The ferry newbuilding market is bullish, with more owners selecting different forms of alternative propulsion
The ferry sector remains bullish for ropax enquiries and orders. The market goes from strength to strength centred on demand for larger tonnage to cover longer distance ferry routes. The last two years saw orders recorded for 58 and 60 vessels respectively. Order activity may be slacker this year due to long lead delivery times stretching into 2023.
The long wait will not necessarily concern owners because more newbuildings are selecting different forms of dual propulsion including LNG, hydrogen, battery and electric sources of power. LPG may also enter the dual power choice in the future. Some of these fuels are in the early application stages so prospective owners of newbuildings can reserve judgement on the final propulsion arrangement until construction is close to starting.
The big breakthrough has occurred in China where major owners such as Stena, DFDS, Finnlines and Moby Line have opted for Chinese construction, despite the possibility of delays. In Europe, Turkey has secured orders for several small and medium size units from Norwegian owners.
In several cases whole construction has been specified, where until recently hulls only would be built with outfitting in Norway. Damen has increased its involvement in building big ferries by landing orders from Canada. Six ferries will be built by Damen Galatz for BC Ferries and two for Seaspan at Mangalia. Since Damen’s takeover of the Galatz and Mangalia sites, it has brought increased prosperity to Romania as a major ferry builder. Elsewhere, BC Ferries placed a single ferry unit with Remontowa Gdansk. These orders show Europe is still a leading presence for passenger ferry construction. Europe is the undisputed champion in constructing cruise liners. There is a worry about Chinese success in gaining much ferry business, but these are expensive ships to build and China is a cheaper option. Europe however is consolidating well especially in the smaller ferry sector with numerous orders gained.
Faced with ever-increasing competition, owners are forced to reduce carbon emissions and adopt cleaner burning fuel, which will intensify in the years ahead. Older units will struggle to survive with conventional diesel propulsion. Today’s owners are relying on a steady exodus of older and fuel-hungry units being sold for demolition which opens the way for the plethora of newbuildings.
Fast-ferry catamarans are in demand with larger passenger capacity and increased speeds. Here the engine manufacturers are taking full advantage of multiple propulsion units with good business secured by MTU, Caterpillar, Wärtsilä, MAN and MaK in the strong market.
Japan and South Korea have also decided the time is right for new ferries. The major operators in Japan provided a boost for national yards with a series of large ropax ferries for the ferry routes to Japan’s hinterland. Twenty-two large ferries are currently on order here for delivery between now and 2023. Five ferries materialised in South Korea for domestic owners, four of which will be built by Daesun. Negotiations continue for more pending ferry orders which can be expected in 2020.