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Fighting the perfect storm

Dealing with a deadly pandemic and war in Ukraine, marine industry shows resilience and remains hopeful for the future

picture: Pexels

Global plague, followed by the winds of war? The marine industry has had a rather unusual couple of years. For the most part, the industry is united in fighting COVID and condemning Russian aggression in Ukraine.

For example, as Russia invaded Ukraine on now infamous 24th of February 2022, Cruise Lines International Association (CLIA) wasted no time in expressing its solidarity with the people of Ukraine. CLIA also wowed to work with the organizations across the maritime community, including the International Labour Organization (ILO), the International Maritime Organization (IMO) and shipping associations, to address challenges to the safety, security, and well-being of seafarers as a result of the conflict.

Also, Shipowners’ Associations – among them, Finnish Shipowners’ Association – have condemned the Russian invasion. The Shipowners’ Associations called the Russian Government’s decision to invade Ukraine “appalling,” noting that this act has serious consequences for the people of Ukraine and must be stopped immediately.

We call on Russia to cease the hostilities and respect international law and human rights, including the protection of all affected seafarers and the protection of lives at sea, the Shipowners’ Associations urged in a joint statement.

DARK CLOUDS ABOVE

According to the Confederation of Finnish Industries’ April 2022 Business Tendency Survey, Finnish companies’ outlooks have darkened in all the main sectors. The business cycle is still favourable in manufacturing, but is already declining in construction and services.

Sami Pakarinen, Director at the Confederation of Finnish Industries, observes that Russia’s attack on Ukraine is reflected especially in construction, where the situation has deteriorated quickly.

Picture: Pixabay

“The availability of materials in particular is now a major issue, and it is also a significant problem in manufacturing. Even though there still is ample demand in many areas, uncertainty about the future combined with a strong rise in costs is making the operating environment significantly more difficult also for Finnish companies,” says Pakarinen.

FAREWELL TO COVID, FINALLY?

Dealing with the aftermath of the pandemic, however, is showing some light at the end of the tunnel. CLIA states that its science-backed protocols have facilitated the resumption of cruise operations, with over 7.5 million passengers having sailed in nearly 90 markets.

Kelly Craighead, President and CEO, CLIA, stated in April that as the industry resumes operations, passenger volume is expected to recover and surpass 2019 levels by the end of 2023, with passenger volumes projected to recover 12% above pre-pandemic levels by the end of 2026.

CLIA’s consumer research shows that the intent to go on a cruise is rebounding, with 63% of cruisers or potential cruisers indicating they are ‘very likely’ or ‘likely’ to cruise in the next two years. 69% of respondents that have never cruised said they are open to cruise, exceeding prepandemic levels.

Generation Y seems to be driving the reboot, as millennial cruisers are the most enthusiastic about taking another cruise, with 87% indicating they will take a cruise in the next few years, followed by Gen X at 85%.

GRACE UNDER FIRE

In Finland, leading shipyard Meyer Turku has been able to cope amidst tough times. The company’s turnover for 2021 was EUR 1.08 billion which was somewhat higher than in the previous year – but, of course, 2020 was marred with COVID.

CEO Tim Meyer commented the financial results in May, admitting that exceptional times lasted longer than expected.

“The global effects of the COVID- 19 pandemic, such as labor and material mobility, affected our operations as well. However, despite significant challenges, we were able to keep our production and processes running,” says Meyer.

Picture: Pixabay

ORDERBOOK STILL SOLID

In the spring of 2021, for example, the company launched a major transformation program in Turku and Papenburg, Germany, to increase its cost efficiency and to ensure a sustainable profitability level.

“Our customers see growth in the market after the pandemic, and our shipyard’s order books extend to 2026,” Meyer says, adding that today, society, customers and ship passengers all require action to enhance responsibility.

“Our focus will increasingly shift to sustainable shipbuilding.”

The Turku Shipyard has kept its head to the grindstone, handing over Costa Toscana to Costa Crociere in December 2021 and now continuing work on Carnival Celebration (to be delivered by the end of 2022). Next up in the pipeline: Royal Caribbean International’s Icon of The Seas in 2023 and the TUI Cruises’ Mein Schiff 7 in 2024.

by Sami J. Anteroinen

Beyond the Covid/Ukraine double crisis:
cutting carbon, supporting lifecycle

Cruise Lines International Association‘s (CLIA) ocean-going members are committed to pursuing net-zero carbon cruising by 2050. In addition, by 2035 all ships calling at ports where shoreside electricity (SSE) is available will be equipped to use SSE, allowing engines to be switched off, thus effectively eliminating carbon emissions while berthed at port. Where shoreside power is not available, the ships will use available alternative low carbon technologies required by ports.

According to CLIA, the industry is acting now for the future. The cruise lines are reducing the carbon footprint of their ships while at berth and at sea and investing in advanced environmental technologies while partnering with cities and ports on sustainable destination management.

By equipping cruise ships with the ability to connect shoreside electricity and using it where available, the cruise industry is prepared to eliminate emissions while at port for the benefit of local communities. This is responsible tourism in action, notes CLIA.

Sustainable ways are finding root in other areas, as well. In Europe, Meyer Group is making its business more circular. In cooperation with shipping companies, the newly established subsidiary by the name of MEYER RE aims to maintain and modernize the vessels throughout their service life and to ensure the optimization of the vessels’ operations.

According to the ship-maker, significant benefits and added value will accrue to customers when ship products are supported throughout their life. In the future, Meyer Group’s customers will be able to benefit from the shipyards’ extensive know-how in this way, as well, and will make a significant contribution to maintaining the responsibility and value of ships.

Jan Meyer, CEO of Meyer Werft, says that MEYER RE is a new way to land extra work and orders for the Group’s shipyards and companies.

“The ships we renovate will be more attractive and responsible as products,” Jan Meyer says, calling MEYER RE an “important building block” for the German family company’s future.

MEYER RE will focus on ship refurbishment, including cabin deliveries, engineering services (e.g. ship energy management systems) and the conversion of ships to renewable fuels.