While 2021 holds significant uncertainties, Svitzer remains committed to fleet investment and business growth in northern Europe
While 2020 was a challenging year for tug owners, 2021 brings even more uncertainty in terms of business opportunities, operational conditions, crew health and environmental trends.
Tug operations were impacted by the global coronavirus pandemic in 2020, with owners tackling issues such as travel restrictions, health security and changing ship-handling requirements.
In 2021, operators are looking forward to these issues improving as nations roll out Covid-19 vaccines and hopefully lift travel restrictions. But easing lockdowns and carrying out vaccination programmes could be slow, and some nations have imposed even stricter travel rules and isolation requirements.
It all leads to greater uncertainty for tug operators such as Svitzer, which is exposed to these challenges worldwide. In Europe, operators also face competitive market conditions and ever-changing trading economics, such as the UK’s exit from the European Union (Brexit).
Svitzer Europe managing director Lise Demant expects 2021 to be an unpredictable year with challenges and business growth opportunities. “2021 has just started, and I guess from my European perspective on the business, the unpredictability is probably the biggest challenge,” Ms Demant tells International Tug & Salvage.
“I cannot recall a situation that has been more difficult to predict than what 2021 will bring.”
She looks back to 2020 for guidance on what could be expected in the first half of this year, and how Svitzer can manage that.
“The learnings from 2020 comfort me,” Ms Demant says. “Last year we proved our ability to be agile and come up with solutions under difficult circumstances.”
It was an important year for Ms Demant as she was promoted from chief commercial officer to heading up Svitzer Europe when managing director Kasper Friis Nilaus became chief executive of the whole group.
This year, Ms Demant will cement her position and seek to improve Svitzer’s market position in Europe. “We have a very clear goal of growing our footprint in Europe,” she says. “As a result, we are constantly analysing the industry dynamics and looking for opportunities to complement our existing set up.”
There will be considerable technical and market challenges along the way, plus fleet additions to test the team. “Until restrictions are lifted, our technical challenges are tied to the cumbersome circumstances that lockdowns across the region put us in,” says Ms Demant.
“Simple maintenance involving third-party suppliers is difficult due to mobility restrictions and is more time consuming due to the precautionary measures we take to protect our crews.”
The health of seafarers and port staff has always been the highest priority, and the Covid-19 pandemic has only heightened this. Another growing global trend is affecting tug operations and investments in Europe. Environmental concerns and calls for greener transportation and freight logistics are influencing tug design, construction and operations.
In Europe, this is manifested in the introduction of IMO Tier III requirements in emission control areas around the North Sea and Baltic region, minimising NOx emissions from diesel-powered vessel newbuildings.
“We have recently seen customers and stakeholders becoming more interested in the green agenda, when it comes to small vessels and workboats,” says Ms Demant. She has seen two new trends faced by tug owners.
The first of these is a drive to lower emissions through digitalisation. “There is a clear interest in reducing fuel consumption, specifically a pull for data-driven solutions that monitor consumption.”
A second trend involves owners considering secondhand tugs or repositioning vessels across their fleets, with the blessing of charterers and port authorities.
“I have noticed a green sustainability agenda displayed through greater willingness among customers to reuse cascaded vessels as opposed to specific requirements to provide new assets,” says Ms Demant.
Svitzer has used its size and global reach to instigate this strategy, while ordering newbuildings when requirements dictate.
“With the sizeable global fleet we have at our disposal, it is often possible for us to find a used asset with capabilities that matches the customer’s demand,” says Ms Demant.
“We consider flexible assets to be one of the key advantages of being a global company.”
It has moved tugs domestically and internationally to meet towage and ship handling requirements. But where this is not possible, Svitzer has invested in the fleet.
A prime example of this was its investment in two new ice-breaking tugs from Turkish tug builder Med Marine. These are scheduled to arrive later this year to replace two ageing tugs – Svitzer Helios and Svitzer Dynam.
“We are looking forward to welcoming both the ice-class tugs, Svitzer Embla and Svitzer Edda,” says Ms Demant. “We expect them to join the fleet in Scandinavia within the next few months.”
These azimuth stern drive tugs are being built to Robert Allan’s TundRA 3000 design. They will match Finnish-Swedish class 1A and have 60 tonnes of bollard pull.
“The ice-breaking capabilities are important features given the nature of the Nordic climate,” Ms Demant continues. “When the temperature drops, ice-breaking tugs are vital to keep Scandinavian ports open to keep trade moving.”
Another example of fleet investment came in January 2021, when Svitzer Europe contracted Damen Shipyards Group to supply a new azimuth stern drive (ASD) tug by the end of March for its operations in the UK. Unperturbed by Brexit, Svitzer purchased an ASD 3212 design tug with 80 tonnes of bollard pull to support container ship dockings in the Port of London.
A 2021 example of Svitzer’s use of its existing fleet in opening business opportunities is its expansion in Germany in January. It transferred Med Marine, 2020-built ASD tug Svitzer Vestri into a major North Sea roro port. This was joined by 1998-built Svitzer Valand in Emden.
“On New Year’s Day, we started a new operation in Emden, benefiting from our existing shoreside set-up in nearby Bremerhaven,” says Ms Demant.
“The expansion into Emden is great example of how we have succeeded in responding to customer demand without adding substantial new infrastructure,” she explains, with the expectation similar growth opportunities will follow in 2021.
“On the whole, we continue to look for organic and nonorganic opportunities keeping our growth controlled and profitable,” she concludes.
Svitzer implements digitalisation for emissions reduction
Tug operators are coming under growing pressure to lower their environmental footprint. Svitzer has met this challenge head on, developing digitalisation and vessel monitoring technology.
Svitzer Europe managing director Lise Demant says this investment has already brought operational, economic and environmental benefits.
“For fuel monitoring, we developed a system called Porttracker,” she says. “It combines and analyses the operations of harbour tugs in real time using a variety of data streams.”
These streams include data on tug position and engine performance, plus weather and tidal information. “We can identify opportunities to reduce fuel consumption and emissions,” says Ms Demant.
“The feedback from the use of the system is extremely valuable to both reduce emissions but also instrumental to run a lean operation,” she adds.
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