Shipping market will remain robust until at least 2009
BTPublished February 22, 2006
DNV sees soft landing for shipping industry
It is confident shipping market will remain robust until at least 2009
By DONALD URQUHART
(SINGAPORE) Buoyed by two years of record new building activity and a booming energy sector, maritime and industrial risk management group Det Norske Veritas (DNV) is confident the shipping market will remain robust until at least 2009 as it develops a new focus on knowledge based services.
Mr Svensen: There's more interest among shipping companies to address fuel economy and energy efficiency
'We will see a softening in the container market in the next two years because of deliveries, but in general the market will be OK until 2009 or 2010,' Tor Svensen, chief operating officer of DNV Maritime, said.
'But then we come to a crossroads because the replacement of tankers will have taken place and we are also getting a lot of new capacity coming on stream from China and other countries, so capacity may be very high compared to demand,' he added. Mr Svensen says he is confident that barring any shocks to the world economy and continuing growth of China's economy, it should be a soft landing for the shipping industry.
The Oslo-based executive, who was in Singapore last week to celebrate the 25th anniversary of DNV Petroleum Services (DNVPS), said the group aims to increase its focus on its burgeoning consulting business.
'We have started increasing our efforts to utilise our competence in a more consultative capacity because we have a unique set of competencies in the organisation which we can help to improve the operational performance and try to make the technical processes in shipping companies more efficient,' he said.
In the case of DNVPS this includes a new service called Total Fuel Management Solutions which, according to DNVPS managing director Per Holmvang, takes the focus beyond simply fuel testing to knowledge-based risk management.
Working with other DNV departments, DNVPS is seeking to assist ship operators to optimise their fuel investments, manage the technical risks involved in consuming different types of fuels and comply with environmental regulations.
'This is what will differentiate DNVPS from our other competitors,' said Mr Svensen, adding that 'it's basically organising the knowledge in a more intelligent way and feeding it back to the owners and operators'.
One of the key areas that is generating interest is maximising fuel efficiency, particularly with fuel prices upwards of US$300 a tonne comprising as much as 50 per cent of a shipping line's operating costs.
'We are seeing considerable interest among shipping companies now to really address fuel economy and energy efficiency,' Mr Svensen said. 'If you can save 2, 3 or 4 per cent on fuel, you're saving a lot - it's money in the bank.'
Following the last major energy crisis in the late 1970s, the company did a significant amount of research on fuel economy, but the return of relatively cheap fuel saw that research shelved.
'But now we're taking it out again because it's still relevant even after so many years,' Mr Svensen said.
Currently DNVPS boasts a 70 per cent market share in fuel testing globally.
The maritime business which accounts for 35-40 per cent of DNV's business, and comprises largely of class-related activities, fuel testing and consulting services is expected to remain steady, buoyed by the ongoing surge in new building.
Currently DNV has about a 19 per cent share in new building classification, making it the world's No 2 in terms of gross tonnage - behind Japan's Class NK. Asia is set to remain the focus of the group's expansion plans as it builds up its presence in up-and-coming shipbuilding nations such as China, Vietnam and India. 'In China we have expanded very fast and it will certainly be our biggest base in the future' with nearly 400 employees currently from only a handful less than a decade ago.
The 400 staff cover maritime, oil and gas and industrial certification, with nearly half the number on the maritime side.
Mr Svensen said he expects an explosive growth in shipbuilding capacity once many of the shipyards currently located in cities are shifted out to new greenfield sites, which will increase capacity by a factor as much as 10 times.
Many of these will be on stream within the next five or six years, he added.
'China has the ambition and ability to take over as the major shipbuilding nation, but I'm sure Korea and Japan will fight back,' he said.
DNV sees soft landing for shipping industry
It is confident shipping market will remain robust until at least 2009
By DONALD URQUHART
(SINGAPORE) Buoyed by two years of record new building activity and a booming energy sector, maritime and industrial risk management group Det Norske Veritas (DNV) is confident the shipping market will remain robust until at least 2009 as it develops a new focus on knowledge based services.
Mr Svensen: There's more interest among shipping companies to address fuel economy and energy efficiency
'We will see a softening in the container market in the next two years because of deliveries, but in general the market will be OK until 2009 or 2010,' Tor Svensen, chief operating officer of DNV Maritime, said.
'But then we come to a crossroads because the replacement of tankers will have taken place and we are also getting a lot of new capacity coming on stream from China and other countries, so capacity may be very high compared to demand,' he added. Mr Svensen says he is confident that barring any shocks to the world economy and continuing growth of China's economy, it should be a soft landing for the shipping industry.
The Oslo-based executive, who was in Singapore last week to celebrate the 25th anniversary of DNV Petroleum Services (DNVPS), said the group aims to increase its focus on its burgeoning consulting business.
'We have started increasing our efforts to utilise our competence in a more consultative capacity because we have a unique set of competencies in the organisation which we can help to improve the operational performance and try to make the technical processes in shipping companies more efficient,' he said.
In the case of DNVPS this includes a new service called Total Fuel Management Solutions which, according to DNVPS managing director Per Holmvang, takes the focus beyond simply fuel testing to knowledge-based risk management.
Working with other DNV departments, DNVPS is seeking to assist ship operators to optimise their fuel investments, manage the technical risks involved in consuming different types of fuels and comply with environmental regulations.
'This is what will differentiate DNVPS from our other competitors,' said Mr Svensen, adding that 'it's basically organising the knowledge in a more intelligent way and feeding it back to the owners and operators'.
One of the key areas that is generating interest is maximising fuel efficiency, particularly with fuel prices upwards of US$300 a tonne comprising as much as 50 per cent of a shipping line's operating costs.
'We are seeing considerable interest among shipping companies now to really address fuel economy and energy efficiency,' Mr Svensen said. 'If you can save 2, 3 or 4 per cent on fuel, you're saving a lot - it's money in the bank.'
Following the last major energy crisis in the late 1970s, the company did a significant amount of research on fuel economy, but the return of relatively cheap fuel saw that research shelved.
'But now we're taking it out again because it's still relevant even after so many years,' Mr Svensen said.
Currently DNVPS boasts a 70 per cent market share in fuel testing globally.
The maritime business which accounts for 35-40 per cent of DNV's business, and comprises largely of class-related activities, fuel testing and consulting services is expected to remain steady, buoyed by the ongoing surge in new building.
Currently DNV has about a 19 per cent share in new building classification, making it the world's No 2 in terms of gross tonnage - behind Japan's Class NK. Asia is set to remain the focus of the group's expansion plans as it builds up its presence in up-and-coming shipbuilding nations such as China, Vietnam and India. 'In China we have expanded very fast and it will certainly be our biggest base in the future' with nearly 400 employees currently from only a handful less than a decade ago.
The 400 staff cover maritime, oil and gas and industrial certification, with nearly half the number on the maritime side.
Mr Svensen said he expects an explosive growth in shipbuilding capacity once many of the shipyards currently located in cities are shifted out to new greenfield sites, which will increase capacity by a factor as much as 10 times.
Many of these will be on stream within the next five or six years, he added.
'China has the ambition and ability to take over as the major shipbuilding nation, but I'm sure Korea and Japan will fight back,' he said.
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