuilding have to cope with the shipping crisis as well as the aftermath of the financial crisis."
Niels G. Stolt-Nielsen, CEO of Norway's Stolt-Nielsen said in March that new private equity and hedge fund financing may support the addition of too much capacity to the shipping industry.
