For the third time Hamburg Messe und Congress has conducted a large-scale survey asking exhibitors and visitors of SMM, for decades the leading global trade fair for the maritime industry, to give their assessments of the sector’s economic and technological development. One year before the industry event in Hamburg, the SMM Maritime Industry Report (MIR) reflects the current mood among shipowners, shipyards and suppliers – and the mood is surprisingly good. A look at the results.
An industry on the go: After years of inaction, owners are ordering ships again. The demand for large container vessels is especially strong. According to the industry association BIMCO, as many as 381 newbuilds with a combined capacity of 3.44 million TEU have been ordered in 2021 to date – “a record high”, says BIMCO chief analyst Peter Sand. This upswing is reflected in the current SMM Maritime Industry Report (MIR). In this large-scale international study 39 per cent of shipowner managers expressed their intention to purchase new ships. In the previous survey in 2019, only 28 per cent had said so.
Shipowners feel the upsurge
Notably, “German shipowners are returning to the market: this is an extremely important signal for other players in the industry, including shipyards and suppliers”, explains Hauke Schlegel, Managing Director VDMA Marine Equipment and Systems. Just how important that signal is can be read from the Maritime Industry Score which mirrors the prevailing business expectations in the maritime industry. While the overall index remains just short of its 2019 level, scoring 55.8 points this year, the shipping segment is clearly delivering positive impetus, rising more than 20 points to 52.2. Shipbuilding has settled in at 45.6 points, while suppliers are somewhat less optimistic than in 2019 (65.6), now at 59.2 points.
“In view of the pandemic, including the supply disruptions and lockdowns, this is an amazingly positive mood indicator”, says Claus Ulrich Selbach, Business Unit Director – Maritime and Technology Fairs & Exhibitions at Hamburg Messe und Congress (HMC). He believes the growing willingness of shipowners to invest is a good sign for the next edition of the leading international maritime trade fair: “At SMM in September 2022, decision-makers will be able to see the entire spectrum of innovative products and technologies. Hamburg, the leading maritime hub, is where the music plays.”
Containers – boom; tankers – bust
Professor Max Johns of the Hamburg School of Business Administration (HSBA) is not surprised about the strong growth seen in the order book: “The demand for transport capacity can barely be satisfied. Around the world the supply chain is overstretched. Sustained high freight rates have been forecast even for 2022”, says the shipping expert. According to the SMM MIR, 62 per cent of shipowners expect freight rates to rise even further. But the optimism is not the same across all shipping segments: While the containership and bulk carrier markets are booming, the tanker segment is lagging far behind.
Shipyards: A mixed situation
All this directly affects the business expectations of shipyard managers: According to the SMM MIR, only 29 per cent are expecting to receive more orders for tankers (2019: 36 per cent). The picture is entirely different in the container segment, where 51per cent of responding shipyard managers are predicting further growth (2019: 18 per cent). The fact that German shipowners are buying once again is apparent in another figure: 15 per cent of responding shipyards see Germany as a top source of demand. This value has doubled since 2019.
A segment that has nearly come to a standstill is cruise ships, a dire consequence of the pandemic. 70per cent of respondents expect the ocean cruise ship newbuilding activity to stagnate or decline in the near future. Prior to the coronavirus pandemic, 57 per cent were expecting growth. This is especially consequential for European players such as Meyer Werft and Fincantieri. Nevertheless, both cruise ship specialists recently won orders for so-called residential vessels.
On the positive side, there is good news for naval shipbuilding and the general retrofitting market: The majority of shipbuilders are expecting a marked upturn for both.
Structural shifts among suppliers
Whether it is retrofitting or newbuilding, the supply industry is always on board. As in recent years, more than two thirds of respondents see high sales potential for their products. European companies in particular are among the global technology leaders in many disciplines.
Apart from engine technology and ship operating systems, interior outfitting is a major field of activity where one fourth of MIR survey participants specialise. Sadly, the downturn of the cruise industry has left its marks: “The coronavirus pandemic has had a pronounced negative impact on our company, especially in Europe”, says Thomas Töpfer, CEO of the ship interiors specialist R&M. “On the other hand, we perceive a certain structural shift. Our customers, the shipyards, are gradually accepting orders for different ship types, primarily smaller ones such as research vessels or mega yachts.” Jürgen Trost, CEO at Kaefer, a competitor, is not worried about the future: “I'm certain that this storm will pass and the cruise industry will pick up speed again.”
