Industry Insight: Did Shipyards Withhold Bunker Saving Technology Before the Slump?

Today's new generation of ships, the so called eco-ships, are said to provide significant cost savings through reduced bunker consumption thanks to an array of new designs and technologies.

And at a time when bunker bills account for as much as 70 percent of a vessel's daily operational cost, coupled with over capacity and rock bottom freight rates, the appeal of investing in such vessels has understandably been described by BIMCO as "compelling".

The introduction of these "must have" eco-ships comes at a time when shipyards are struggling for orders.

This fact has not gone unnoticed by some skeptics who suggest the savings are exaggerated and it's simply a PR exercise to help fill the yards' order books.

But if the eco-ships do offer real-world savings, and there's certainly evidence to say they do, then the timing of their introduction has led some to question whether shipyards simply, and deliberately, held back the bunker saving technologies now available today.

Hard Times

"In 2004 to 2008 when the shipping market was extremely good, eco-ships were not available. But all of a sudden when the ship building market collapsed, this new product came out," commented a delegate at the Connecticut Maritime Association (CMA)'s Shipping 2014 annual conference last week during a question and answer session on the matter.

The panel of speakers were asked if they thought shipyards already had eco-ship technology in their design portfolios during last decade's boom years, but only started to advertise the fact in 2010 after falling on hard times.

In a sense, did they cheat clients who ordered vessels before then?

"Its a very interesting question," said Dr Young Kee Chon, Chairman & CEO of the Korean Register of Shipping.

"I would rather think that from the shipbuilder's side they continuously develop the energy saving devices and systems and so on, so this was not the intention of the ship builders. They just continuously develop their technology to save fuel and raise energy efficiency."

"To what level they can develop it, and what time they announce their developments is totally up to the commercial situation I think."

Nothing New

Dr Gerd-Michael Würsig, Business Director, LNG Fuelled Ships, DNV GL, agreed with Young Kee's assessment, adding that some eco-ship technology was in fact not new at all.

Rather, he said that historically lower bunker prices meant that while the technology was available, it just didn't make financial sense to employ it before now.

Würsig pointed to "air-carpet" technology as an example, a system where air is blown out from the bottom of the vessel producing a "carpet" of small bubbles that cover the ship's underside, reducing friction between the hull and seawater.

"I have personally seen these bubbles around ships already, 15 years ago. It was the same companies that tried to advertise it even today," he said.

"The point is it's not only the shipyards but also with the owners, because before this time no owners were willing to pay for such an invention because the fuel prices were not [as high as they are today]."

"So maybe these eco-ships are related to owners who want to save costs, and shipyards who can now sell their innovations which were not sellable before."

So the answer, according to these industry players at least, is that while some of today's eco-ship technology was available before 2010, there was no foul play on the part of the shipyards.

Lower bunker prices and a buoyant market simply made it nonsensical for owners to pay for that technology before the recent slump.

CMA's next event, CMA Shipping 2015, will be held on March 23-25, 2015 at the Hilton Stamford Hotel, Connecticut.