The maritime sector is under tremendous pressure. Fewer goods are transported worldwide and cruise shipping has collapsed completely. New ships will hardly be needed for years to come.
Hamburg (dpa) - Shipyards and shipping in Germany and worldwide are facing a hard dry spell that could cost many companies their very existence.
The Association for Shipbuilding and Marine Engineering (VSM) announced on Tuesday in Hamburg that extremely low demand for ships of all types can be expected for a long time. The Association of German Shipowners (VDR) fears that the existence of significant parts of the German merchant fleet is at risk. At stake are tens of thousands of jobs in Germany.
After the financial crisis, German shipbuilders were able to disconnect from the global downward trend by successfully specializing in cruise ships, luxury yachts, ferries and special ships. While worldwide ship production has shrunk by 40 percent since the peak year of 2011, more and more orders have been placed with German and European shipyards. Around 95 percent of all cruise ships are built in Europe and the industry experienced a boom of many years. Even now, the European order book is enough for four years, which is significantly longer than in the Asian shipbuilding countries of China, Japan and Korea.
"However, it is to be expected that new orders in this segment will be completely absent for a few years," said VSM general manager Reinhard Lüken. Many companies will therefore run out of work. There are three to four years between the construction contract and delivery. Therefore, it is an opportunity to extend the construction time of the existing orders.
"The corona pandemic hits the industry in a phase in which incoming orders have been lower than production for years and global shipbuilding capacities are not fully utilized," said Lüken. The Asian competition is already reacting to the tense situation with further price reductions and high government subsidies. The World Trade Organization WTO is currently badly hit and not fully functional.
With the suppliers in the complex value chain, German shipbuilding represents around 200,000 jobs, said Lüken. In order to get over the order hole, the association is demanding to prefer contracts for ships to the public sector. In addition, a renewal program for the merchant fleet should be set up at European level in order to advance modern drive technologies and implement the climate targets of the industry. In this way, an uncontrolled damage to land in industry can be prevented.
Shipowners see their situation similarly dramatically. VDR sales in March and April fell by an average of 30 to 40 percent, the VDR said in Hamburg as a result of a survey of around 50 shipping companies, including the 30 largest German shipping companies. Almost half of them are already feeling a significant impact on their liquidity and charter rates for ships have dropped by up to 40 percent. Almost 500 ships worldwide are unemployed and therefore do not sail, more than ever before. Most German shipowners work similarly to car rental companies or leasing companies and only take care of the ships they charter to liner shipping companies.
"Substantial parts of the German merchant fleet are endangered," said VDR President Alfred Hartmann. In view of the foreseeable slump in world trade, the market situation is expected to worsen further. German shipping had already lost around 1,500 ships after the 2008/09 financial crisis, a third of the fleet. If production and consumption do not recover quickly, the consequences of the pandemic could become even more severe. If another third of the fleet were lost, tens of thousands of jobs in Germany would be endangered.
Shipowners and shipyards also expect the market to come back after a few years. "There will continue to be a global exchange of goods and cruise tourism will continue," said Lüken. World shipbuilding will shrink, that is clear. "We just don't want to shrink excessively." If that succeeds, German shipbuilding could emerge stronger from the crisis. Then more complex ships will probably be needed, a strength of the German location.
