Post on 28-May-2020
Eco-Ship Feasibility
Hae Joon RHEE Previous Hanjin Shipping
S&P Manager and Researcher
Hae Joon RHEE , alias Rick (previous- Hanjin Shipping S&P manager and Researcher) |
… Fuel efficiency of container fleet over time and vessel size
1
Eco-Ship Feasibility
Hae Joon RHEE , alias Rick (previous- Hanjin Shipping S&P manager and Researcher) | 2
Contents
What is Eco-ship
Where We Are
Feasibility
Hae Joon RHEE , alias Rick (previous- Hanjin Shipping S&P manager and Researcher) | 3
Assumptions Technology Development Out-Pacing Vessel Operators’ Fleet Management Skills
SOURCE: ex-Hanjin, inner research
What is Eco-ship
Operator-Owners
▪ Economies of Size than Eco-ship
Conventional Owners and Financiers
▪ Are Charterers Willing to Fix Eco-ship
Yards
▪ Design Pressure versus Market Sustainability
☞ How much ‘eco’ should future eco-ships be for market feasibility?
Hae Joon RHEE , alias Rick (previous- Hanjin Shipping S&P manager and Researcher) | 4
Assumptions Technology Development Out-Pacing Vessel Operators’ Fleet Management Skills
☞ Cash-tight operators not really ready to take new technology for premium
-15%
-10%
-5%
0%
5%
10%
15%
20%
0
20
40
60
80
100
120
140
160
180
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Million TEU (Container,
only)
Trade
Bow, Solar, Wind-Panels (* NYK ‘2030, carrier) LNG-cells(*BYD Car: Lithium, part-maker)
< Volume Growth for Last Two Decades >
Propeller(*from yard’s R&D, maker)
Turbo -Charger, Heat -Recovery
Wind -resistant M&H, Bubble -coatings
MARPOL ANNEX IMO-SEEMP
ECA
What is Eco-ship
SOURCE: ex-Hanjin, inner research
SOURCE: Clarksons, Clarksons Research Container Department(Dr. Stopford)
Hae Joon RHEE , alias Rick (previous- Hanjin Shipping S&P manager and Researcher) | 5
Assumptions
Previous Fleet Operation Future Fleet Operation
Technology Development Out-Pacing Vessel Operators’ Fleet Management Skills
▪ Operation with Second-hand Vessel
▪ Slot-sharing between local partners
▪ Upon maturity of vessel charter-tenure, enter into new building contracts
▪ Speculative new building when vessel prices rise, more ships per loop
▪ Slow steaming
▪ Scope-Incremental Consumption
▪ ULCS(ULCV) in Supply-Demand Squeeze (against ‘EEE’-sized scales’ cost benefits)
▪ Operators now just too cash-stricken to swallow-in eco-ship premiums
▪ Sector Shift, Supply-Demand Squeeze
▪ Slot, Terminal-Inland Operation, EQ: Expertise and skill-sharing scheme
▪ Eco-ships, but only selected trades, more cascading(s)
▪ Most charter-owners already possess ample eco-ships
▪ More slow steaming (‘Extra’-slow steaming, ‘Super’-slow steaming)
▪ Vessel Age Incremental Consumption
▪ Yards design under pressure as room for more eco-ships are not big enough
What is Eco-ship
SOURCE: ex-Hanjin, inner research
Hae Joon RHEE , alias Rick (previous- Hanjin Shipping S&P manager and Researcher) | 6
Contents
What is Eco-ship
Where We Are
Feasibility
Hae Joon RHEE , alias Rick (previous- Hanjin Shipping S&P manager and Researcher) | 7
Assumptions Technology Development Out-Pacing Vessel Operators’ Fleet Management Skills
SOURCE: HIS Global Insight(ex-DRI WEFA), Analyst & JOC Columnist Professor Ben Hackett, CEO of Hackett Industry: http://www.thehackettgroup.com
Where We Are
Source: Global Insight Global Macro and World Trade Services
(Annual percent change) Demands
▪ Recovery from Europe and also at US, recently
Supply
▪ Additional 20,000TEU under discussion with yards
Yards
▪ Product Portfolio Being Tested to other sectors, e.g. Power Industry, FPSO, etc.
☞ Volume growth always super-ceded economic growth frictions: High or Low
Hae Joon RHEE , alias Rick (previous- Hanjin Shipping S&P manager and Researcher) | 8
Assumptions Technology Development Out-Pacing Vessel Operators’ Fleet Management Skills
Where We Are
-9-6-30369
NAFTA OtherAmericas
WesternEurope
EmergingEurope
Mideast-N. Africa
Sub-Saharan
Africa
Japan OtherAsia-
Pacific2009 2010 2011 2012 2013-20
(Annual percent change)
Source: Global Insight Global Macro and World Trade Services
< Consumption Dynamics >
Vessel Age
Fleet Optimization, Economies of Size
(NM Efficiency) Class age Built
1000 Average 17.685
2000 Average 10.635451513000 Average 12.030418254000 Average 7.479638009
5000 Average 8.158536585
6000 Average 5.6453488377000 Average 5.8888888898000 Average 4.181259000 Average 4.044117647
10000 Average 2.42857142911000 Average 1.187512000 Average 0.333333333
< Not Much Scrap Candidates >
(New-Building Needs)
SOURCE: HIS Global Insight(ex-DRI WEFA), Analyst & JOC Columnist Professor Ben Hackett, CEO of Hackett Industry: http://www.thehackettgroup.com, with private source and experience
Hae Joon RHEE , alias Rick (previous- Hanjin Shipping S&P manager and Researcher) | 9
Assumptions Technology Development Out-Pacing Vessel Operators’ Fleet Management Skills
Where We Are
0
50
100
150
200
250
VLCC 200k+ Persian Gulf–Republic of Korea
Panamax 40k-70k Caribbean–East Coast of North America/Gulf
of Mexico
CPP 70k–80k Persian Gulf–Japan
2010
2011
2012
Jan-13
Feb-13
Mar-13
Apr-13
May-13
< Tanker Market – World Scale >
< Container Market – Shanghai Container Freight Index >
BDI BCI 2008 Super-Cycle: BDI was at 11,793 ~!!!
‘’14 Feb 1,140 ‘’14 Mar 1,484
‘’14 Feb 1,674 ‘’14 Mar 2,766
☞ Super-Cycle was Triggered by China WTO, aftermaths of New Building Surge
☞ For Eco-Ship Boom, May Need Another China
☞ Current Premium of Eco-Ships are Not Reflecting Future Risks
Source: SSE China, UNCTAD
Source: SSE China, UNCTAD
Source: Clarksons
SOURCE: HIS Global Insight(ex-DRI WEFA), Analyst & JOC Columnist Professor Ben Hackett, CEO of Hackett Industry: http://www.thehackettgroup.com, methodology with private experience
Hae Joon RHEE , alias Rick (previous- Hanjin Shipping S&P manager and Researcher) | 10
Contents
What is Eco-ship
Where We Are
Feasibility
Hae Joon RHEE , alias Rick (previous- Hanjin Shipping S&P manager and Researcher) | 11
Assumptions
SOURCE: Alphaliner, 2009 Slow Steaming Studies, Captain YAN
Technology Development Out-Pacing Vessel Operators’ Fleet Management Skills
Feasibility
<Alphaliner 2009 Speed-Consumption Study > <Alphaliner 2009 Loop-Cost Study on HAM-SHA >
Source: Alphaliner, Singapore Source: Alphaliner, Singapore
Hae Joon RHEE , alias Rick (previous- Hanjin Shipping S&P manager and Researcher) | 12
Assumptions
Baltic Exchange Index
Technology Development Out-Pacing Vessel Operators’ Fleet Management Skills
Riverstone Holdings LLC Zhejiang Marine Leasing Co. Oaktree Capital Oaktree & Goldman Sachs Kelso & Company LP Ontario Teachers Pension Plan Seaborne Intermodal (Lindsay Goldberg LLC) Roullier, Group BPCE Perella Weinberg Southern Cross Latin America Private Equity Funds Leasing company formed by Regions Bank and the Royal Bank of Scotland Global Hunter Securities Trailer Bridge JP Morgan Consortium led by WL Ross & Co. (First Reserve Corporation, China Investment Corporation) Alterna Capital Partners Apollo Management Kelso & Company Littlejohn/Northern Kelso & Company Carlyle Eton Park/ Rhone Capital Greenbriar Equity Group Sterling Partners Fortress Investments Blackstone/Cerberus New Mountain Capital
0100200300400500600
Most Recent PEF investment into Shipping Sector
Value($mil)
0200400600800
1000120014001600
2008 2009 2010 2011 2012
DirtyTankerIndex
CleanTankerIndex
• Post sub-Prime PEF Investment into Shipping Sector
Source: Private, ex-Hanjin inner research
Source: Baltic Exchange, UNCTAD
Feasibility
SOURCE: Marine Money, Ship Finance Forum (Singapore), Baltic Exchange
Hae Joon RHEE , alias Rick (previous- Hanjin Shipping S&P manager and Researcher) | 13
Assumptions Technology Development Out-Pacing Vessel Operators’ Fleet Management Skills
SOURCE: Private, ex-Hanjin inner research
Feasibility
Handymax and Below(*)
▪ Annual $600,000~$700,000 Cost Favor in Addition to Minor Frictions to Supply-Demand
Post-Panamax and Above Handymax
▪ Annual $250,000~$300,000 Cost Favor in Addition to Less Supply-Demand Frictions
New Post-Panamax to ULCS, ULCV (and above) (*)
▪ Annual $550,000~$700,000 Cost Favor in Addition, Creation of Additional Volume to Load Full till BEP Level(s)
* Handymax and below class container ships are relatively old, but operating at slower speed than main East-West, thus eco-friendly must have additional merits than just fuel-savings ** New Post-Panamax to ULCS, ULCV class are pretty eco-type, and newly designed vessels must be far more competive than their latest design. (i-phone’s ‘Cannivalization’ in Shipping)
☞
Hae Joon RHEE , alias Rick (previous- Hanjin Shipping S&P manager and Researcher) | 14
Contents
Q&A
Q & A
Hae Joon RHEE Previous Hanjin Shipping
S&P Manager and Researcher
Hae Joon RHEE , alias Rick (previous- Hanjin Shipping S&P manager and Researcher) |
SAFER, SMARTER, GREENER DNV GL © 2014
ECO Ships – Chances and Challenges
Shipping Advisory Hamburg – May 21st, 2014
MARITIME
Discussion with Rick RHEE, former Hanjin Researcher
ECO Ships - Chances and Challenges 02.06.2014
Hae Joon RHEE , alias Rick (previous- Hanjin Shipping S&P manager and Researcher) |
Today’s vessels will have to compete against vessels that are 30% more fuel efficient in the future
02.06.2014 ECO Ships - Chances and Challenges
17
Transportation costs, USD/TEU/1000 NM CONCEPTUAL
1. IMO with respect to required EEDI improvement (MEPC 60/4/14)
2012 2025
Profitable vessels
Unemployed vessels
Transport capacity (TEU)
Profitable vessels
Unemployed vessels
Transport capacity (TEU)
Market price
Demand
Vessel A
Market price
Demand
Vessel A
Efficiency in- crease of new vessels ca. 2,7% p.a. ( = 30% in 13 years)1
SOURCE: DNV ㆍGL inhouse research
Hae Joon RHEE , alias Rick (previous- Hanjin Shipping S&P manager and Researcher) |
The favourability of new optimized vessels vs. average existing vessels is significant at today’s operating conditions
02.06.2014 ECO Ships - Chances and Challenges
18
Cost composition1, USD/TEU/1000 NM SPEED: 19 KNOTS
1. 750 USD/t HFO, operating speed 19 knots, excl. port and canal costs
4,500 TEU Reasons for better cost position of new optimized vessels
12 8
18
7
45
25
-47%
OPEX
CAPEX
Bunker
40
Optimized new
vessel
Average existing vessel
75
• Improved propulsion efficiency due to lower rpm • Higher efficiency of engines • Reduced hull resistance due to optimization for lower target speeds • Better specific costs due to higher TEU intake (at 14t) due to less ballast
• Less steel work due to shorter vessels at same capacity • Better specific costs due to higher TEU intake (at 14t) due to less ballast • Stronger competition of yards for newbuilding contracts
• Less lubrication oil consumption of smaller engines • Better supporting systems of modern engines • Less maintenance effort of shorter vessels • Better specific costs due to higher TEU intake (at 14t) due to less ballast
SOURCE: DNV ㆍGL inhouse research
Hae Joon RHEE , alias Rick (previous- Hanjin Shipping S&P manager and Researcher) |
Panamax vessels show the most significant difference between average existing vessels and new optimized vessels
02.06.2014 ECO Ships - Chances and Challenges
19
Cost composition1, USD/TEU/1000 NM SPEED: 19 KNOTS
1. 750 USD/t HFO, operating speed 19 knots, excl. port and canal costs
2,500 TEU 4,500 TEU 9,500 TEU
14 12
1310
34
50
OPEX
CAPEX
Bunker
Optimized new
vessel
Average existing vessel
77
-27%
56
12 8
18
7
25
45
Average existing vessel
75
-47%
40
Optimized new
vessel
9
136
7
23
33 36
-35%
Optimized new
vessel
Average existing vessel
55
11
76
6
17
24 29
Optimized new
vessel
-31%
Average existing vessel
42
13,1/14,000 TEU
SOURCE: DNV ㆍGL inhouse research
Hae Joon RHEE , alias Rick (previous- Hanjin Shipping S&P manager and Researcher) |
Case study Panamax container vessel (1/3) – with slow steaming the operating pattern changed strongly compared to initial design
02.06.2014 ECO Ships - Chances and Challenges
20
1. 750 USD/t HFO
Initial vessel design Current operations Saving from slow steaming Bunker costs, USD/TEU/1000 NM1
38
75
37
Slow steaming
Slow steaming saving
-49%
Initial consump-
tion
Main dimensions ▪ LPP ▪ B ▪ D ▪ Speed ▪ Container (nominal) ▪ Container (@14t) ▪ Power ▪ Fuel oil consumption
Optimization ▪ Meet design speed at design
draft at sea trial (full load, one point)
▪ Minimize newbuild costs (engineering, building equipment installed)
Actual operations ▪ 24.5 kn ▪ 22.0 kn ▪ 20.0 kn ▪ 17.0 kn ▪ 14.0 kn ▪ Port Speed/draught matrix
EXAMPLE
SOURCE: DNV ㆍGL inhouse research
Hae Joon RHEE , alias Rick (previous- Hanjin Shipping S&P manager and Researcher) |
Case study Panamax container vessel (2/3) – various measures help optimizing the vessel for today’s operating pattern
02.06.2014 ECO Ships - Chances and Challenges
21
1. 750 USD/t HFO, if measures are implemented during dry docking planned anyway
Cost composition1, USD/TEU/1000 NM
Item Saving Invest. Payback1 Saving from retrofitting Bunker costs, USD/TEU/1000 NM1
37
3338
75
5
-49%
Retro- fitting saving
-13%
Today’s
cons.
Slow steamin
g cons.
Slow steamin
g saving
Initial cons.
Bow
Propeller
Turbo-charger
Systems
~ 6%
~ 3%
~ 3%
~ 1%
~ 600 k USD
~ 250 k USD
~ 250 k USD
~ 80 k USD
~ 9 months
~ 6 months
~ 6 months
~ 8 months
SOURCE: DNV ㆍGL inhouse research
Hae Joon RHEE , alias Rick (previous- Hanjin Shipping S&P manager and Researcher) |
Case study Panamax container vessel (3/3) – retrofitting provides advantage vs. market average, but new vessels are out of reach
02.06.2014 ECO Ships - Chances and Challenges
22
Cost composition1, USD/TEU/1000 NM SPEED: OPERAT. PROFILE
1. 750 USD/t HFO, operating speed according to speed profile, excl. port and canal costs
14 128
16 17
7
25
3338
Optimized
new vessel
Bunker
62
40
-9% -41%
OPEX
CAPEX
Retrofitted
existing vessel
Average
existing vessel
68
Whom do you need to beat? The few optimized new vessels currently entering the market? The majority of the 600+ Panamax vessels sailing today?
SOURCE: DNV ㆍGL inhouse research
Hae Joon RHEE , alias Rick (previous- Hanjin Shipping S&P manager and Researcher) |
A market average of bunker cost in USD per 1,000 TEU nautical miles is calculated based on the operating profiles
2a
ECO Ships - Chances and Challenges
Each square represent a ship in the current world container fleet (except vessels with missing data) Economies of scale for larger vessels are clearly shown by sinking trend of the USD per 1,000 TEU NM cost curve A large spread in bunker cost per 1,000 TEU nautical miles can be seen for all vessel size groups
Source: IHS Fairplay, DNV GL
02.06.2014 23 SOURCE: DNV ㆍGL inhouse research
Hae Joon RHEE , alias Rick (previous- Hanjin Shipping S&P manager and Researcher) |
SAFER, SMARTER, GREENER
www.dnvgl.com
ECO Ships – Chances and Challenges
Dr. Jan-Henrik Hübner – Global Head of Shipping Advisory Practice Jan-henrik.huebner@dnvgl.com +49 (0) 40 - 36149 - 8770
ECO Ships - Chances and Challenges
02.06.2014 24 SOURCE: DNV ㆍGL inhouse research
Q & A
Hae Joon RHEE Previous Hanjin Shipping
S&P Manager and Researcher