The ship repair sector faced significant disruptions during most of 2020, as a result of the pandemic. However, things are starting to normalize as both owners and yards have adapted to the new challenges. In its latest weekly report, shipbroker Intermodal said that “assessing the ship repair sector during the first months of 2021, we have come across a new era in which owners chose the shipyards to repair their fleet based on new parameters compared to the past. Now, COVID restrictions are already adapted and absorbed. Owners are familiar with the raising difficulties and are prepared to manage them”, the shipbroker said.
According to Intermodal’s Mr. Vassilis Vassiliou from Interyards, “owners insist on keeping a very big variety of choices for their repairs in shipyards across the globe, which is assisting them to be protected from unforeseen COVID events. At the same time, they are making their final choice based on parameters which are different case by case. Some owners value travel restrictions first. They do want their office personnel to attend their drydocks. In those cases, they are avoiding areas where government approval should be granted for entering the country, and quarantine time are compulsory. The same applies for specialized projects, where a lot of overseas Service Engineers are required, prompt mobilization when new issues arise and risk for the unforeseen should be kept minimum”.
Vassiliou said that “shipping companies with big fleets have an advantage on those travel restrictions since they could maintain office personnel stationed abroad, where repairs are being carried out, saving quarantine time and travel costs for the superintendents. Other Owners, with more flexibility on who will attend their repairs and those with a relatively young fleet and reduced scope, are choosing based on the prices, vessel’s proximity to the yard, and best performance. Taking into consideration the improved freight for a specific type of vessels, minimum repair time counts, with the least risk of things getting out of control. From the shipyard’s perspective, those yards specialized in conversions and with a big backlog of projects postponed from previous months, are currently facing a busy schedule, while they are choosing their projects to fit their available slots and manpower”.
“Those are the shipyards less flexible on adjusting prices to the competition. On the other hand, Chinese shipyards, representing the most popular choice for ship repairs, are facing a relatively slack program. The main reason is that the Chinese government is very strict in accepting foreigners and therefore most of the repairs must be carried out without office representatives. This restriction is keeping away all the Owners with complicated repairs where a lot of overseas service engineers should attend and only a skeleton office personnel could travel. In addition to that, the lack of massive conversion projects, such as scrubber retrofits we had a year ago, also worsen the situation, since yards are hardly exceeding their capacities. As a result, Chinese shipyards have become more competitive, trying to attract as many projects as possible, boosting the competition further. For Owners this a good chance of getting good service at a low cost. Unfortunately, the bottom line is that with all the COVID restrictions in place, regulations, formalities, and quarantine time, there is a large amount of manpower for each ship repair wasted with superintendents, office reps, service engineers waiting for standby or in quarantine or canceled at last moment due to sudden changes. All of the above represent a big cost which instead of being invested on each ship is wasted unproductively”, Vassiliou concluded.
Source: Hellenic Shipping