Container Update 1-2012 by DNV GL (old account)

APL – introducing the most efficient Ultra Large Container Ships

Rickmers – On-board staff are the principal performers

The Danaos Corporation – Creating a global leader in container shipping

container ship update

News from DNV to the container ship industry

No 01 2012

SMM ED N O

ITI

contents

04 APL – introducing the most efficient Ultra Large Container Ships ››

Rickmers Shipmanagement – On-board staff are the principal performers ››

Creating a global leader in container shipping – the Danaos Corporation ››

Front page: iStockphoto

container ship update APL – introducing the most efFIcient Ultra Large Container Ships.................................................... 4 Managing in a volatile market................................................ 8 A diversiFIed fleet1�� 10 Going beyond the 18,000 TEU mark – is it possible?............. 12 What is the optimum speed for a 20kTEU container ship?.......................................................................... 15 Maritime Labour Convention................................................ 17

We welcome your thoughts! Published by DNV Maritime and Oil & Gas, Market Communications. Editorial committee: Jost Bergmann, Container Ship Business Director Knut Døhlie, Associate Editor Magne A. Røe, Editor Lisbeth Aamodt, Production

On-board staff are the principal performers.................... 18

Design and layout: Coor Media 1206-040

In need of new designs............................................................. 20

Front cover photo: Getty Images

the Danaos Corporation........................................................ 22

Please direct any enquiries to DNVUpdates@dnv.com

HYUNDAI SPEED 13,100 TEU........................................................... 26

Online edition of container ship update: www.dnv.com/containershipupdate

LNG is the future....................................................................... 28 Large LNG-fuelled container ship granted approval in principle............................................... 30 What would a future Baltic feeder design look like?... 32 DNV Fuel Saving Guideline gets top score.......................... 36 Ten years old and still going strong................................. 37 THE SEEMP – why, what and how?............................................ 38 Re-evaluating ship FInance risk models4�� 40

2 | container ship update NO. 1 2012

DNV (Det Norske Veritas AS) NO-1322 Høvik, Norway Tel: +47 67 57 99 00 Fax: +47 67 57 99 11 © Det Norske Veritas AS www.dnv.com

editorial

Jost Bergmann Container Ship Business Director Jost.Bergmann@dnv.com Name Surname Title mail address

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Challenging times – creative solutions

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We are in the midst of challenging times, with the constant threats of tonnage oversupply and rising bunker costs. Far too often, there are reports of idle ships and financial difficulties. Some owners see opportunities in this situation, but newbuild orders are hard to finance even for the most creative companies. Influential sources indicate that this situation is likely to remain the same for some time to come. So what are the options? In this issue, we bring you the interesting viewpoints of some influential people in the industry. Common for all is the importance of the people on board. Having the right people with the p roper qualifications on the job is a prerequisite for good results in challenging times. DNV’s Gerd Würzig looks to the future. He is our LNG-as-fuel specialist and presents some interesting perspectives. It is not a question of if, but of when, LNG will become a significant fuel for propulsion. It is a matter of timing your choices and understanding the business opportunities. What about the big ships? Will we see designs going beyond the 18k mark? We look at some new ideas that have been put forward, and at what has been presented in the past. In DNV, we believe that the creative application of technology is the answer in difficult times like these. We like to present our ideas to the industry and do so all the time. We will in particular do so at the forthcoming SMM in September, where we will present how DNV has helped leading ship owners and shipyards reduce the fuel consumption of big container ship newbuilds. I hope to meet you there.

container ship update NO. 1 2012 |

APL

››

APL Chongging

4 | container ship update NO. 1 2012

APL

APL – introducing the most efﬁcient Ultra Large Container Ships Singaporean container line APL is preparing to introduce a series of ten innovative Ultra Large Container Ships (ULCS) on its Far East to Europe route. The ships are optimised for their expected future operating profile and will consume considerably less fuel oil than present ships in the same size class. The design was optimised in a joint effort between the owners, Korean builder Hyundai Heavy Industries, and Det Norske Veritas (DNV). TEXT: Jost Bergmann, DNV

When APL decided to order Ultra Large Container Ships in 2011, it was a clear goal right from the start that these ships were to be the most efficient in the world once they were taken into operation. Inspired by DNV’s QUANTUM study, published in 2010, in which the opportunities to design for operating conditions were outlined for the first time in the industry, APL invited tenders from seven shipyards in both Korea and Japan. The invitations to tender requested not only a normal-specification ship design but also the expected performance data of the offered design, covering a possible speed and draft range. This allowed APL to select a design not only from a technical and commercial point of view but also based on the ship’s future performance under operating conditions. In addition, APL agreed with the shipyard, HHI, which was finally selected for this newbuilding project, that further design-optimisation measures had to be taken even after the contract was signed. One of the key areas looked into in this respect was the adaptation of the hull lines to the future operating profile.

relatively high speeds – larger container ships normally for 25kn or more. Designers and owners paid full attention to what the performance would be at contract conditions, which were normally design speed and design draft. The design condition determined key features like the hull form, rudder and propeller design as well as size of the main engine, including capacities and the layout of auxiliary systems. Very

little attention was usually paid to the ship’s performance at “off-design” conditions at reduced speed and/or reduced draft. Challenges of operating at “offdesign” conditions However, in the present and expected future market conditions, container ships are mostly operating at these “off-design” conditions, not least

››

Figure 1: Example of an operating profile.

Paradigm change in container ship design In the past, container ships were normally designed and built for

container ship update NO. 1 2012 |

APL

Operating profile In order to avoid these disadvantages, future container ship newbuildings need to be optimised for a range of speed/draft conditions which are most likely to occur during later operations. In a joint workshop, APL and DNV analysed the past and current trading conditions of the present APL ships on the Far East to North Europe trade. Based on this analysis as well as expert interviews within the APL organisation, the possible future operating profile for 13,800

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››

Figure 2: Visualisation of calculated wave pattern

25%

20%

15%

17.5%

16.8%

10.7%

12.2%

9.7%

21.7%

23.3%

10%

17.5%

Performance improvement

due to slow steaming and the varying utilisation of the ships’ deadweight due to dynamics in the trades. What are the typical consequences of operating container vessels at off-design conditions? ■■ Hull – increased resistance due to e.g. –– An emerging bulbous bow, creating adverse wave systems or even breaking waves –– Flow separation, creating additional drag ■■ Propeller – reduced efficiency due to e.g. –– Worse inflow to the propeller creating uneven loading, cavitation and other losses –– Sub-optimal loading of propeller and blades –– Underperforming wake field creating additional drag ■■ Main engine – reduced efficiency due to e.g. –– An over-dimensioned engine operating at sub-optimal conditions leading to higher specific and total fuel oil consumption –– Low load operation may lead to insufficient performance of turbo chargers so that auxiliary blowers may have to be used – consuming additional fuel and creating additional maintenance ■■ Auxiliary systems – reduced efficiency due to e.g. –– Over-dimensioned cooling and lube oil system may have to be throttled –– Auxiliary boiler, shaft generator, waste heat recovery system, etc, may not be fully utilised due to too low load

Speed/draft combinations

››

Figure 4: Hull performance improvements for different draft/speed conditions

TEU container ships was predicted. The expected speed is in the range of 15kn to 19.5kn and the expected draft is in the range of 11 m to 14.5 m. The top speed for these ships will be about 23kn. Finally, nine speed/draft combinations were identified and time ratios were estimated with regard to how often these conditions will appear. Hull-line optimisation The purpose of hull-line optimisation is to find a hull form with minimum resistance that requires the least propulsion for the future

operating conditions established in the operating profile. The hull-line optimisation was carried out by experienced engineers using advanced Computational Fluid Dynamics (CFD) tools. In order to cater for both linear and non-linear effects like breaking waves, it was decided to deploy fully 3D RANSE (Reynolds-Averaged Navier-Stokes Equations) methodology solvers. HHI and DNV used the “WAVIS” and “Star-CCM+” software tools for this purpose. As a starting point, an electronic 3D

APL

the pros and cons of the two options were discussed at a joint workshop with a representative of APL. Finally, the owners opted for a version giving an extra improvement in propulsion efficiency despite of a little less container intake. The main modifications have been to the design of the bulbous bow and hull lines in the forward part of the ship.

Figure 3: Distribution of hull pressure in the initial and final hull forms

60000 55000 50000 45000 40000 35000 30000 25000 20000 15000 10000 5000 0 -5000 -10000

CFD

Model test

18%

Difference PD [%]

15% 12% 9% 6% 0.81%

-1.38

0.45%

-2.28%

-0.56%

2.32%

0.60%

1.88%

Difference [%]

Delivery Power PD [kW]

››

16% fuel saving For a speed range of between 15kn and 18kn, the fuel efficiency per TEU of the future APL design will be 20% to 30% better than that of existing designs. For the nine operating profile conditions, the required propulsion power could be reduced by about 16% on average. This corresponds to annual fuel oil savings of about USD 3 million per ship, assuming USD 700/t fuel oil costs and 280 sailing days.

3% 0%

-3%

Speed/draft combinations

››

Figure 5: Comparison between the CFD analysis and model tests

geometric model based on the initial hull form needs to be generated. The model’s performance is then analysed by conducting “virtual tank tests” at the speed and draft conditions stated in the operating profile. By evaluating the required propulsion power in combination with the virtual wave pattern and the pressure distribution along the hull areas, measures can be identified and used to reduce the resistance for each of the conditions. Modifications of the hull shape need to be considered in a holistic

way because what is beneficial for one condition may be adverse to another one. After the identified modifications have been implemented by changing the shape of the 3D geometric model, the testing needs to be repeated in order to compare whether and by how much the performance has improved. Based on an initial hull form suggested by HHI, the yard and DNV experts each proposed how the lines could be modified in order to improve efficiency with a focus on the targeted operating profile. Both

Validation The results of the CFD analysis were verified by model tests carried out in the Hyundai Maritime Research Institute model basin during September 2011. The maximum difference identified between the calculated and tested speed/draft conditions was in average less than 2%. The final verification will be carried out during sea trials to be held in 2013 when the first vessel is delivered. Based on the reduced power demand for the optimised hull form, the main engine output and propeller design as well as the performance of the auxiliary systems could be optimised, further improving the energy efficiency of the newbuildings. New way of cooperation The design optimisation process for this series of ship represents a new way of cooperation between the owners, yard and class society and is expected to be the “new norm” in the future. These newbuildings will support APL’s strategy of being a commercially successful and environmentally sustainable company, demonstrate HHI’s capacities as the world’s largest shipbuilder and show the extra value that class society DNV can bring to its customers. 

container ship update NO. 1 2012 |

Bernhard Schulte

Managing in a volatile market Managing a global fleet out of a German location is a must for Bernhard Schulte Shipmanagement in order to be a part of the German tonnage tax regime as well as the well-known KG financing schemes, which give tax incentives to investors. Schulte is the world’s largest family-owned ship management company. Text: Magne A. Røe, DNV

Photo: Magne A. Røe

Bernhard Schulte ShipThe container market is management handles the depressed? full management of an “This is true. There was impressive 320 ships and a bit of an upswing in the crew management of the bigger and smaller 600 ships, making it the container ship market third-largest ship managsegments earlier this er in the world. The Geryear but at present the man arm of Schulte Shipmarket is depressed – management handles the and the sentiment is full management of 45 also far away from being ships and the crew mangood. This is a market agement of 140 ships. At where it is essential to the company’s German be able to offer the right ›› Jan Warmke, Managing Director of Bernhard Schulte (left) and André Delau, Director of Marine Operations. branch office – being tonnage at the right one of eight so called time. In the container “Service Delivery Centers” worldwide – feeder market, for instance, a shallow draft for all kinds of ships to be delivered, overlooking the busy port of Hamburg, is as important as speed and consumption and that constitutes a problem. We manwe are greeted by Jan Warmke, Managing characteristics. In the bigger segments to age most sorts of ships and the markets Director, and André Delau, Director of the contrary we see a great importance of are poor for any of the ship segments at Marine Operations. fuel efficiency on account of high bunker present. On a more optimistic note, we prices.” expect there to be a turnaround in 2013 The market can only be described as and 2014 unless there is another global quite volatile. How does that impact you? How do you manage your fleet on a daily economic crisis or more dumping of basis? newbuilding prices. If the market doesn’t “The German KG model has worked very “We have some 120 people working here improve over the next 12 months, several well in the past and up to the financial in Hamburg doing the entire ship manageship management companies will get crisis starting some four years ago. After ment job, ranging from crew management into serious trouble. The Euro crisis, the this, the ride has been more like a roller to operations, accounting, controlling, all US economy and the result of the US coaster for us,” says Warmke. Of course divided along the general lines of dry or presidential elections later this autumn it was and still is hard for us to go to wet cargo into two fleet teams. To be part will also impact the market one way or KG shareholders and ask for additional of the German tonnage tax regime, we also the other. Of our entire fleet, about half capital to run the KG, but on account of must have all officers and engineers hired run on long-term time charters and the the economical surrounding there was from Germany, so we need a quite big other half are in the spot market, makno other option than to do so. There is a office staff to run our operations. All our ing us somewhat exposed to market tonnage oversupply in a global perspecoperations are integrated and, as we have fluctuations.” tive and there is still a large orderbook

8 | container ship update NO. 1 2012

Photo: Bernhard Schulte Shipmanagement

Bernhard Schulte

››

Friedrich Schulte

run this as a family business since 1883, our tradition is one of our core strengths. The Schulte family is still fully committed to continuing to develop Bernhard Schulte Shipmanagement in the future. Not much has changed in that respect,” says Warmke, who is hoping for world GDP growth beyond the three per cent predicted, as that will easily translate into more demand for the transport of goods across oceans. “The ships we manage are all sizes, ranging from small container feeders to the post-Panamax size. Having been in the container shipping market for more than 25 years, we know the ins and outs of this market and can act accordingly. The bigger problem for the future will be to find ship’s crew, especially officers – there are too many ships and too few officers and crew available.”

Fuel efficiency and all related matters must surely be of importance to you? “True,” says Delau, “but the main reason for the market being rather healthy is that we slow steam container ships – or even super slow steam at speeds down to thirteen to fourteen knots. For a ship designed to operate at 24 knots, this is of course very slow. We are all becoming experts in efficiency, running container ships at optimum speed, trim and weather routing. We have a special task to continuously improving fuel efficiency, and use our internal resources for this important work. The slow steaming is causing great headaches, however, but the ships provide enough flexibility to satisfy the needs of charterers in terms of being at the right port at the right time. We save huge amounts of fuel and keep the fleet engaged. So here the

industry has been able to adapt to changing times. But this does not come without some engine problems, as the slow speeds have a tendency to clog up the exhaust system, for instance. We monitor fuel performance on a continuous basis, but we are also building up our database on older ships that are now having to operate at slower speeds than they are designed for. Speeds slower than 16 knots create problems, so we are testing this all the time during operations to gain experience. Installing costly scrubbers, slide valves etc. are not really a viable alternative as the KGs are in need of cash just to survive.” 

container ship update NO. 1 2012 |

Hansa Treuhand

A diversiﬁed fleet Hansa Treuhand Holding AG is a diversified group that operates and owns Sea Cloud Cruises as well as leasing out passenger air planes, in particular the new Airbus 380. Its headquarters are beautifully located overlooking Hamburg’s outer lake, the Aussenalster, in an office building that gives the impression of traditions coupled with contemporary business life. Text: Magne A. Røe, DNV

CSCC Group as well as private yards with a proven track record like Jiangsu Yangzhijiang and others and this has worked out so well that we would definitely consider Chinese yards again. “We ordered some wide-beam container ships in 2011 as these are more economical to operate. These ships are made for a top speed of 22 knots and their service speed is typically 18 knots.”

Fleet profile “Our policy is to cover all the relevant sizes in the liquid container ship chartering segment by having a diversified fleet. This is part of our risk management strategy and means we can satisfy various market needs in line with the current market trends. This year, we have had only one ship delivered, while another eight will enter service over the next two years. Our customers are mostly the big liner operators such as Maersk, CMA CGM, Evergreen, Hapag Lloyd, China Shipping and COSCO, to mention a few. Our ships trade worldwide in feeder as well as main haul services. These ship sizes also lend themselves very well to spotmarket operations. We’re not comfortable operating in the very large container ship segment above some 10,000 TEU as charters for these vessels are generally for very long periods and are less driven by the market and more by financing needs, which might produce rather marginal returns,” says Bartels.

10 | container ship update NO. 1 2012

Photo: Magne A. Røe

However, we are only here to discuss Hansa Treuhand’s container shipping business, which comprises by far the larger part of the group’s operations, encompassing a total of 67 vessels. The in-house ship management arm, Hansa Shipping GmbH & Co. KG, manages 29 of these ships, ranging from 1,300 to 5,500 TEU. Hansa Shipping also has eight newbuildings on order from China, ranging from 4,800 TEU to 7,000 TEU. “We’re not putting all our eggs in one basket,” says Jan Bartels, Chief Operating Officer, underlining the importance of having a diversified fleet.

››

Jan Bartels, COO, pictured on top of the Hansa Treuhand office building with the city of Hamburg skyline as a backdrop.

Trends and new ships “The market was up during the first half of last year before slowly worsening towards the end of the year,” he adds. “This year has seen a further decline in the charter rates and the market is currently experiencing further pressure due to a growing number of laid-up ships. However, in certain sizes, a bottom building in charter rates can be experienced despite the growing number of laid up vessels. We expect that, as the container market matures over the next few years, we will have to get used to further volatility in charter rates.” “Still, we will soon have deliveries from China. It can be rather challenging to build in China and some yards have a steep learning curve to go through. For us, building in China has worked out so far. We’ve placed orders with the state-controlled

Company structure and crew “We operate in a classical way and have purchasing, ISM, ISPS, operations, crewing and technical departments, including our own newbuilding supervision personnel. One of the biggest challenges facing the company’s operations is getting qualified crew to return. 2007 in particular was a tough year in this regard. Since then, conditions have eased and we have seen great company loyalty among the crew over the years. Crew retention is generally speaking quite good within the German shipowning community. However, we also put particular focus on training our commercial shore staff. We normally have some six to eight trainees working at Hansa Shipping. It’s quite difficult to get a trainee position with us as we only take in three to four people each year, sometimes even fewer . We divide the training into sections, but try to make sure that the trainees gain practical experience in all aspects of a modern ship management company. In addition to our in-house departments like operations, ISM, technical management, purchasing and S+P brokerage, we also have exchange programmes with other companies offering, for example, chartering and insurance. Much of the

››

HS Oceano

training is naturally done here in Hamburg, but we have sent a number of trainees off to experience life on board ship for a short time as well,” says Bartels. Scheduling and design “We’ve made the necessary modifications to our fleet, enabling us to slow steam and super slow steam to meet scheduling requirements. Most of Hansa Shipping’s ships were built between 2000 and 2010, so we need to consider how to optimise them for the new scheduling and slow-steaming reality. We must stay competitive but not only with regard to fuel consumption, we must also find new ways to increase our reefer capacity. “As I mentioned, we’ve ordered widebeam ships that are designed for the new Panama Canal. These will be more stable as they are wider and their engines will not be as high powered. There is a difference in the 14t homogenous intake of a standard ship and a wide-beam vessel that adds up to 500 TEU more in favour of the wide-beam ship. The length of the ship can also usually be reduced to 250 metres, thus taking up less berth space. The advantage to charterers of this design is the increased revenue as well as the lower fuel consumption. This

Photo: Hansa Treuhand

Hansa Treuhand

››

HS Chopin

combination gives environmental advantages as well as an improved bottom line. We try to be as innovative as we can.” Environmental “The challenge is not the regulations themselves, but the solutions offered by the industry to comply with them. For instance, when it comes to scrubbers and ballast water, the solutions will very likely be ready when needed and will be implemented. But some political assistance on dealing with the older ships would be welcome. There is a strong trend towards scrapping ships built before 1997 and some 91 ships have been scrapped so far this year. In 2009, no fewer than 134 ships were scrapped. The same solution could be implemented for the existing fleet, i.e. more scrapping to reduce the oversupply – that would solve the problem. Today, slow steaming is used in an attempt to balance supply and demand. Of course, this has advantages for the environment. The environment and fuel efficiency always constitute challenges and it’s important to obtain reliable information. Today, there is the matrix of speed and consumption and we’re constantly monitoring performance. Another way of improving, of course, is sensible cargo

stowage, which is done by the charterer. In addition to the environmental effect, we must not forget it is also about money. Three per cent improvements here, three per cent improvements there, it all adds up,” adds Bartels. Equity “The equity market constitutes a problem these days and may do so for a few more years. The banks are trying to reduce their current ship portfolios and this means that financing is a bottleneck, as less capital is available for new projects. On the positive side, this will reduce the number of newbuildings and result in a more balanced market. There are many good offers from yards these days, but very few within the industry should place orders yet, partly due to the current financial restraints.” Expectations regarding class “We profit from DNV’s overall experience and our expectations are met. From an owner’s point of view, there is constructive problem-solving and a fast response time. On the technology side, we’ve initiated several discussions with DNV and their technological expertise is most helpful. We feel comfortable with DNV,” concludes Bartels. 

container ship update NO. 1 2012 |

Ultra large container ship designs

Going beyond the 18,000 TEU mark – is it possible? What does it take to design a 20kTEU ultra large container ship? The biggest ships in service are the Emma Maersk 15kTEU series, and the biggest new design under construction is the Triple-E 18kTEU. Is it possible to break the 18kTEU barrier? Text: Knut Døhlie, DNV

This was the question posed by a team of young students at the University of Strathclyde in the UK last year. The challenge involved not only a capacity increase, but also a dramatic decrease in the fuel consumption, a prudent point much in line with current thinking in the industry. The LEAD design The LEAD design produced by the student team is 400m long, roughly the same length as the Triple-E and Emma series. The beam has been increased by 7m to 65m while the draft has been increased by 1.5m. The speed has been reduced from 25 knots to 19 knots. The length parameter is important. The ship’s length is the most expensive dimension to increase. The vertical bending moment is a function of the ship length squared. The max hogging moment in the mid-ship area determines the dimensions of the top of the hatch coaming. This is where the 47-steel plating is used. So keeping the length under control is important from a structural-strength point of view. On the other hand, a longer ship will have a lower Froude number for a given speed, meaning that the resistance will be less and the ship will thus require less propulsion power. The Froude number may still be maintained at a satisfactory level if the ship speed is low enough. When increasing the capacity, the logical conclusion from a performance point of view is therefore to increase the beam, keep the length and reduce the speed.

12 | container ship update NO. 1 2012

This is the reasoning behind the unusual beam of the LEAD design. From a practical point of view, a beam beyond the 60m mark may be impossible to operate today due to the crane outreach in the important terminals. This objection may disappear if the drive for more fuel-efficient designs continues and wider ships are built. It is less than a decade since a 60m outreach was impossible. Today ULCS designs with a beam of 58m are quite common. The upside of the new philosophy is the dramatic fuel saving obtained.

“There are two effects, one stemming from the capacity increase and the other from the speed reduction” The student team claims a fuel saving of 40% per day over the Emma series due to the speed reduction. When taking the capacity effect into consideration, the saving jumps to 55%, expressed as ton fuel per TEU day. These figures are extraordinary and signify the most critical factors of speed and capacity when considering green cost-efficient shipping. There is a downside to this equation and this is also addressed in the team’s paper. A speed reduction implies a longer time at sea. From a shipper’s point of view, that means increased warehouse costs as part of the capital costs. How important is that? These costs are carried by the

shipper whereas fuel and ship costs are carried by the liner company. It is clear that higher speed reduces the warehouse costs and increases the fuel cost and vice versa. The two cost elements are in the same order of magnitude, as is well documented in the paper. The significance of the warehouse costs may not be fully recognised in the industry. Maybe this is part of the reason why container ships were designed for such high speeds in the past. Design optimisation The design is optimised by the use of an object function describing the main ship parameters (TEU, L, B and CB). Combinations of L/B ranging from 426/60 to 400/65 and a CB ranging from 0.646 to 0.716 were studied, resulting in the following chosen design: Length (LOA)

Beam Draft

Depth CB

400 m

65 m

34 m

››

16 m

0.691

Table 1

Propulsion system The choice of propulsion system is based on five alternatives (conventional single screw, twin engines, medium-speed engines, diesel electric – Azipod or nuclear) rated against a set of weighted selection criteria (emissions 20, cost 20, reliability 18, fuel consumption 13, space 11, future potential 7, complexity 6 and manoeuvrability 5). The outcome is given in Table 2.

Ultra large container ship designs

° Container ships delivered ››

Evolution in container ship size (by DNV and Alphaliner)

Propulsion system

Final points (out of 100)

Ranking

Twin engines system

64.6

Conventional system

52.7

Medium speed engine

46.5

Diesel electric – Azipod

43.7

Nuclear propulsion

33.0

››

° Container ships on order

Table 2

The twin-engine system, employing the new G-type (ultra-long stroke) engine from MAN, was selected. The increased beam provides space for large diameter propellers and possibly a short engine room. The final power requirement is calculated to be 52,950 kW, employing two six-cylinder G80

engines (6G80ME-C9.2TII), RPM 58-68, with two three-blade 9.8m propellers, giving a maximum speed of 19.7 knots. Optimum speed and slow steaming The ship will operate at a range of different speeds, as is the case for current container ships. The operating profile, i.e. the combination of speed and loading, will probably be in a range below the maximum speed. The choice of operating speed is an important aspect of the LEAD design, which was actually the subject of a paper presented at the COMPIT 2012 conference in Liège, Belgium in April this year. That paper is covered by another article in this magazine. 

More details The LEAD design is covered in great detail in a 240-page paper that deals with a number of relevant issues, such as structural analysis, torsion, cost analysis, electrical and heat loads, energy balance and EEDI, hull coatings, emissions reductions, seakeeping and parametric rolling. If you are interested in receiving a copy, please contact us on e-mail address: Yee Shin Khor, khoryeeshin@miscbhd.com or Knut Døhlie, knut.dohlie@dnv.com

container ship update NO. 1 2012 |

Ultra large container ship designs

some typical ultra large container ship designs Design

Maersk E-series

Samsung 16k

Maersk Triple-E

Malacca-Max

LEAD 20k

Alphaliner 2011

STX 22k

TEU

15,200

15,956

18,000

18,154

20,028

20,250

22,000

Loa

397.0

399.0

400.0

440.0

476.0

Lbp

376.0

380.0

390.0

420.0

460.0

56.4

57.0

60.0

65.0

59.0

59.5

30.2

30.1

35.0

34.0

30.1

Tsc

16.0

21.0

16.0

16.5

16.0

59.0

14.0

14.5

19.0

Cb_Tsc V

25.0

DWT (Tsc)

175,000

186,400

DWT/TEU

11.5

11.7

14.5 0.62

0.69

25.0

19.0

24.0

242,800

216,000

220,000

13.4

10.8

10.9

DWT (Td)

165,000

225,500

DWT/TEU

9.2

11.3

Designs in table from left to right: • Maersk Emma-series • LEAD design, University of Strathclyde • Samsung Heavy Industries 16k design 2011 2009 • ALPHALINER 2011 • Maersk Triple-E • STX design 2010 • Malacca Max study, University of Delft

20 000 TEU L = 400 m B = 65 m D = 34 m T = 16 m CB = 0.691

››

Lead design by student team, University of Strathclyde.

14 | container ship update NO. 1 2012

The blue cells contain values that exceed what is normally considered acceptable. E.g. the draft of 21m is maximum draft in the Malacca straits. A beam of 65 m

24.0

is beyond the outreach of cranes, and a ship length of more than 400 m is beyond the current max length.

Ultra large container ship designs

What is the optimum speed for a 20kTEU container ship? A paper presented at COMPIT 2012 in April concluded that the optimum speed for a 20,000 TEU container ship is 19.5 knots. The study models a ULCS of 20kTEU on a Far East to Europe service and is based on the LEAD design (see a separate article) developed by a team of students at Strathclyde University in the UK. Text: Knut Døhlie, DNV

The study was inspired by the trend of slow steaming and ever increasing ship sizes. Lower speed has been an effective way of dealing with the increase in bunker prices and oversupply of tonnage in recent years, as it leads to more ships being employed and lower fuel consumption. So why look for bigger ships when there are too many available at present? It is all about bringing down the TEU cost per mile. The relationship between propulsion power, displacement and speed is given in the equation below:

Propulsion power is proportional to speed to the power 3 and displacement to the power 2/3. Capacity is given by the product of displacement and speed, and from the relationships it is evident that increasing the size of the ship is more propulsion efficient than increasing the speed. But what is the optimum speed for a given design? Finding the optimum speed involves solving the multivariate problem. It is about combining the revenue and cost elements under various operating conditions and solving the equation to maximise the total profit. The effect of different

variables can be studied by keeping some variables constant while varying others. The optimum speed was found to be 19.5 knots. From the figure on top of next page, it can be seen that the gross profit curve does not vary much in the 18–22 knot speed interval, implying that the gross profit is not greatly affected by speed variation in this interval. The paper presents sensitivity results for freight rates, bunker prices and load factors. Will ships speed up again when times are better and freight rates increase? The answer is probably yes, and in the study we see that the speed may vary from 17.5 knots to close to 22 knots when the freight rates increase from below 1,000 USD/TEU to more than 1,400 USD/TEU. The price of bunkers will have the opposite effect. For a bunker price below around 350 USD/t, a speed of close to 24 knots is the optimum choice. The speed drops to 21 knots when the price goes above 400 USD/t. For prices above 650 USD/t, the optimum speed is about 19.5 knots or lower. The effect of the load factor is similar to that of the freight rates. Higher load factors, i.e. more available cargo, result in higher optimum speed. Speed increases with increasing demand.

At the design stage, the designer must decide how to optimise the hull form and on the choice of engines and propulsion train. The goal will normally be to make choices that maximise the earning capacity throughout the ship’s life. Knowing the likely operating profile, i.e. the speed, load factor, etc, is therefore important. In the case at hand, we have also seen that the profit is not very sensitive to speed variation in the 18–22 knot region. So maybe this is a good indication of the best speed range for optimising the hull form and power train. This fits in quite well with what we have recently seen in commercial projects.

“The profit is not very sensitive to speed variation in the 18–22 knot region” The calculation model The model compares the Emma Maersk series of 15kTEU with the LEAD design of 20kTEU on the Far East to Europe service. The number of port calls has been reduced to five, namely Shanghai, Hong Kong, Singapore, Valencia and Rotterdam. The bigger ships are only expected to call at a few prominent ports.

container ship update NO. 1 2012 |

Ultra large container ship designs

Annual gross profit revenue and total costs ($)

180 000 000

Revenue Cost Profit

170 000 000 160 000 000 150 000 000 140 000 000 130 000 000 120 000 000

Optimum speed

110 000 000 100 000 000 90 000 000 80 000 000 70 000 000 60 000 000 50 000 000 40 000 000 18.0

18.5

19.0

19.5

20.0

20.5

21.0

21.5

22.0

22.5

23.0

650

700

23.5

24.0

24.5

Service speed (knots)

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Optimum speed will be in the 18–22 knot region.

Optimum speed (knots)

bunker cost 25.0 24.0 23.0 22.0 21.0 20.0 19.0 18.0 17.0 16.0 15.0 200

250

300

350

400

450

500 550 600 Bunker cost ($/MT)

750

800

freight rate Optimum speed (knots)

The analysis assumes that the volume to be transported is given by the Emma series of 15kTEU at 25 knots. The same volume can transported at 18.75 knots with a 20kTEU ship (15x25/20). The speed range selected for analysis is 18–25 knots. Power and resistance data have been generated for the LEAD design, showing the power requirement for different speeds. The auxiliary power is also estimated in the same way. The effect of fuel efficiency measures is incorporated into the model. The next step is to model the cost and revenue under given assumptions. The problem of optimum speed analysis is a multivariate challenge that can best be dealt with by keeping some parameters constant and varying one parameter to see the effect of such a variation. This allows different scenarios to be established under given assumptions. The following basic assumptions have been made: the amount of cargo loaded and unloaded in each port is the same; each port is just as efficient; the average load factor is the same for both legs of the round trip; the freight rate is 1,200 USD/ TEU; the fuel cost is 700 USD/MT; the ship construction cost is USD 200,000,000; the average value of the cargo to the shipper is USD 50,000; and the interest rate used for calculating the capital cost to the shipper is set at 25%. It is interesting to observe that the capital cost is of the same order of magnitude as the fuel cost. However, fuel is paid by the liner company and the capital cost is carried by the shipper. 

25.0 24.0 23.0 22.0 21.0 20.0 19.0 18.0 17.0 16.0 15.0 500

600

700

800

900 1000 1100 1200 1300 1400 1500 1600 1700 1800 1900 2000 Freight rate ($/TEU)

This paper was presented by Mr Khor Yee Shin in the recent COMPIT 2012 conference in Liege, Belgium. The complete paper may be downloaded from www.compit.info. Our paper begins at page 121.

Optimum speed (knots)

load factor 25.0 24.0 23.0 22.0 21.0 20.0 19.0 18.0 17.0 16.0 15.0 35

›› 16 | container ship update NO. 1 2012

55 60 Load factor (%)

Sensitivity study of bunker cost, freight rates, load factor, and their influence on optimum speed.

850

25.0

Maritime Labour Convention

Maritime Labour Convention to enter into force on 20 August 2013 On 20 August 2012, the International Labour Organisation (ILO) announced it had received the 30th ratification, fulfilling the last condition for the entry into force of the Maritime Labour Convention, 2006 (MLC, 2006). The charter sets out the labour rights of the world’s 1.2 million seafarers and establishes a level playing field for ship-owners.

The ratifying countries include major flag states such as Liberia, the Marshall Islands, the Bahamas, Panama, Norway, Singapore and Cyprus and hold almost 60 per cent of the world’s tonnage. This means that the maritime industry will have a truly international standard for seafarers’ working and living conditions. The ILO has confirmed that the entry into force date for the Convention will be 20 August 2013. All ships of 500 tons and above in international trade will have to be certified as complying with the legislation developed by the flag states and identified in the Declaration of Maritime Labour Compliance as well as with the shipowners’ measures to ensure ongoing compliance with the requirements. Ships without certificates or flagged to non-ratifying states will be subject to the Convention’s “no more favourable treatment clause” and may have problems when entering the ports of ratifying states. Under the MLC, 2006 every seafarer has the right to: ■■ A safe and secure workplace that complies with safety standards ■■ Fair terms of employment ■■ Decent working and living conditions on board ship ■■ Health protection, medical care, w elfare measures and other forms of social protection Quite a lot of work will have to be done by authorities, ship owners, crew manning agencies, recognised organisations and

©DNV, Magne A. Røe

Text: Georg Smefjell, DNV

ship owners before ships can be certified, and the clock is now ticking. The success of the Convention is, as always, dependent on effective implementation and we encourage the industry to start work and/or continue to work with sufficient resources. DNV has worked on these matters for a long time and we are ready to help implement the MLC, 2006 effectively by providing: ■■ ■■

Seminars and courses An extended document review/gap analysis

A voluntary declaration of compliance Statutory certification ■■ Crew Manning Office certification (regulation 1.4) ■■ Support material for self-assessment (owners, manning agents, yards and governments)  ■■ ■■

For further information contact your local DNV Office or send an e-mail to MLC@dnv.com.

container ship update NO. 1 2012 |

Rickmers ShipManagement

On-board staff are the principal performers Cost efficiency and reducing emissions are the biggest requirements for shipping today. In this regard Jens Lassen, the head of Rickmers Shipmanagement, highlights the importance of a responsible on-board management.

Photo: Rickmers Shipmanagement

Text: Nora Luttmer

››

Margrit Rickmers

“If you want to run a ship in the cheapest and most efficient way in the long term, you need to have a highly qualified crew,” says Jens Lassen. “On a ship with a good Captain and a good Chief Engineer, there are never any problems.” Since 2011, the Rickmers fleet has applied so-called Ship-Centric Management to optimise operations. The concept is based on the recognition that the longterm cost-efficiency of ship operations

18 | container ship update NO. 1 2012

depends on the crew and on-board management. “They are the ones that primarily guarantee technical quality and safety,” Mr Lassen says. In general, senior officers are treated as navigators and mechanics, with little insight into leadership, costs and budgets. Rickmers’ principle is to assign more responsibilities to the onboard leaders. Senior officers should manage the ship and crew and be responsible for the ship as a

business unit. Whenever possible, managing officers are always allocated to the same vessel through a back-to-back (1:1) rotation system. This allows them to plan for the long term and take better care of the ship’s maintenance and the training of junior officers and crew. This management concept certainly requires a high training budget at the beginning. “But it will be profitable. Responsibility and ownership is the best motivator,” Mr Lassen says.

Cutting fuel consumption on a daily basis “More fuel- and cargoefficient ship designs will come, but for the time being – with fewer new containerships in the books – other measures must be taken,” says Mr Lassen, who again points to the ship-centric approach. He says it is important to set up the baseline for fuel consumption…the “where are you”. This must be based on scientific measurements. Thereafter it is a question of identifying fuel saving initiatives and training the crew. There is a need for a scientific approach and for equipment to measure consumption. “Our experience of using the Rickmers in-house fleet as a fuel-saving laboratory proved that you can reduce fuel consumption by up to 10% without any fundamental modifications,” he says. This saving does not include benefits from reduced speed.

“The performance expectations for container ships are 20 years behind those for tankers” The main savings are due to the correct trim, for which Rickmers ships use a modern dynamic trim system provided by ABB. Another aspect often neglected is weather routing, especially taking currents into consideration when choosing the route. Good passage-planning can mean one day less on the journey from the US to Europe. “But then, good planning means on time – not late, not early,” Mr Lassen emphasises. If you are too early, you might have forgotten about slow steaming. Fundamental modifications “There are many other fuel-consumption measures,” says Mr Lassen. But they do imply modifications that cost money. The question is: who is paying the bill? It is the charterers – the ones filling up the tanks – who have everything to win. Anyhow, up to now Mr Lassen has seen mostly ship equipment sellers or ship management companies investing in a payback deal. “We just signed the first contract for

Photo: Nora Luttmer

Rickmers ShipManagement

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Jens Lassen, in charge of the Maritime Services business segment and head of the newly established Rickmers Shipmanagement (left) with Jörg Langkabel, Country Manager, DNV Germany.

a chartered vessel to cut the fuel consumption as part of the charter deal,” says Mr Lassen, who sees fuel saving as a sales argument to attract ship management. “With modifications, fuel consumption can be reduced by up to 20%,” says Mr Lassen. The propeller, for example, is optimised for sea trial speed, but no one ever runs at sea trial speed. “Our experience shows that changing the propeller for one which is optimized for service speed can pay back in a surprisingly short time.” Other measures that can be taken include the regular cleaning of ship hulls and propellers, and bow adjustments.

commitment to safety training and environmental excellence. “The container market needs something like a TMSA guide too,” Mr Lassen argues. Concerning standards, he expects strong support from Classification Societies. He sees them as one of the driving forces in the development of the industry. However, he sometimes wishes the service was faster and, especially in the newbuilding stage, that the role of the classification company was clear. “It is the owners that should be the customers, not the yards. That would eliminate many unfortunate discussions.”  

Stricter standards “The performance expectations for container ships are 20 years behind those for tankers,” says Mr Lassen. “The regime is too soft. That increases the risk of accidents.” Tankers, on the other hand, are spotless because otherwise they do not get approval and cargo from the major industry Charterers. The Tanker Management Self Assessment (TMSA) guide has challenged Owners and Operators to evaluate their approach to the ISM Code, improve their management systems and demonstrate a strong

The Rickmers Group The Hamburg-based Rickmers Group focuses on shipping and is composed of three independent business segments – Maritime Assets, Maritime Services and Logistics Service. “We do everything between the capital and the charterer,” says Jens Lassen, a Norwegian Naval Architect & Marine Engineer who joined the Rickmers Group in 2010. He is in charge of the Maritime Services business segment and heads the newly established Rickmers Shipmanagement, where he is responsible for technical fleet management, purchasing and logistics, fleet personnel insurance and risk management.

container ship update NO. 1 2012 |

HSVA

In need of new designs Text: Nora Luttmer

“We see that common features of new projects are lower speed requirements and the corresponding higher block coefficient of the design,” says Uwe Hollenbach of Hamburgische Schiffbau-Versuchsanstalt (HSVA), a company that tests the energy efficiency of hulls and propulsion facilities for yards and owners. “And model basin work can help develop such a new generation of significantly more efficient ship hull forms and technical solutions.” Multiple-point optimisation “In the tests, we mostly address different operating conditions, including speed and draught variations,” says Dr Hollenbach. Ship owners should first of all define the operating profile of the ship. Based on the draught and speed range they calculate, the hydrodynamic experts will then

20 | container ship update NO. 1 2012

search for the most economical combination of the following parameters – length, breadth, draught and block coefficient – for given speed and capacity requirements. “Demand for such multiple-point optimisation is constantly increasing. This makes the designs more flexible for future services instead of just optimising the hull for one single speed-draught condition.” Few ships tend to sail at design conditions only. At this point, Dr Hollenbach emphasises an aspect that must not be neglected: safety. How slow can a vessel run and still be able to manoeuvre safely? At the moment, new ship designs tend to run at a maximum of 22 knots with optimisation at 16-18 knots. Dr Hollenbach thinks the next step should be to acquire smaller engines with a maximum capacity of maybe 18 knots. However, ship owners currently still tend to

Photo: HSVA

Economic pressure and international legislation require a sensible use of energy resources. Slow speed is the quickest way to do so and ship designs have already been affected by that trend.

prefer larger engines. Dr Hollenbach says that engines which are laid out for higher speeds are also a problem for, e.g., Panamax vessels. “From a hydrodynamic point of view, the rather slim Panamax ships are much better than their reputation.” Speed trial standard The design of the hull lines and propeller and the engineering of the propulsion plant are key elements in ship speed-power performance. In order to verify the actual performance against the contractual requirements, a speed trial is conducted. These trials usually have a limited time scale and can rarely be held under contract conditions. The measured ship speed and shaft power must therefore be corrected to allow for differences between the trial conditions and contract conditions.

Photo: HSVA

Photo: Vebjø rn Guttorm sen

Photo: HSVA

HSVA

››

Dr Uwe Hollenbach in the middle together with Jost Bergmann, DNV Business Director, Container Ships (left) and Georgios Teriakidis, Marketing & Business Development Manager, DNV Piraeus.

“To improve transparency and the reliability of speed trial results, an industry standard for performing and analysing ship speed trials is needed,” says Dr Hollenbach. The Joint Industry Project “Sea Trial Analysis” (STA) initiated by Dutch model basin MARIN has developed a common methodology for speed trials of new ships coming into service. The International Towing Tank Conference, of which HSVA is a member, is now seeking to establish the standard internationally via IMO. Fuel-saving devices There is an “over-selling by many marine equipment manufacturers of the products and miracle cures”, wrote Niko Wijnolst, professor emeritus in shipping innovation, in Lloyd’s List on 11 May. He says that modern ships, which in general are well designed, benefit

very little, if at all, from these fancy and very expensive energy-saving devices. A major obstacle when promoting fuel-saving measurements is how to reliably measure the alleged savings from the various devices. Further, Dr Hollenbach points out the problems of durability. “Flow phenomena, especially at the rear end and near the propeller, are very complicated.” In the 1980s, for example, many ship owners added the trailing guide wheel (Grimmsche Leitrad), an additional propeller-like device that uses the propeller stream to generate additional thrust. “A great idea,” says Dr Hollenbach, “but it turned out not to be robust enough.” A fate some devices today may easily share. Maybe, he suggests, it would be best to just clean the hull and propeller twice a year. That, too, very much boosts efficiency. 

Dr Uwe Hollenbach Uwe Hollenbach, head of the resistance and propulsion department at HSVA, is a naval engineer and sailor. The hull that smoothly cuts through the waters is what drives him. Before joining HSVA six years ago, Dr Hollenbach gained experience working for Kiel-based Lindenau Shipyard, the Germanischer Lloyd classification society, the Ship Design & Consult (SDC) consultancy company and Blohm&Voss Shipyards. HSVA Hamburgische Schiffbau-Versuchsanstalt (Hamburg Shipbuilding Laboratory), a private institute for applied research in all marine hydrodynamic areas, such as ship and offshore technologies in open water and ice. Facilities include a cavitation tunnel for propeller and rudder testing, an ice model basin and a towing tank, allowing the use of large models of up to 13 metres. In 2013, the institute celebrates its centenary.

container ship update NO. 1 2012 |

Danaos

Photo: Danaos

“The two-tier market is exaggerated. Apart from the hype, shipyards and some owners tend to overplay this”

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Dr John Coustas, President and CEO, Danaos Corporation.

22 | container ship update NO. 1 2012

DANAOS

Creating a global leader in container shipping

the Danaos Corporation We have been invited into a spacious corner office overlooking the port of Piraeus in Greece to learn more about the rise of the NYSE-listed Danaos Corporation. The office belongs to Dr John Coustas, the President and CEO. Text: Magne A. Røe, DNV

Dr Coustas holds a Bachelor’s degree in Mechanical Engineering and a Master’s degree and PhD in computer science, and the obvious question is why this is the perfect background for creating a globally leading container ship operator. The Danaos Corporation fleet consists of 64 ships and has the capacity to carry more than 360,000 TEU. The 13,100 TEU Hyundai Speed, a recent delivery, is among the largest such ships in the world. “To me, performance is the key to success and this translates into precision, and computer science is about just that. If you add my family background in shipping, visions and ability to achieve the goal of making the company a leading global provider of container ships, then I believe that computer science is the perfect background,” says Dr Coustas, pointing to the fact that his company also has its own computer science software house supplying software worldwide to the shipping industry. Over the past 25 years, you have created a leading company with a young fleet. Please comment on the company’s history and growth. “The container industry is a game of scale. We have bought and invested in the largest ships available at the time they were built, as larger ships provide cost benefits. The first-generation ships we had were multipurpose, but it was obvious to me that multipurpose ships would eventually disappear to be replaced by

specialised vessels such as container ships. In 1994, we bought a 2,500 TEU container ship which was a ‘monster’ at the time when it comes to size. At the beginning, we purchased second-hand ships, but placed the first order for the 5,500 TEU ships with Samsung to DNV class. After that, size has basically gone just one way – up. We took delivery of the last ship in our 13,100 TEU newbuilding programme this summer and currently do not plan to buy any larger ships. These 13,100 TEU ships will, by the way, be the largest Panamax container ships in the world for the new Panama Canal. So, since I became CEO in 1987 and we bought three ships that were transferred to DNV class, growth has been the name of the game for us, as has our long-standing relationship with DNV. I still remember well, when the issues of safety management and the ISM Code were introduced back in 1992, that we were the first to implement the new code together with DNV. Today, our software house works closely with DNV to offer DNV Navigator as part of our shipboard software solutions.” Danaos’ operating revenues increased by 35.6% in the first quarter 2012 compared to the first quarter 2011, from USD 99.0 million to USD 134.2 million. Is the market now healthy and growing? “The increase in our fleet accounts for most of the growth, but I see evidence of market growth as well.

container ship update NO. 1 2012 |

DANAOS

However, there are many uncertainties in the global economy. Our fleet is chartered out to global lines such as Maersk and Hyundai for up to 18 years, so we are not all that influenced by the fluctuations in the market as such. In terms of size, we are the third-largest company and were listed on the NY Stock Exchange in 2006 – and have been a listed company ever since.” You mentioned your software house – how do you put this to good work for your own company too? “We crew our ships with Greeks, Russians and Ukrainians. Speaking about staff, we are right now developing sophisticated software for the optimal allocation of seafarers based on skills and experience. With a large fleet, it is very important to have the right crew mix and the new software will assist here. We have also developed optimal weather routing software that gives our captains a basis for selecting the best alternative route. Captains want an ‘easy ride’ to get to the destination on time and the software is designed to take the decision about the route out of their hands. By doing so, we can save up to five per cent of fuel – bearing in mind that the captain is of course free to choose the route as he is ultimately responsible for the ship, crew and cargo. We can follow all onboard decisions live from our offices and this involves us strongly in the daily operations and allows us to operate as a shore- and sea-based team in real time. Containership operations are complex, with many requirements to fulfil, and our crew gets real support from the office. The software allows the ship to be an extension of our office by truly synchronising the two.” What are the biggest challenges facing a container ship operator in the current market? “The biggest challenge is to find a good crew to perform properly. This is followed closely by how to cope with slow steaming. We have engines with, for instance, 100,000 horsepower and they are not designed to operate over a long time at only ten per cent of capacity. This means

24 | container ship update NO. 1 2012

“Class must be in command of technology – a technically sound partner for us.” Dr John Coustas, President and CEO, Danaos Corporation

we will have to modify the engines, including bypassing the turbo chargers and also the exhaust gas boilers as the temperature is too low. On the older engines, this includes installing slide valves.” Schedule reliability – meaning being at the right port at the right time – has been essential for container ship operators. Some liner companies seem to think this will be the competitive edge in the years to come. How important do you think this will be in the future? “Scheduling is a problem of the past. These days, the generally slower speeds mean that ships have a considerable power reserve so that they can make up time if needed. So, yes, it is still very important, but the ships’ current speeds have made the problem less acute.”

Slow steaming has been an important element in container ship operations over the past few years. Will this trend continue? Will you revert to higher speeds when the market picks up again? “Slow steaming has strong economic considerations attached to it. Today, at the current fuel price, we have every incentive to keep the speeds at the low level. If market demand picks up radically, we may be tempted to speed up – but this would require a big leap upwards in box rates. Ships are designed to operate at 25 knots, but today we typically operate at speeds of 17 to 18 knots. At these speeds, we use less than half the fuel we otherwise would have consumed. This means that, in a global context, container ships contribute the most to reducing CO2 emissions from shipping, having reduced their overall

DANAOS

Photo: Danaos

Far East trades. The smaller ships, below 10,000 TEU, can trade anywhere in the world throughout their life, giving us the needed flexibility. What we do see, however, is a trend towards designing ships for lower speeds. The new designs aim to reduce friction resistance as much as possible, but the problem is that they are made for calm water conditions. No one questions the effects of the new designs in bad weather. A ship with lower engine power has less to fight bad weather and oncoming waves with. In addition, new designs tend to be wider and higher and this gives much more of a roll in bad weather conditions as well as added resistance. Not the best combination. So today one must be careful about not being carried away by the marketing materials from the yards, since they are trying to sell in an oversupplied market. We have to be careful not to invest in ‘strange’ and conceptual ships we may not need in the long term.”

CO2 output by more than 30 per cent on average. So I feel that we, and the entire container industry, are doing quite well on emissions reductions.” The ‘operating profile’ has become the buzz word for new container ship designs these days. New designs are now tailor-made to a given speed and loading profile, claiming significant fuel reductions. How do you find this new trend? “It’s nice to have the option of making and designing ships for a certain trade. On the other hand, no one knows whether the ship will operate under this profile forever. Trading-pattern changes mean that the ships may need to change to other routes and this means limitations. We have new 13,100 TEU ships for the Europe to

A ‘two-tier market’, where new fuelefficient designs yet to be delivered will compete with the recently delivered designs, may be part of a future scenario. How, in your opinion, will container owners adjust to this new reality? “The two-tier market is exaggerated. Apart from the hype, shipyards and some owners tend to overplay this. The ability to design and deliver more energy-efficient ships is obviously present. On the other hand, in the past we ran ships at 24 knots, burning some 200 tons of fuel a day, and today we run the same ships at 19 knots using 90 tons a day. Our annual fuel savings are considerable. Ship designs that save some ten per cent are good, but this means we are maybe saving some nine tons a day from the 90 tons we use at 19 knots. That’s only a difference of some USD 5,000 a day. So new designs are not game changers and will probably become more attractive if the market improves considerably, thus making increased speed again more attractive.”

30 per cent more fuel efficient than the ones delivered today. How will this affect the industry? “The EEDI will not affect the industry. We have made the power reductions. Much of the EEDI requirements have been met already so this is not a problem or an issue of concern to us.” How do you see LNG as a future fuel for container ships? “LNG may be used in small quantities in, for instance, ports. There is also the issue of LNG’s complexity. There are the safety issues as well as the aspect of having crew trained in operating the LNG systems. I do not see LNG as a viable fuel option in the long run except for vessels within ECAs.” Port State Control adds another inspection regime. How do you meet the challenge today and what can DNV do to assist in this respect? “Port State Control is a regime we welcome as it contributes to additional safety at sea. Our fleet, and also in general terms the Greek fleet, is not a substandard fleet. Our fleet has an average age of six years, we run expensive operations and class our fleet with reputable class societies like DNV – so PSC is not really an issue for us in terms of this being a challenge.” Finally, what are your expectations of a modern class society like DNV? “Class must be in command of technology – a technically sound partner for us. Class must have the expertise to solve and guide us through any problems we may have and I expect class to be a 24-hour operation, 365 days a year, to match our requirements. We expect the availability of surveyors and class to be competitive. We are happy with DNV and the cooperation we have had for many years. DNV is one of the most advanced class societies and very good on research – which is why I allocate vessels to DNV.” 

The entry into force of the EEDI (Energy Efficiency Design Index) will mean that new ships built after 2025 will have to be

container ship update NO. 1 2012 |

HYUNDAI SPEED 13,100 TEU

HYUNDAI SPEED 13,100 TEU Owner: Danaos Shipping Co. Ltd. Yard: Hyundai Samho Heavy Industries Co., Ltd. Class: DNV

26 | container ship update NO. 1 2012

Year of build: 2012 Loa: 366 m B: 48.2 m Speed: 24,7 knot

Illustration: DNV

HYUNDAI SPEED 13,100 TEU

container ship update NO. 1 2012 |

LNG is the future

LNG is the future Dr Gerd-Michael Würsig has long-term experience in the gas segment and has worked on gas issues in the shipping industry since 1988. He truly believes that we will see many more ships, both large and small, running on LNG in the future. Text: Eva Halvorsen, DNV

Rules and regulations for gas as ship fuel DNV Rules for Classification of Ships Part 6 Chapter 13: Gas Fuelled Ship Installations; actual version is dated January 2012 IMO developed Interim-Guidelines for gas as ship fuel (MSC-285(86)) which have been set into force in 2010: • Initiated 2004 by Norway on the bases of experiences with first vessels (first vessel GLUTRA; (in 2000)) • Not mandatory Guideline for all vessels which are not liquefied gas carriers • Major contribution of DNV to the development of MSC-285(86) IMO IGF Code is under development to cover LNG and other liquefied gases plus liquid low flashpoint fuels with a flashpoint below 60°C. Main focus is on LNG as ship fuel. • “International Code of Safety for Ships using Gases or other Low Flashpoint Fuels Gas as Ship Fuel (IGF-Code)” • Intended to be finalized in 2014 • Major contribution of DNV (on behalf of Norwegian Administration) For liquefied gas carriers the IMO IGC-Code is applied since decades. LNG as fuel is only permitted on LNG carriers. A revision is ongoing. DNV contributed to the revision of the IGC-Code within a working group headed by SIGTTO (2008/2010) • Revised IGC-Code will include regulations to burn gas for gas carriers other than LNG carriers (in force in 2014) DNV initiated ISO work on a Guideline for bunkering of LNG as fuel. • ISO TC-67, WP-10, PT-01: Guideline for LNG bunkering • Draft to be presented end 2012

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Dr Gerd-Michael Würsig is a process engineer, but has worked on shipping issues since 1988 and it is the gas aspect that has been his speciality all the way. Having just joined DNV, he is looking forward to sharing his knowledge and continuing to work with gas, and preferably LNG, with DNV’s customers. The International Maritime Organisation (IMO) has had LNG on its agenda for many years. Dr Würsig became involved in this field in 2004 as a con sultant on behalf of the German Ministry of Transport. “It wasn’t until 2009 that the interest in LNG as fuel for ships really took off. With the introduction of SECAs/ECAs (Sulphur Emission Control Areas/Emission Control Areas), LNG is regarded as an important part of the solution,” explains Dr Würsig. Shipowners were curious about technological solutions, safety issues and not least financial issues, but were cautious in their investment policies. In 2010, the International Gas and Fuel (IMO MSC-285(86)) Guideline entered into force, introducing state-of-the-art technology and laying the foundation for a future IGF Code (known as the International Gas as Ship Fuel Code). At the time of writing, the technical content of this code is nearly ready. According to Dr Würsig, the IGF Code will probably be submitted to IMO members and adopted by the Maritime Safety Committee (MSC) in 2014. The code will then be mandatory and part of international law. “International regulations are of vital importance to shipowners and the shipping world,” he says.

Infrastructure The bunker fuel infrastructure is an important aspect of LNG as fuel for the shipping industry. It is argued that a prerequisite for the use of LNG in shipping propulsion is an ample fuel supply infrastructure. However, Dr Würsig is not very worried about this. “They say it’s a chicken and egg problem; if you don’t have the infrastructure, the industry will not invest in the solution, but if there is no demand the infrastructure will not be built. But that is not the way I see it. In my view, shipowners will realise that LNG is a very good solution, and in parallel the infrastructure will also soon be in place.” He points to Norway’s experiences. Today, there are 27 ships running on LNG along the coast of Norway, including a number of offshore supply ships and navy vessels. The infrastructure is now in place. The global order book for ships running on LNG now stands at 29 vessels. Dr Würsig expects around 1,000 vessels to be running on LNG in 2020. And by then he expects the infrastructure question to be solved as well. “The SECA/ECA requirements will enter into force in 2015/2016, and this will accelerate the process,” he says. LNG on larger vessels So far, LNG is mostly used for short sea or local shipping and this means small vessels. DNV has developed concept ship designs for larger vessels as well, but these have not taken off yet. Pointing to the extensive infrastructure in Norway, Dr Würsig underlines that things are also starting to move elsewhere. A bunker station is going to be built at the entrance to the Kiel Canal in Northern Germany, there is a project in the pipeline

LNG is the future

“The most important issue is not the location of the tank itself, but the safe separation of the gas system from the rest of the ship.”

Photo: Damir Cvetovejic

Dr Gerd-Michael Würsig

in Antwerp, a gas project is planned in Northern Denmark, and in Sweden a new terminal is already up and running outside Stockholm. In addition, more and more LNG terminals are preparing for a future where they can serve the shipping industry in addition to their land-based customers. “The infrastructure will follow the demand very fast, and I think we will see more and more large ships running on LNG in the years to come,” says Dr Würsig. In his view, the most promising area in the very near future is the tanker segment. He is primarily referring to all kinds of gas carriers, chemical tankers and product tankers sailing in ECAs and equipped to carry dangerous goods. However, he presumes that ROROs, ROPAXs and small container vessels will also follow soon, and that the introduction of ECAs will be a defining moment in time with regard to this development. Location of LNG tanks The location of the LNG tanks within the ship is a discussion point of particular interest in the business. On the DNV concept designs

for container ships, the tanks are located below the superstructure. However, it has been argued that this location is not acceptable. Dr Würsig refers to a Quantitative Risk Assessment of the most relevant safety issues currently being developed by DNV, and underlines that the location of the LNG tanks is of great importance but should not be viewed in isolation. “The most important issue is not the location of the tank itself, but the safe separation of the gas system from the rest of the ship. We truly believe that the tanks can be located below the superstructure without compromising safety and this is already something that is done,” he says. A recent concept design for container ships from Kawasaki uses type B tanks. This tank concept has a rectangular shape. The gas inside has a pressure of 0.7 barg, slightly above the atmospheric pressure. With their rectangular shape, such tanks are far more effective in terms of storage capacity than traditional spherical tanks. And especially when it comes to large vessels, this is a very practical design, bearing in mind that LNG needs twice as much

Dr Gerd-Michael Würsig, DNV Business Director LNG-fuelled ships Dr Gerd-Michael Würsig has recently joined DNV as Business Director for LNG as ship fuel. Gerd-Michael has long experience from the classification business as a gas technology coordinator, project manager, research engineer and technical consultant on process technology, energy efficiency matters and liquefied gases. His work in rule development is related to liquefied gases and fuel cell technology. He has participated in the development of IMO regulations since the early 1990s. Recently, Gerd-Michael contributed to the SIGTTO working groups for IGC-Code revision and the working group evaluating fire events relating to LNG tankers. As the German Ministry of Transport representative in the IMO Correspondence Group for the development of the International Code for Gas as Ship Fuel (IGF-Code), he actively supports the development of safety standards for gas as a ship fuel and was deeply involved in the development of the Interim Guidelines for Gas as Ship Fuel (MSC.285(86)).

space as traditional bunker fuel to produce the same amount of energy. “For big ships, this is the future,” says Dr Würsig. “And it will happen tomorrow.” Cold ironing Container ships require an auxiliary power supply in port for the reefer plugs. Cold ironing is being introduced to ports in the US in particular, but other locations may also adopt this solution. Dr Würsig definitely sees LNG for auxiliary engines as a possible substitute for cold ironing. “Vessels can even be connected to the local gas grid while in port,” he says. Dr Würsig truly believes in a future for LNG-driven ships, both large and small. Much of the opposition to LNG near inhabited areas, such as container ports, may be caused by the lack of experience of using LNG as a ship fuel. “I think that, with time, people will understand that the risk is not mainly related to the application of a new technology. The risk is actually related to the consequences we all ultimately will have to face if we do not apply the new technology,” he concludes. 

container ship update NO. 1 2012 |

Press release, dated 20 January 2012

Large LNG-fuelled container ship granted approval in principle Oslo: Kawasaki Heavy Industries has completed the development of a large, 9 000 TEU container ship fuelled by LNG and obtained Approval in Principle from DNV. The ship is designed with a new type of LNG tank that provides more space for container cargo.

“There are high expectations for LNG as an alternative, next-generation clean fuel to reduce reliance on heavy fuel oil” Mr Nobumitsu Kambayashi, Kawasaki Heavy Industries, Ltd.

››

Photo: Kawasaki Heavy Industries

Text: Per Wiggo Richardsen, DNV

Kawasaki 9000TEU container ship fuelled by LNG.

The LNG is stored in prismatic low pressure insulated tanks (Type B) and this is the first time that such tanks have been proposed for a large container ship. They are different from cylindrical pressure tanks (Type C) as they utilize the available space much better due to their prismatic, rectangular shape. KHI has also adopted a unique technology, the Kawasaki Panel System, for heat insulation in order to reduce the rate of evaporation of LNG. B-type tanks produce evaporating LNG continuously which must be used for propulsion or auxiliaries. Reefer containers will consume the boil off in port eliminating any emission of LNG to air, as well as

30 | container ship update NO. 1 2012

eliminating the need for cold ironing. KHI obtained DNV Approval in Principle for both the gas supply system of the vessel and the LNG fuel tanks. Next, KHI plans to perform a safety assessment of the vessel with DNV. The LNG fuel tanks and fuel oil tanks are located under the forward accommodation minimising the loss of cargo space. The design criteria for ships using LNG as fuel are currently being studied by IMO (BLG) and the location of LNG tanks under the superstructure has been a subject for discussion in the industry. DNV plays an active role in these discussions. “It is important to understand the

environmental imperatives that shipowners face, but it is also important to recognise that, in reality, the uptake of new technologies is a balance between risk and business need. Together, DNV and KHI have struck just the right balance with this vessel,” says Tor E. Svensen, COO at DNV. There are high expectations for LNG as an alternative, next-generation clean fuel to reduce reliance on heavy fuel oil which is currently used for large container ships. LNG was chosen as the fuel for the vessel because it reduces carbon dioxide (CO2) emissions which contribute to global warming as well as dramatically reducing nitrogen oxides (NOx) and sulphur oxides

Press release, dated 20 January 2012

“The innovative type-B tank concept provides better space utilization and improves overall profitability of the LNG powered container ships. We believe this is the best alternative for big ocean going ships requiring large amounts of bunkers” Mr Nobumitsu Kambayashi, Kawasaki Heavy Industries, Ltd.

Principal particulars of the new 9,000 TEU LNG-fuelled container vessel: Length overall 308 m Breadth 48.4 m Draught 14.5 m LNG fuel tank 7,000 m3

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Photo: Kawasaki Heavy Industries

Kawasaki Heavy Industries Kawasaki Heavy Industries has two shipyards, one at Kobe and another at Sakaide. The backbone of ship development, construction, and maintenance at Kawasaki is high valueadded ships such as submarines and LNG/ LPG carriers. Kawasaki has long history in shipbuilding extending as far back as the company’s 1878 founding as the Kawasaki Dockyard Company.

The LNG is stored in prismatic low pressure insulated tanks (Type B).

(SOx) which are major health hazards. DNV is also promoting LNG as it is proving to be an economically favourable emissions reduction solution for shipowners. Decoupled from oil prices due to sources such as shale gas, it is expected to remain competitive for the lifetime of new vessels entering the market. 25 ships in Norway are already floating evidence of LNG’s safety and technical feasibility, and DNV has had rules in place for over ten years.

space available for loading containers. ■■ (2) A low-speed dual-fuel diesel main engine which is electronically controlled and has high combustion efficiency coupled with a hull form optimised for safety and fuel efficiency. ■■ (3) An exhaust gas recirculation system which satisfies IMO Tier-3 requirements for voyages in North American and European Emission Control Areas (ECAs).

The new container ship design features: ■■ (1) A twin island design and an accommodation area that is separated from the engine space without reducing the cargo

KHI will apply the technology and design principles used to other container ships as part of the company’s goal to be world leaders in the development and

construction of innovative eco-friendly vessels. With KHI technologies acquired through the past development and construction of LNG carriers, KHI also plans to move into the field of LNG bunkering vessels to further extend the scope of their environmental offerings. DNV has demonstrated the feasibility of a range of large LNG fuelled ships through concept studies such as the container ship Quantum 9000, Triality, a VLCC size oil tanker, and two different sized bulk carriers. “DNV is proud to be working with forward-thinking companies such as KHI to help make clean shipping a reality,” says Tor E. Svensen. 

container ship update NO. 1 2012 |

Baltic feeder design

What would a future Baltic feeder design look like? DNV has recently carried out a survey in which we asked the container segment about the future of Baltic feeders. The participants were asked to rate the importance of various options and solutions. Text: PĂĽl Wold, DNV

What would be important to consider when looking for a new Baltic feeder design? What would be important design solutions for the future? What would the future size and speed be? The survey of the container ship community was carried out by Questback, and BTJ assisted by adding their contacts in the Baltic Sea region. In total, 40 answers were received from ship owners and operators and the results are reported in this article. What is most important when considering a new Baltic feeder design? Not surprisingly, the most important topic for ship operators today is cost (see figure 1). With increasing fuel costs and high pressure on charter rates, reducing the operating cost is naturally very important. Furthermore, since the fuel cost dominates the total operating expense, fuel efficiency is not unexpectedly number two on the list of the most vital issues to consider. As regards fuel consumption, the survey also showed that it is important for new feeder designs to be more fuel efficient over a larger speed range. Previous container ship designs have only focused on one design point; the best possible fuel consumption performance at the design draft and design speed. However, when reviewing actual operating data, it is clear that most ships do not only operate at their design speed and design draft. In fact, following the recent world financial crisis, slow steaming and less TEU utilisation is more common than high speed

32 | container ship update NO. 1 2012

and full loads. As a result, most container ships today are operating outside their fuel efficiency point. Hence, future Baltic feeder ships need to be more flexible and the actual operating profile needs to be taken into account when designing a fuel efficient ship. When it comes to environmental awareness, it is clear that ship owners and operators believe the environmental footprint is important. Of course, with the upcoming ECA requirements, the industry will have no choice but to be more responsive and take the necessary action to reduce ship emissions. On the other hand, given the ballast water treatment requirements due to be introduced and the fact that extra ballast water results in higher fuel consumption, it may perhaps be somewhat of a surprise that having a minimum ballast ship design is not regarded as that important. DNV has carried out several innovative design projects, such as Quantum (container ship), Triality (tanker) and Ecore (bulk), which have shown that reducing ballast water lowers operating costs significantly. However, as stated above, the future Baltic feeder designs need to be more flexible with respect to cargo intake and ballast water would in such case have to be within operating limits and have correct trim levels. What solutions should be considered for a new Baltic feeder design? From the survey results in figure 2, it can be seen that efficient propulsion technology is regarded as the most

important solution for a new Baltic feeder design. This is very much in line with the earlier results, which showed that fuel efficiency was top of the agenda. Various fuel efficiency devices are available in the market, but it is very difficult to know their actual impact on the fuel consumption. To meet this industry need, DNV has created a guideline â&#x20AC;&#x153;DNV Fuel Saving Guide for Container Shipsâ&#x20AC;?, aimed at guiding owners through the jungle of various energy efficiency devices, looking at the different appropriate options and helping them choose the best solution for their ship. The shipping industry in the Baltic Sea will face the challenge of complying with the ECA requirements in 2015. Several possibilities are available. If ships are still to run on fuel oil, there are two options; either use low sulphur fuel or install a scrubber. Another option is to use LNG as fuel, and in figure 2 it can be seen that the Baltic feeder operators rate dual fuel propulsion quite highly, indicating that LNG as fuel is regarded as a real option. Using LNG as fuel meets both the SOx emission and NOx emission requirements. It should be noted that by using dual fuel propulsion, and not a pure gas engine, the design would need to install an exhaust gas cleaning system to comply with the emission regulations. However, before LNG can replace fuel oil completely in the Baltic Sea, the LNG availability and infrastructure challenges need to be solved. This is reflected in the results, as the pure LNG propulsion option achieves a low score. However, it is

Baltic feeder design

››

Fig.1 Ranking of the most important items to consider in a new Baltic feeder design.

High hazardous cargo capacity Crew comfort Comply with existing Kiel Canal limitations High reefer capacity Reduce time spent on lashing and securing High ICE-Class Minimum ballast ship design Carry different types of containers New designs to have same max. draught as existing designs Flexibility with respect to different box sizes Flexibility for speed variation (slow steaming) Flexibility for different trading areas Good ship manoeuvrability Environmental footprint Reduce time spent on cargo loading and unloading High loading capacity (i.e. no. of 14t containers) High loading capacity (i.e. no. of slots relative to ship size) Optimal fuel consumption over wide speed range Reliability of operation and ability to keep the schedule Comply with future rules and regulations Fuel efficiency Operating costs in general 0

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Fig.2 Ranking of solutions to be considered for new Baltic feeder designs.

Pod propulsion as used for cruise ships Pure LNG propulsion The design to have cargo gear Folding type hatch covers Flexible engine configuration, using multiple engines Open top concept, hatchless Cell-guides on deck to reduce the need for lashing Use of lightweight or composite materials in ship components such as hatch covers Superstructure in front to increase available deck area and stack height Pontoon type hatch covers Stern truster Dual fuel propulsion (diesel/LNG) Efficient propulsion technology 0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

container ship update NO. 1 2012 |

Baltic feeder design

30% Crew size will increase compared to today 25%

Future feeder designs will have trade routes around Denmark and not through the Kiel Canal

20%

Most feeders today will be upgraded to comply with ECA (scrubbers, alternative fuels)

15%

LNG will become an important or dominant fuel type for the Baltic trade

10%

Newbuildings have to replace existing feeders to comply with ECA

5% 0%

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Feeder size will increase compared to today Less than 1,000TEU 1,500TEU 2,000TEU 2,500TEU 3,000TEU More than 1,000TEU 3,000TEU

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Fig.5 Owners’ and operators’ opinions on future Baltic feeder designs

Fig.3 What would the future Baltic feeder size be?

regarded as just a question of time before sufficient LNG bunker facilities are available and several different projects are currently looking into these challenges. The price of LNG versus the price of HFO and MDO will of course also have a huge influence on the owner’s decision in this respect. However, shale gas could be a game changer as there are more gas reserves than oil reserves, and this might favour LNG on the cost side too. What would be the size and speed of a new Baltic feeder design? In the Questback survey, we asked the owners and operators for their opinions on future speed and size trends. From the answers, it can be seen in figure 3 that the majority believe the most needed size is in the range of 1500–2000 TEU, which is an increase compared to today’s fleet. This fits well with the “Baltic containerisation” report published by BTJ in May 2011. Here it was discovered that while the feedering in the Baltic had increased by almost 80% – from 83,500 TEU in 2006 to 157,000 TEU in 2011 – the increase in the number of ships was only 20% – from 124 ships to 160 feeders in the same period. The difference between the latter numbers

34 | container ship update NO. 1 2012

shows that a ship’s average capacity has grown significantly – from 675 to 981 TEU (+45%). In 2006, operators had 13 vessels which could carry nominally over 1,200 TEU, while in 2011 they had 41 such ships. Based on the Questback results, it is believed that the trend towards increasing Baltic feeder size will continue, following the trend for deep-sea container ships. When it comes to what design speed the next generation of Baltic feeders should have, the results in figure 4 show that the owners and operators believe the design speed should be reduced. This also follows the trend seen for deep-sea container ships, where design speeds have been reduced significantly. For a future Baltic feeder of 2,000 TEU, the design speed would typically be around 19 knots, which would be a reduction of about two knots compared to today’s fleet of a similar size. It should be noted that the existing fleet numbers shown in the figure include all feeder container ships and not only those operating in the Baltic Sea. Conclusion The survey also asked the owners and operators for their views on some general statements regarding future size, fuel type, trade routes, etc (see figure

5). It is clear from the answers that it is assumed that the trend towards increasingly large Baltic feeders will continue. However, the Questback results also show that the majority believes the future trade route will still be through the Kiel Canal and hence there would be an upper size limit for such a Baltic feeder design. It is also interesting that most of the owners and operators believe they would have to build new container feeders to comply with the new ECA requirements, rather than retrofit existing feeders. Furthermore, most of the answers indicate that LNG would be the preferred fuel in the future. Based on the answers given in the survey, a popular future Baltic feeder would thus be of Kiel Canal max size, running on LNG, with a design speed of around 19 knots but optimised for an operating profile that takes into account flexibility in speed and draught. When that is said, the Baltic Sea trade will still need various feeder sizes to accommodate the different cargo needs, so the workhorses of the Baltic will still come in different sizes in the future. 

Baltic feeder design

26.0

SPEED v TEU (ships built after 2000)

24.0 22.0

SPEED, V

20.0 18.0 16.0 14.0 12.0

10.0

500

1,000

1,500

2,000

2,500

3,000

Answers from questback

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Fig.4 What would the future Baltic feeder speed be?

“Efficient propulsion technology is regarded as the most important solution for a new Baltic feeder design”

Photo: Scanpix

y = -1E-06x2 + 0.0065x+12.638 R2 = 0.8019

container ship update NO. 1 2012 |

Container ship update

Container Ship Update reader survey:

DNV Fuel Saving Guideline gets top score Our readers are interested in technical articles on topics that are relevant to their present-day business situation. This was the clear feedback in our reader survey conducted in March this year. Text: Knut Døhlie, DNV

Our communication should be easy to understand for the typical “generalist”, with guidance on further in-depth study when needed. The DNV Fuel Saving Guideline received the top rating of a more than 90% score, clearly indicating that timely technical information in an easy-to-understand format is welcomed by the industry. “Welcome” is also the response to the statement “I find it useful to receive Container Ship Update”. More than 85% of the respondents highly agree with that statement. We asked the same question in a similar survey in 2006 and the score was almost the same. The magazine celebrates its 10th anniversary in 2012, and the high score in

the two different surveys indicates that we have the continued support of our readers. That the digital media are winning the publication competition seems to be the common belief in this modern day and

“We were somewhat surprised to see that there is a pronounced preference for the paper copy” age. So we asked whether you preferred a paper copy in your in-basket, a PDF copy in your mailbox, or reading the magazine online or on a tablet (iPad or similar). We were somewhat surprised to see that there

Reader feedback from the survey “I think the magazine has a good spread of articles and lots of white space that makes it light to read” “You have done a great job of providing helpful information. Consider including articles on container ship accidents or failure cases in the magazine”

18.5% 63% 53.7%

“It is a great magazine, with the latest update on technology. I always look forward to receiving a copy of the magazine”

36 | container ship update NO. 1 2012

18.5% On a tablet (iPad, iPhone or similar) 63% Paper copy by mail 6.5% On the DNV web 53.7% PDF to my mailbox

6.5%

“Keep the articles as short as possible, max two pages”

is a pronounced preference for keeping the paper copy. The PDF alternative is also popular and seems to be preferred as a complement to the paper copy. The emerging media, such as the iPad, are expected to grow in popularity so we will cater for them too. You can download this issue directly to your iPad by scanning the QR code in this magazine. We would like to thank all those who participated in the reader survey. You have helped us to make the magazine better and more useful for our readers. In order to encourage people to attend in the reader survey, we set out a prize to be drawn in a lottery. The winner of the iPad is Mr Vittorio Dondero, MSC Geneva. 

Container ship update

Container Ship Update:

Ten years old and still going strong It is all about staying in contact with the container ship industry and providing a useful and constructive forum for information. Container Ship Update was first published in 2002 and has appeared every year – with 2–3 issues per annum – for the past ten years. Text: Knut Døhlie, DNV

The first issue in 2002 was an eight pager focusing on ships in operation, SOLAS amendments and shaft line alignment. The latest issue in 2011 contained 44 pages with several articles, including highlights from the DNV Fuel Efficiency Guideline for Container Ships. The ambition has been the same, but the format and scope have developed. Providing technical information in a user-friendly format remains our goal. Looking at the feedback from our two reader surveys (2006 and 2012), we conclude that the container ship industry appreciates our approach. When taking stock of our ten-year history, we find two things that stand out as noteworthy. After the “Napoli” accident in

2007, DNV carried out an extensive investigation into the cause of the accident to discover any remedial action that could be taken to avoid something similar happening in the future. The investigation into the challenge of whipping and springing was initiated by this accident and led to year-long full-scale measurements on container ships in cooperation with a major Korean shipbuilder. We published the outcome of the QUANTUM studies in 2010 – the original 6,000TEU concept design and the 9,000TEU concept design, both of which run on LNG. The studies employed present-day or near-future technologies to achieve a concept design which will not be

built exactly as proposed, but which could provide food for thought and new development. The NAPOLI and QUANTUM issues are seen by many as our best issues during our ten years of existence. 

APL – introducing the most efficient Ultra Large Container Ships

Rickmers – On-board staff are the principal performers

The Danaos Corporation – Creating a global leader in container shipping

container ship update

No 01 2012

NewS frOm DNV tO the CONtaiNer Ship iNDUStry

Sm iO

eD N

container ship update NO. 1 2012 |

Photo: Getty Images/Monty Rakusen

SEEMP

THE SEEMP – why, what and how? A Ship Energy Efficiency Management Plan (SEEMP) is intended to be a practical tool for helping ship-owners manage their environmental performance and improve operational efficiency. dnv can help you reap the benefits of SEEMP for your ships – cutting fuel consumption and operating costs. TEXT: Jonathan Abrahams, DNV

38 | container ship update NO. 1 2012

SEEMP

SEEMP –– Four SEEMP Foursteps stepstotosuccess success Step 1

Step 1 – Establish a baseline Establish STEP 1 a baseline is important examine data, tools and It is important toItexamine data, to tools ESTABLISH A BASELINE processes in order to determine a and processes in order to determine

It is important to examine data, tools processes credible baseline fromand which goals, plans a credible baseline from which goals, and actions all grow in order to determine a credible baseline from which plans and actions all grow.all grow. goals, plans and actions

Step 2 Step 2 – IdentifyIdentify improvement potential potential improvement

STEP 2

Step 4 – Evaluate and update

STEP 4 The progress of the different Step 4 improvement initiatives persons / EVALUATE AND UPDATE

Step 3 – Implement and monitor

Evaluate and update with the assessment of The progress of department the various improvement The progress of the various improvement performance used to modify future goals initiatives is used to modify future goals initiatives is usedand to modify future goals and implementation tactics and implementation tactics. implementation tactics.

The shipping industry has become the subject of increasing scrutiny in recent years as the general community and regulating authorities worldwide become more concerned about global carbon emissions. It is widely recognized that carbon emissions could be reduced significantly if operational efficiency were improved on a large number of ships. seemp Will beCome maNDatorY iN JaNUarY 2013 The iMo has taken a lead through MarPol and other regulatory instruments to enhance energy efficiency and GhG emission control for shipping. At the iMo MEPC 62 session in July 2011, amid mounting pressure from industry and other authorities, SEEMP was adopted and will become mandatory for all vessels at their first renewal or intermediate survey after 1 January 2013. DNV recommends companies to use this opportunity to create a momentum for reducing their fuel and operating costs. For companies that want to develop their own SEEMP, a comprehensive guideline can be downloaded from www.dnv.com/SEEMP. DNV – bringing lessons from the field to SEEMP development DNV can also assist companies in

Identify how much you can and just Identify howsave much you can save and IDENTIFY IMPROVEMENT POTENTIAL as importantly, what you need to just initiatives as importantly, what initiatives Identify how much you can save and just as undertake to realize the improvements you need to undertake to realise the importantly, what initiatives you need to improvements. undertake to realise the improvements.

STEP 3 Put the plan into action and track Step 3 performance IMPLEMENT using a variety of established AND MONITOR Implement and monitor systems / processes to help overcome Put thePut plan and track performance theinto planaction into action and track resistance to ‘new’ initiatives using a variety of established systems and processes performance using a variety of to helpestablished overcome systems resistance ‘new’ initiatives. andtoprocesses to help overcome resistance to ‘new’ initiatives.

preparing their SEEMP, either to get started or to prepare the plan itself. We have developed SEEMPs for customers around the world bringing a systematic, structured and cost effective approach to each project. Our SEEMP development services have been built on the experience gained from the delivery of SEEMPs, detailed energy efficiency projects and complementary work conducted by the entire DNV organization in the areas of fuel management, ship design, statutory and class services. Going beyond compliance DNV believes that the way in which an SEEMP is implemented determines whether it is successful or not. Since the overall objective of having a SEEMP is to use less fuel, the benefits of a successfully deployed SEEMP include reduced maintenance costs, fewer running hours and lower emissions. A plan is essential Our approach is naturally fully compliant with the IMO guidelines, and improves on them by emphasising the delivery and implementation of the plan. By drawing on insight from leading practices in a range of shipping segments, DNV brings applied

and practical intelligence to the SEEMP development process, ensuring that the ship-owner or operator not only becomes compliant, but also reaps the benefits of lower consumption and costs. 

SEEMP – What EXaCtly iS it? IMO – MEPC.1/683, Guidance for the Development of a SEEMP recognises that operational efficiencies can make a valuable contribution to reducing global carbon emissions. A Ship Energy Efficiency Management Plan’s main purpose is to establish a mechanism to improve a ship’s operational and energy efficiency – preferably linked to a broader corporate energy management policy. The SEEMP is intended to be customised to characteristics and needs of individual companies and ships. The IMO guidelines themselves can be found on the IMO website www.imo.org. Contacts For enquiries related to ship energy audit, SEEMP and energy efficiency services, contact your local customer service manager or the Energy Efficiency unit: environmentandenergyefficiency@dnv.com or seemp@dnv.com. A comprehensive guideline can be downloaded from www.dnv.com/SEEMP.

container ship update NO. 1 2012 |

ship FInance risk models

Re-evaluating ship ﬁnance risk models To succeed in today’s fiercely competitive shipping market, maintaining a low cost base is critical. And because fuel oil represents a major part of the operating cost of a container ship, optimising fuel efficiency will have a significant economic impact on a vessel’s overall performance. Owners may understand this, but are banks in danger of overlooking these factors and funding the wrong asset types?

Photo: Scanpix

TEXT: Alex Wardwell and Vebjørn J. Guttormsen, DNV

40 | container ship update NO. 1 2012

ship FInance risk models

380 cst bunker prices, Singapore

18,000

Figure 1. Average speed of a typical ULCS on the Far East to Europe trade between 2007 and 2011 in Westbound (WB) and Eastbound (EB) directions combined with variations in bunker costs and container ship earnings.

WB speed

16,000

EB speed

Clarksea index Containership Earnings

14,000

12,000 10,000

16 8,000

Speed (knot)

$/Day (for earnings) –$0.10/mt (for bunker)

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6,000 4,000

12 2,000 10

Old analysis models used by banks to evaluate the financing of newbuilding programmes tend to focus on commercial risks – freight rates, trade patterns and tonnage capacity. Technical and operational risks related to emissions regulations, fuel efficiency and environmental performance are secondary considerations, left to owners and managers. However, by re-evaluating their risk profiles and understanding that new designs can significantly improve technical and operational performance, banks will be in a better position to earn healthy profits and finance an innovative, commercially successful series of ships. Container ship development The remarkable development of the container ship segment over the past decades is a result of the significant growth in global trade. To meet the demands of this trade, the development model for containership design was guided by three basic principles: size, speed and power. Larger vessels enabled more cargo to be

transported, increasing revenues without significantly increasing the operational costs, while ever-greater speeds met customer demand for faster service and ensured the vessels maximised their time in trade. This highly successful model saw container ships grow in size from the typical Panamax size of 4,000 TEU in 1990 to the new Triple-E 18,000 TEU ordered by AP Møller Maersk in 2011. The fundamentals of this development model were challenged by the global financial crisis, which took hold in 2009. Seemingly overnight, there was a drop in demand for goods, reducing the need for seaborne transportation and creating t onnage overcapacity issues that put intense downward pressure on freight rates. In response, industry players rearranged or cancelled loops and services, and many container ships were placed in hot or cold lay-up. Meanwhile, vessels ordered in better times continued to roll out of the yards (some directly into layup), exacerbating capacity issues and further eroding freight rates.

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Slow steaming into the future To help manage tonnage capacity issues, the industry responded by reducing vessel speeds. Figure 1 shows the results of a DNV study on the average speed of a typical ULCS on the Far East to Europe trade between 2007 and 2011. The figure also shows how bunker costs and container ship earnings have varied throughout the period. The study is based on data available in the public domain. Indeed, slow steaming, which keeps more vessels in operation and helps reduce fuel costs, has long been the default strategy employed by owners to survive difficult markets – a moderate decrease in speed reduces the fuel consumption dramatically. As can be seen from Figure 2, the propulsion power needed for a large container ship travelling at 18 knots is only 30% of the power demand at 25 knots. In the past, slow steaming has proven to be an easy and highly effective tool for managing spikes in fuel costs or shocks to global trade, often caused by localised

container ship update NO. 1 2012 |

ship FInance risk models

Relative propulsion power needed 120 25 knots refer to 100% relative propulsion power

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Figure 2. Relative propulsion power needed for a large container vessel shown as a function of ship speed (courtesy of MAN Diesel & Turbo)

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short-term political or economic crises. Once the crisis passed, the segment returned to “business as usual” and vessel speeds returned to normal. However, the 2010 recovery was different. While the demand for liner services had improved, the container ship segment emerged from the crisis to find a changed economic and regulatory environment. Firstly, bunker costs had risen sharply since the global economy began to improve in 2010. Secondly, emerging international and regional environmental initiatives focused on reducing carbon emissions had and will continue to change the regulatory landscape in significant ways. Unlike previous crises, the combination of new regulations and increasingly higher fuel costs is not a short-term trend, but is the “new normal”. In short, slow steaming (or operations at variable speeds) is here to stay.

This new market reality has already changed the relationship between liner companies, shipowners and cargo owners. At the same time, some industry players are calling for a shift from a transactional focus on freight rates to a more comprehensive focus on the total cost of transport. Other initiatives, such as line-optimisation and improving port efficiencies and intermodal logistics are also being studied. While these issues are important, the industry is facing a more immediate challenge. With newbuilding prices at historical low levels some owners have used the opportunity to re-start their newbuilding programmes. However, do the vessel designs of the past represent the best chance of success in this new market reality? Does the old operating profile (“bigger, faster and more powerful”) match current market conditions? And if these conditions persist as expected, are owners building vessels that are optimised for the new market reality?

Long-term design solutions New regulations and high bunker costs are long-term issues that require longterm solutions.

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Figure 3. A typical 3D operating profile for a ULCS on the Far East to Europe trade

Design according to expected operation Choosing the right operating profile for a vessel travelling at reduced and variable speeds represents a fresh challenge for naval architects. In the past, the operating profile of a container ship was easy to identify: the design point was determined by full load at top speed, and fuel consumption could thus be optimised for best performance in this condition. However, today’s ships seldom operate at this point. As can be seen from Figure 3, a DNV study on container ship operating profiles shows that the speed of a typical ULCS on the Far East to Europe trade between 2007 and 2011 varied between 15 and 21 knots, while loading varied between 60% and 90% of full utilisation. When designing next-generation container ships, efficiency over a wide range of speeds and drafts will play a vital role in reducing fuel consumption and emissions to air. A ship with excellent performance at the contracted design speed and draft condition can have huge potential for improvement for operation outside the

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Figure 4. Analysis of a ULCS showing the wave-making resistance at variable speeds. It can be seen that the bow wave system is more pronounced at the lower speeds, with a corresponding increase in the wave-making resistance.

design point. This is illustrated in Figure 4, where Computational Fluid Dynamics (CFD) has been used to calculate the wavemaking resistance over a speed range for a ULCS. It can be seen that the bow wave system is more pronounced at the lower speeds, with a corresponding increase in the wave-making resistance. Analysts have argued for some time that a two-tier market is emerging, as older and less fuel-efficient vessels lose out to modern tonnage. Shipyards and designers are offering their new fuel-efficient eco designs in the market. However, how much more fuel efficient are these designs, and how can you be sure that their fuel consumption will be in line with that promised? DNV Maritime Technical Advisory Services is a consulting unit in DNV with world-leading expertise on advanced ship design and engineering. The Resistance and Propulsion team has recently been engaged in several successful projects related to the optimisation of container ship hull efficiency. By optimising hull

lines, machinery and systems for the actual operating conditions, fuel savings in the range of 15–20% compared to existing similar-sized container ships can typically be achieved. DNV can also help owners and financiers assess the designs in order to verify that the ship will perform according to specification. Container Cost Calculator DNV has also developed a Container Cost Calculator, a tool to study the effect of ship size, speed, the number of ships in the loop, fuel price, engine type (SFOC) and the effect of fuel efficiency on new container ship designs. The Cost Calculator has been designed in part to help ship financiers and owners gain a better understanding of how a broad range of issues influence vessel performance over time and thus facilitate more robust risk models.

actions by some players in the container segment are certainly encouraging. And while these new, more environmentally friendly vessel designs and programmes have been developed in part to manage higher fuel costs and emerging emissions regulations, the net effect of successfully operating in the new market reality will contribute to a greener, more responsible industry – a commitment consistent with the stated objectives of many cargo owners, liner companies and shipowners. Analysts are free to question the motives of the industry, but the fact remains that the container ship segment has entered a new phase. Those who recognise these changes and are willing to act on them are likely to achieve a strong competitive advantage in the years ahead. 

Future winners For an industry often criticised for being slow to embrace new technologies for managing emissions, the

container ship update NO. 1 2012 |

DNV was present at SMM in Hamburg 4â&#x20AC;&#x201C;7 September 2012. Our stand was well attended! www.dnv.com