8 items with the tag Trends

Slow steaming new paradigm in liner trade

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Slow steaming major impact on the liner industry is not well understood.

One leading marine analyst said recently in an article on the market that slow steaming is a murky concept: QUOTE "Roughly speaking, that means the industry is carrying 20% of spare capacity. This calculation of surplus can be fine-tuned by allowing for changes in tonne-miles and slow steaming. But, the former is a murky concept, since the globe does not get any bigger, and most ships are designed to go at 85% MCR, so the minute rates go up the fleet will no doubt speed up. UNQUOTE

Slow steaming existence in liner trade is simply based on the price of bunker vs. the price of ships. The extra costs by adding a ship to a rotation must be more than covered by the savings of bunkers for all the other ships of the rotation. And the higher the bunker the more likely slow steaming makes sense.

The additional capacity which is absorbed by slow steaming is a consequence, not the cause for slow steaming. Slow steaming is not there on temporary basis, it is there to stay, and the world liner fleet will not speed up until the bunker savings vs. ship price equation change, which is unlikely when there is too much capacity .

The fact that ship engines are designed to run at 85% MCR is neither a reason for slow steaming to stop. The engine system might not be optimized below 60% MCR, however manufacturers have found ways to circumvent the technical drawbacks (lower air flow, poor combustion, increased fouling and corrosion…etc.) and even guarantee a safe operation as low as 10% MCR.

On the biggest 2 strokes engines, going down from full speed to 18 kts reduce fuel consumption by 75%, or bunkers actually represent more than 50% of shipping lines fixed costs.

Slow steaming is likely creating a new paradigm for liner shipping, as new ships being optimized for lower speed; provide higher bunker savings which translate into a slot cost advantage.

Managing capacity will remain high on the agenda for some years as ship owners will have no choice but to order new ships to remain competitive in an Industry guided by economy of scale. Maersk line returns to profitability clearly show how important it is to have the lowest cost.

And unless the industry and the world economy recover quickly, old inefficient ships might not find a fixture. This is a serious risk for all ship owning funds and definitely for the German KG since Germany ten top banks have USD 128 Billion in outstanding credits related to the global shipping industry. That is more than double the value of their holdings of government debt from Greece, Ireland, Italy, Portugal and Spain.

See the article on http://www.oceotrade.com/-rubrique38-

LNG Fuel cells

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Can fuel cells powered by LNG be used for ships propulsion?

The short answer is not before many years, as the technology for large power storage battery is not yet available. Below please find an interesting article from Marex on the subject.

To the best of my knowledge the mentioned min 200 KWH battery required for ship propulsion seems to be underestimated for commercial ships. Existing commercial diesel-electric prop ships require between 14 MW (I.e. support vessel LOA 130m, 6,8 K DWT) to 50 MW for larger cruise ships (i.e cruise ship LOA 253m, 8K DWT), thereby a total of 70 to 250 battery would be require to impove the efficiency as mentioned in the article.

Look forward to hear your opinions and any additional information you might have on the subject.

http://www.maritime-executive.com/article/tired-of-talking-green-burning-lng-could-be-just-the-beginning


View online : Marex article on lng fuel cells:

LNG propulsion

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Will shipping enter a new age and become sustainable with LNG propulsion?
My SWOT analysis.

Many studies are published nowadays predicting a new age for shipping. With LNG, shipping would be able to meet the new and future IMO emissions restrictions rules and become sustainable.

LNG is not only environmental friendly; it is also the cheapest fuel available, and this trend is likely to continue due to global reserves. Since Fuel costs represent the majority of shipping lines fixed costs, it seems a no brainer for shipping lines to switch to LNG, reap major savings and obtain an amazing competitive advantage.

At the end of this discussion you will find a link to a very interesting and complete presentation from Wartsila R&D Director dated from 2008, however still very relevant.

To facilitate reading, here is my SWOT analysis on the LNG. In short, you will see that LNG applications are still limited due to space and power constraints. So far LNG only apply to medium speed engines and therefore to small short sea units (ferry, supply, tug, except LNG tanker) , moreover the space required to store the LNG is 4 times bigger, which is at the expense of commercial space, and prevent good payback.

Strengths
• Main competitive advantage: Lower fuel costs per ton vs. even HFO (same energy content), lower energy consumption (less overall power needed i.e. no need to heat fuel) and lower maintenance costs (machinery)
• Environmentally friendly, cleaner emissions: No Sox, 85% lower Nox, 30% lower CO2
• Higher engine efficiency than HFO engines (+10%)
• Best sustainable shipping solution

Weakness
• Space for tanks (4 times HFO) main factor limiting application as taking cargo space
• Limited power output. Propulsion only for small units and short sea (ferry, tugs, feeders), except LNG tankers.
• For all other vessel type application so far limited to aux power, eventually quick coastal navigation within IMO emission restrictions zones (payback vs. MDO)
Unburned methane being 30 times more potent grenhouse gaz than CO2
• Investment cost, clarity on payback time since it depends on LNG cost developments
• Restrictive availability/supply and bunkering rules in many ports

Opportunity
• Future tank development reducing space needed
• Two strokes slow engine ongoing developments (Wartsila RT-Flex50 )
• Ship to ship transfer for bunkering
• Increase pressure from society for clean air
• Increase commercial pressure from customers for clean ships/operations
• Further improvement in engines efficiency

Threats
• Lack of supply infrastructure?
• LNG price development?
• Long term global economic recession

Wartsila presentation can be found here: http://www.dieselduck.ca/library/05%20environmental/2008%20Wartsila%20propulsion%20alternatives.pdf


View online : Wartsila presentation can be found here:

Bio crude oil

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The race to find sustainable energy that would be dense enough for transport is on-going.

So far, all the other types of energy than fossil fuels are not dense enough to move heavy weight over a long distance and with a limited consumption, therefore storage space. Currently, there is no other fuel with this extraordinary energy density. The main challenge is that fossil fuels give off CO2 during combustion with a serious effect on our environment. This is the same CO2 that was captured millions of years ago by plants for their photosynthesis with solar energy.

Using phytoplankton, CO2 from industrial emissions and solar energy, BFS is able to accelerate photosynthetic transfer process via catalysers and effectively produce bio crude oil.

The beauty of that new technology is that not only they create bio crude oil with high energy density that does not use crop/land like actual bio fuels (at the expense of food production), but in addition they manage to consume more CO2 in the process than the combustion will ever release, thereby helping to reduce global warming.

According to the site, the net balance is actually 937.85 kg of CO2 per barrel (including the vehicle’s combustion gases) that is definitely neutralized from human-created emissions into the atmosphere. It means the process consume approximately twice more CO2 than the CO2 released for every barrel we produce today.

Whereas this new technology seems very promising, the cost of production will really determine its success, as well as the required productivity improvement since today they can only produce 5 barrels a day per hectare.

The link can be found here: http://www.biopetroleo.com/english/bfs/


View online : bio phytoplankton crude oil site:

Bio fuel from platic waste

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An interesting existing technology is the ability to produce crude oil from plastic waste. This technology can recycle any type of plastic, even old and dirty ones. The plastic is crushed, and then warm up to be transform into gaz. Afterwards, it is cool down in water and the separated oil can be recovered at the surface.

According to company Agilyx (there are competitors: Cymar & Vadxx energy) more than 75% of the initial weight is converted to crude oil in the process. And with 10 tons of plastic, they can produce 40 barrels net (10 barrels are used in the process). The world plastic waste annual production can be estimated around 280 million tons, so it means a potential of 70 million barrel recycled in a year, without using the existing plastic waste.

A pwpt can be found here: http://www.agilyx.com/pdf/Agilyx-Brochure-09072012.pdf


View online : Agilyx presentation

Clarkson World shipping market

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Very interesting and informative presentation on the world shipping market status in 2012. This presentation was performed at the 2012 SMM international forum by Dr Martin Stopford head of Clarkson.

The presentation is so clear that no comment are required.

The presentation can be found there:
http://smm-hamburg.de/uploads/media/Presentation_Martin_Stopford.pdf

And his speech here: http://smm-hamburg.de/uploads/media/Speech_Martin_Stopford.pdf


View online : Presentation

Potential Future Technologies

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DNV looks at future technologies in four main areas: shipping, fossil energy, renewable and nuclear energy, and power systems. From global mega trends, DNV determine 4 scenarios to select the technologies that might become a must in 2020.

For shipping, most selected technologies are not new and have been on the map for some time or are even in use already. The part on the digital ship is not forward looking as it has been in use for more than a decade. Some technology are very relevant, others seems anecdotic (kite, cold ironing…etc.). Not surprisingly, the part on new ways of designing ships is catchier, being DNV core expertise.

The main challenges for each technology are well identified, however one would have expected that they look at an estimated economic value vs. cost (also taking into account commercial impact) to determine the success probability of each technology.
That being said, some of the chosen technologies also happen to be the ones having most potential for saving fuel oil (combined electric & diesel propulsion, solar power, air lubrication, LNG …etc.), which is without doubt the main element for any future technology.
No mention of flettner rotors, catalysts or hull cleaning tracking device which also have high potential to save fuel.

In any case, it remains a very interesting and professional document for anybody interesting in the future of ships.

The report can be found there: http://www.dnv.lt/binaries/TO2020_tcm173-477946.pdf


View online : The report can be found there:

Fuel efficiency

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Maritime technologies fuel efficiency quick guide

The Shipping Efficiency Clean Tech Guide gives an easy to digest scope of the emission reduction technologies available and their associated fuel saving potential.

This is a simplified but comprehensive reference tool to enable rapid assessment of the fuel saving percentages of the main ship efficiency technologies. To be taken with caution, as no doubt some technology potential seems to be over estimated, like solar for instance.

Nevertheless, a useful document to make sense on technology development likelihood (since fuel represent the main part of shipping lines fixed cost), fuel savings being the main driver for any future development.

http://shippingefficiency.org/userfiles/files/Clean-Tech.pdf