MARCH 01 2014

cruise update

Environmental requirements

Safety improvement

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all for one ..................................................................................... 16

realising the opportunities of new technology .................... 20

the forgotten wonders of the North atlantic ........................ 22

eeDi first for Hapag-Lloyd ship .................................................26

Latest deliveries ........................................................................... 27

Front cover photo: © DNV GL/terje toftenes

safety improvement – high on the agenda ............................... 4

No compromises on operational safety for aiDa .................... 6

Next-generation environmental requirements ....................... 10

retrofitting cruise ships to LNG by elongation –

a crazy idea? ................................................................................. 12

Content

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editorial

dnV GltakinG a broader View

We welcome your thoughts!

Cruise update

Published by DNV GL Editorial committee: Helge Hermundsgård Magne A. Røe, Editor Lisbeth Aamodt, Production

Design and layout: coormedia.com 1402-033 Printing: 07 Oslo AS, volume 5,000

DNV GL NO-1322 Høvik, Norway Tel: +47 67 57 99 00 © DNV GL www.dnvgl.com

Helge HermundsgårdDirector Global Cruise Center MiamiHelge.Hermundsgard@dnvgl.com

Welcome to DNV GL Cruise Update. I hope this edition of our Cruise Update can provide inspiration to create a safer, smarter and greener cruise industry.

Since our last update, there have been major changes to our organisation: DNV GL con-sists of the legacy DNV and GL organisations. Our ambition is to be the leading classifi-cation society in the cruise industry. Today, we are number one in the newbuilding mar-ket, with more than 60%, and we are number two with respect to vessels in operation. We are humble about the trust yards and owners show DNV GL with respect to creating innovative newbuilding designs and solutions for the future. We are dedicated to help-ing the industry to meet future challenges and constantly improve.

The cruise industry has received a lot of public attention over the past few years. I am proud to be working with an industry that is taking these challenges so seriously and showing its desire to achieve excellence through its actions.

In the strive for excellence, I think there are some key issues that will need attention in future. These are: ■■ Safety – how to increase the focus on performance management ■■ Technology – how to successfully implement new technology to gain competitive advantages

■■ Organisational innovation – how to build high-performing organisations and processes that meet future needs

DNV GL is a classification society that is dedicated to going beyond the traditional and standardised ways of working. We are dedicated to meeting customer and stakeholder needs and to contributing to a safer, smarter and greener cruise industry.

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text: Helge Hermundsgård, DNV GL Helge.Hermundsgard@dnvgl.com

safety improVement – hiGh on the aGendaIn the maritime industry – and in the cruise industry in particular – the drive for improvement is high on the agenda. We believe the key improvement areas on the maritime side of the cruise industry are to be found within Safety Performance Management, Technology Innovation and Organisational Capability Development.

Safety: being compliant versus managing performanceOver the past few years, there have been major initiatives to improve safety and reduce the risk of major maritime accidents. These initiatives address the safety management systems and training and focus on improving the vessels’ technical robustness, etc. The initiatives currently being implemented by the industry represent significant investments and will help to improve safety performance.

The old saying that “What you cannot measure cannot be man-aged” is equally relevant when it comes to safety. We see that matrices are relatively easy to develop for high-frequency and

less critical issues. Where we see the challenge is in develop-ing good matrices for the low-frequency and high-consequence issues.

We need to develop and continuously improve these KPIs and align the appraisal systems to ensure that we reward the right behaviours and sanction the wrong ones.

This is probably an area where the maritime functions can obtain inspiration from the hotel sector. Guest satisfaction is measured weekly and the staff and managers obtain immediate feedback on their performance. We believe that if we could establish per-formance measures addressing safety that can give real-time feedback, we would step change the safety performance with relatively small investments.

Technical innovation – the key to creating competitive advantagesThere are two drivers for technology innovation:■■ New regulatory challenges, e.g. ECAs and Ballast Water■■ The need to improve cost performance

There are still opportunities to optimise hulls and propulsion. More advanced tools are enabling us to find better solutions and designs. We also see opportunities to reduce resistance – for example, hull cleaning and paint solutions.

Several challenges need new and novel technology related to the ECA challenge or other optimisation challenges relating to energy production or consumption. I believe everyone has expe-rienced challenges when introducing new technology, leading to the costs related to either instalment or operation proving to be higher than expected. This is probably one of the reasons for the conservative culture within the maritime industry – few players want to be first movers.

Helge Hermundsgård, Director Global Cruise Center Miami

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Introducing new technology represents a risk; the key here is how to manage the risk in order to realise business gains.

Technology innovation should be a topic on a company’s stra-tegic agenda. The different opportunities/solutions should be managed in the same way that a venture capitalist manages his potential deal flow and investments.

There are several smart solutions in the market, but if we look at the different novel solutions there is limited experience showing they are fit for purpose and will deliver what they promise.

The keys within this area are:■■ Establishing a good overview of solutions and opportunities, including understanding their maturity

■■ Structured qualification processes for solutions in order to build trust and reduce the risk involved in introducing new solutions

■■ It is not only about working with one solution or having ad hoc responsibilities for different initiatives. There must be dedicat-ed responsibilities to manage the portfolio of alternatives, from identification to realisation

This process calls for new and more collaborative approaches between owners, yards, suppliers and class. In this collaboration, the classification societies can play an important role in managing risk and providing 3rd party appraisals of the different solutions.

DNV GL has seen significant gains by applying structured tech-nology qualification processes to establish trust and minimise risk. We urge more owners to apply these processes.

We believe that the company with the most successful process for managing the identification, qualification and implementation of new technology will develop significant competitive advantages and value for shareholders.

A critical enabler for success is organisational excellenceThe maritime industry is very traditional with respect to organi-sational set-up and competence profiles. The way in which we operate today has not changed much over the past 10-15 years. Developing organisational capabilities for the future requires foresight about IT applications and the fostering of strong techni-cal and operational insights, including the analytical use of data to manage and optimise the operations. This will not only require the traditional chief engineer profile but also a combination of a chief engineer/chief electrical engineer with a more analytical profile.

Probably the most critical building block is leadership capabili-ties. Three managerial characteristics need to be strengthened:■■ Quantitative approach – using scientific methods to analyse problems and finding solutions using statistical and math-ematical techniques – this will lead to faster and more robust decision-making

■■ Systematic approach – developing systems and processes and continuously improving their performance

■■ Situational awareness – understanding the dynamics in complex situations and being prepared to manage future challenges and issues

These are not a substitute for in-depth technical and opera-tional insight, they are additional characteristics that need to be strengthened in order to build the organisation of the future. ❚

naViGatinG Complexity

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text: Magne a. røe, DNV GL Magne.a.roe@dnvgl.com

no Compromises on operational safety for aidaIt looks like a high-tech mission control room, with its twelve flat screens in two rows on the walls and at least one operator at the controls at all times. The purpose is to monitor all ships in AIDA’s fleet of cruise ships 24/7 with a delay of mere seconds. Currently, there are ten cruise ships in daily operation, with two more to come. There is one screen for each ship, showing its exact position, direction of travel along the predefined routes and all other ships that can be seen on each vessel’s radar. The status of every watertight door on each vessel is also displayed. If any irregularities cannot be explained, like deviating from a course to avoid collisions, should occur, the operator will be in communication with each ship within seconds. Operational safety is key for AIDA and we are at the Rostock headquarters to discuss safety with Jens Lassen, Senior Vice President, Marine Operations.

In your view, what is the crucial element to ensure safe operations?

Passengers do not accept coming home in a life boat, or not com-ing home at all. The safety of the ship, guests and crew is people-dependent, whichever way we consider it. If something should go wrong, then we are all dependent on making the right decisions at the right time. This requires a focused effort in order to select the right leaders, train and communicate with them. We put lead-ership capabilities first and foremost and when looking for lead-ers we establish psychological profiles for all our potential candi-dates for the Captain’s position. The Captain is responsible for the ship’s safety and may be considered as the Managing Director on board and the one we have to put our trust in for the daily safe operation of our ships and as the top leader in an emergency. To be the Captain of a cruise ship is a huge responsibility and only a few have the right profile to qualify for such a job. Enabling our Captains to manage their ships in terms of people, systems and technology is one of the main elements in ensuring the high safety levels AIDA provides - accidents are just not acceptable.

In practical day-to-day operations, how does this safety approach work?

All ships need to be operated in accordance with the AIDA vision for absolute Safety, Efficient and Happy Ships. The onboard Exec-utive Team, consisting of the Chief Engineer, the Club Director,

the Staff Captain and the HR Manager under the leadership of the Captain are responsible for executing according to this vision. They are at all times required to be focusing on the safety per-formance of the ship. As the leader of the Executive Committee the Captain must be able to communicate his expectations, plan, ensure execution, train and verify the safety awareness and per-formance of the entire crew. To ensure compliance the Captain must be a good communicator, must provide clear directions and must demonstrate clear onboard leadership every day. To man-age this responsibility; overseeing the safety for upwards of 2500 passengers, 650 officers and crew and a complicated, technologi-cally advanced and valuable asset operating at sea, the Captain needs to be an experienced and proven leader. The Captain needs to emit the trust and authority vested in the position. All candidates for such a leadership role need an outstanding track record and a matching psychological profile. Based on these requirements we never hire a Captain “off the street” – but let individuals sail with us for as many years as possible before selec-tively promoting them to the Captain position.

How do you ensure that this really happens?

Firstly, potential candidates for a Captain position are identi-fied already at the first officer level and monitored through the senior ranks by a group consisting of HR specialists, the shore based Fleet Captain, Company Management and most impor-tantly their peers and superiors on board. An agreed list of

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Jens Lassen is a Norwegian national who has been at sea since he was six weeks old – on the family’s old Colin archer wooden sailboat. He is a trained naval architect and has worked for McGregor, DNV, V-ships, ulstein Marine, royal Caribbean international, stolt Nilsen and rickmers. He joined aiDa in the spring of 2013.

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several candidates eligible for promotion to the next senior posi-tions, both on deck and in the engine room, always exists and is reviewed and updated at regular intervals. The operational com-pliance is monitored through regular internal and external audits. In addition senior management visits all the ships annually for a three day operational review with the onboard Executive Team to ensure that their operations are compliant and that the large organisation on each ship is being led and operates in accord-ance with the company’s vision, strategies, goals and procedures. Furthermore AIDA organizes two senior officer conferences a year plus individual follow up of Captains in the office in addition to the company required training courses. For any ship Captain, being the Captain on a cruise ship must be the ultimate job. As management we need to ensure that they exercise the authority vested in them in accordance with the company strategy and val-ues. At AIDA our Captains are expected to be the senior onboard leader responsible for ensuring safety for all – and an outstanding delivery of our product. Our ships are our face towards our cus-tomers and represent the entire product facilities of our company.

What developments are important for the future?

In shipping the human factor is still of critical importance and the Captain’s decision power remains unchallenged. We will, how ever, see more and more technologically advanced ships with greatly improved communication and remote monitoring systems. Our goals are reached through amongst others our Fleet Operations Center. They provide decision support for our onboard teams for risk mitigation and operational standardiza-tion. In AIDA we will be concentrating on selecting, training and developing our senior leaders both onboard and ashore through focused professional and leadership training.

AIDA Cruises have two new ships on order which will rank among some of the most technologically advanced cruise ships in the world. We have to ensure that our Captains and their Manage-ment Teams remain up to date in terms of competence and the handling of the new ships. When it comes to safety levels, we are working on a failure rate scale pretty much as the airline industry is doing. We need a benchmark in order to improve and this is one task we will focus strongly on in the near future. If we can quantify our safety level overall, it will be much easier to set achievable goals and measure future and further improvements in safety. ❚

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SOx, NOx, PM, BWMS, AMS, EEDI, SEEMP, MRV, IHM; the list of abbreviations is long and growing. What they all have in common is that they embody key pieces of environmental regulations that have recently entered into force or are likely to do so in the near future. However, it is crucial to realise that new environmental regulations entering the development pipeline will be just as challenging to respond to as anything we see today.

What are these emerging issues? The short answer is hull bio-fouling, soot emissions and underwater noise. While the work is still at an early stage, IMO has recognised all three as significant environmental issues and put them on the formal regulatory agenda. The time for the maritime industry to have its say is now.

Regulations take time – but are as inevitable as death and taxesOne of the key characteristics of developing international maritime regulation is obvious; it takes time. The timeline for a regulation is normally long, with a number of complex and time-consuming steps. There are of course exceptions. The post-9/11 International Ship and Port Facility Security Code was fast-tracked for obvious reasons, and the EEDI and SEEMP were showcases of rapid action, taking “only” five years from inception to entry into force.

The normal state of affairs is different; it is not unusual to see 10-15 years elapse from the date when an issue is introduced until the resulting regulation enters into force, see figure next page. The flip-side of this is that once an issue has entered the regulatory pipeline it rarely gets dropped. In practical terms, the implication is that the issues that will have developed into regula-tions in a decade or so are the ones that are presently recognised as concerns.

Clean hulls, smokeless exhaust and quiet ships?That is where we see hull biofouling, soot and underwater noise right now. The confluence of factors focusing attention on these three issues leads us to believe that we will see mandatory

text: eirik Nyhus, DNV GL eirik.Nyhus@dnvgl.com

next-Generation enVironmental requirementsManaging the impact of environmental regulations now entering into force is one of the most challenging tasks facing shipping this decade. Nevertheless, the shipping community should start thinking about the potential business impact of emerging regulations.

eirik Nyhus, Director environment

“Industry needs to engage strongly now, not later! Doing otherwise will make business needlessly difficult ten years down the road.”

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regulations addressing all of them. While the timing remains unpredictable, we would not be surprised to see regulations agreed on towards the end of this decade and entering into force in 2020 – 2025.

The work on biofouling has so far led to the development of early-stage voluntary guidelines. Research indicates that bio-fouling is a significant mechanism for species transfer by vessels which is not sufficiently covered by the anti-fouling or ballast water management conventions. Draft guidelines were agreed by IMO in 2011. The EU and the US Coast Guard are also develop-ing and implementing their own regulations which could influ-ence IMO. The US raised the issue of underwater noise with IMO in 2008 as a matter of increasing public concern, with a focus on its possible impact on cetaceans. Whales have a special place in the public consciousness in a number of countries and the US has for example established a 10-knot speed limit in whale breed-ing grounds as a general protection measure. Underwater noise, primarily from propeller cavitation and machinery, is thought to have a detrimental effect on both whale breeding and navigation. Accordingly, IMO has put the issue on the agenda and has estab-lished a US-led correspondence group that is already preparing draft guidelines.

The work on soot, or black carbon (BC) as it is more precisely known in technical jargon, is less mature, but is attracting a great deal of attention, including from outside IMO. Black carbon can be described as “a strongly light-absorbing carbonaceous aerosol produced by the incomplete combustion of fuel oil”. It is recog-nised as contributing significantly to both global warming and accelerated Arctic ice melting, and as such is deemed to be a significant problem. Shipping’s contribution to it remains unclear, but IMO is presently working on appropriate definitions and measurement methods and will consider potential control meas-ures and regulations.

All three issues, hull biofouling, soot and underwater noise, could be subject to regulation as early as in 2020. The regula-tory response and attendant mandatory measures are obviously not clear at this time. However, educated guessing neverthe-less points towards soot being handled either by fuel change or smoke-stack particle filters, biofouling by mandatory hull cleaning under controlled circumstances, and underwater noise by chang-es in propeller design and acoustically insulating noisy equipment from the hull. It goes without saying that all of these will represent significant operational and technical challenges for the shipping industry.

What price silence?The shipping community is presently struggling to cope with what is perceived as a veritable “tsunami of regulation”, while also keeping their ships running in a highly challenging business environment. Needless to say, lifting their eyes from the day-to-day concerns and trying to think strategically about what is going to happen in ten years’ time can seem like a waste of time and energy. Unfortunately, as a result, the general industry response tends towards an “I’ll deal with it when I see it” attitude. Unfor-tunately, as most influence on the shape of regulation can be wielded at the early stages, this is not the best response when it comes to shaping the final outcome of regulation and preparing for its business impact.

Industry needs to engage strongly now, not later, if it wants to ensure that what emerges from the regulatory pipeline has the desired environmental effect, is operationally practicable, techni-cally feasible, reasonable from a cost/benefit perspective and safe. Owners and operators need to start thinking strategically about the potential business impact. Doing otherwise will make business needlessly difficult ten years down the road. ❚

Development of rules

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text: alexandros Chiotopoulos, Gerd-Michael Würsig, atle ellefsen, DNV GL alexandros.Chiotopoulos@dnvgl.com Gerd.Wuersig@dnvgl.com atle.ellefsen@dnvgl.com

retrofittinG Cruise ships to lnG by elonGation – a Crazy idea?The cruise industry is facing new and stricter IMO air emission regulations, requiring the installation of scrubbers, the use of LNG as fuel, or a changeover from heavy fuel oil (HFO) to marine gas oil (MGO). The difference in price between MGO and the HFO currently used can increase operational expenses by up to 40 per cent. Considering the cost of investment and fuel prices, LNG can be a cost-beneficial solution that meets this challenge. In this article, the authors present the main findings from a study examining the possibility of retrofitting existing cruise ships to run on LNG as fuel.

elongation concept with prefabricated LNG tanks. (illustration: atle ellefsen)

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Conversion principleConverting an existing cruise ship to run on LNG can in principle be done by the following methods:

1. Taking the ship out of operation and installing the LNG tanks and fuel handling systems in the existing hull. Such a retrofit will reduce the number of cabins and will involve technical complications as the LNG tanks require more space than HFO or MGO fuel tanks and such free space is not available on the ship. In addition, this is time-consuming and represents a loss of revenue due to the lengthy off-hire.

2. Inserting a new “LNG-ready” prefabricated mid-body section, containing all the LNG systems additional cabins and public spaces, into the ship. Such a retrofit can be done in a few weeks, the ship does not need to go on a lengthy off-hire, and the passenger capacity will increase by approximately 10 per cent. The investment is limited to approximately 10 to 12 per cent of newbuilding costs.

In this study, we focus on the second option, which is the most feasible solution from a technical and financial perspective. The strongest candidates for conversion are ships between 40,000 GT and 143,000 GT which represent almost 55 per cent of the fleet. Ships over 143,000 GT have been excluded as their length is already at the limit of present port capacities.

Many ships have been lengthened in the past; for example, the Enchantment of the Seas was lengthened in 2005 by adding a 22 m long mid-body section in order to increase the number of cabins.

Generally, every ship has unique characteristics and whether or not it is a good candidate for conversion needs to be investigated on a case-by–case basis.

Technical considerationsThe minimum elongation limit for a cruise ship is half a main vertical fire zone (approximately 22 m), and the maximum could be a complete fire zone (approximately 43 m). For the complete fire zone, the increase in the longitudinal bending moment will require a corresponding amount of additional steel in order to maintain the required section modulus – deemed too costly to be seriously considered. Thus, the most feasible option for a poten-tial candidate vessel will be a new part that is half a fire zone in length.

Our technical feasibility study found that in a 23 m compartment, the maximum possible volume of LNG is approximately 1500 m3, stored in a type C tank, due to design and structural constraints. The addition of new cabins will increase the total number of cab-ins by approximately 10 per cent. With an LNG capacity of 1,500 m3, approximately 70 – 80 per cent of all existing cruise itineraries can be operated. In order to cover the remaining routes, which are longer and require more fuel, the operator can either use the ship’s dual fuel capabilities and burn MGO/HFO, depending on

the location, or perform a second LNG bunkering operation dur-ing the voyage.

Before deciding on a conversion, it is crucial to involve the Flag State Administration at an early stage, since a lengthening is defined as a major conversion. The new part of the vessel must comply with the applicable SOLAS regulation.

A series of issues within hull, structure and machinery must be considered as part of the conversion. This includes for example an assessment of damage stability, location of bunkering station, and the ship’s power capacity. In addition, there will be a few operational issues that must be considered, such as slow speed manoeuvring capability in port of the now longer ship. Please see the full report for a detailed overview of the technical and opera-tional issues that should be investigated.

Below we present some of the benefits and challenges for elon-gation and use of LNG as fuel:

Benefits ■■ Most likely improved revenue■■ Increased number of passenger and crew cabins■■ Improved environmental footprint■■ Energy efficiency may be increased by installing flow-improving appendages during dry-docking

■■ Additional public space and retail capacity ■■ Additional open deck spaces■■ Reduction of main engine maintenance hours■■ Less engine crew required■■ Cheaper lubricants■■ Cleaner engine room■■ No soot on decks – less cleaning and wash water needed■■ No need for exhaust cleaning devices or catalytic reactors■■ Slightly lower noise level in engine room

Current challenges■■ Design and retrofit cost compared to switching on distillates■■ Time required for ship to be taken out of service for the retrofit operations

■■ Elongation may reduce the range of ports of call■■ Bunkering challenges■■ Statutory challenges■■ LNG fuel cost pricing challenges■■ LNG infrastructure challenges■■ More tank space required to accommodate enough LNG to cover all the itineraries

■■ Onshore bunkering logistics are still under development ■■ Rules still under development■■ More sophisticated fuel equipment is required■■ Public perception not fully known

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Financial assessmentThe conversion cost can be broken down into different catego-ries; capital expenditure, including costs for the LNG system, engine room, and mid-body section; and operational expendi-ture, including consumables, maintenance, and fuel. In addition to the cost of actual retrofit, the cost of having the ship off-hire needs to be considered. On the other hand, there is an additional increase in profit from the larger number of cabins and this is the main benefit of the LNG option compare to the alternatives.In order to examine the financial attractiveness of the retrofit concept, we performed a high-level financial analysis comparing the LNG system to MGO propulsion and to HFO with a scrubber, which is considered to be the next best alternative. For the high-level analysis, a 23 m mid-body section was inserted in a 75,000 GT ship increasing the capacity by 120 new staterooms.

The financial results are presented below. The additional income and operational costs resulting from the new cabins for the LNG case have been considered when calculating the payback time and four scenarios have been developed. A spread of 0 – 50 per cent profit on the revenue has been applied to represent the potential economic gains of the elongation. An LNG price of $14/MMBtu has been assumed which is approximately 10 per cent below US HFO price and 40 per cent below US MGO price.Please see the full report for an overview of all the assumptions used in the financial analysis. As illustrated in the graph above, the payback time of LNG com-pared to MGO is between 4-8 years, depending on the profit per-centage of the revenue, as outlined above. For the upper profit margins of 30 and 50 per cent, LNG is an attractive alternative

compared to the scrubber option after five and half and nine years, respectively.

Conclusion Retrofitting an existing cruise ship so that it can use LNG fuel is a feasible option for a number of existing ships. A specific cruise ship’s retrofit potential depends on the ship’s design and struc-tural characteristics. This study has shown that retrofitting cruise ships to run on LNG is not only technically feasible but can also be financially attractive option, depending on the LNG price. LNG propulsion is a unique solution in that the ship achieves compli-ance, saves money on fuel, and generates extra revenue from additional passenger capacity. Certain ships now have a window of opportunity to take advantage of the potential financial ben-efits of LNG propulsion.

The high-level analysis performed and presented above is part of the DNV GL LNG Ready service. The LNG Ready service has been developed in order to assist ship-owners, operators, yards and designers in identifying the most attractive compliance option for their ships. For more information regarding the service, please contact the authors. ❚

The full report is available for download as pdf using the following link:

www.dnvgl.com/cruiseships

NPV oF CumulATiVe Added CoST [millioN uSd]

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Celebrity Equinox is a solstice-class cruise ship built by Meyer Werft in Germany and is the second of the five solstice-class vessels, owned and operated by Celebrity Cruises.

Occupancy: 2850tonnage: 122000Length: 1041 ft

Beam: 121 ft Draught: 27 ft Cruise speed: 24 kts

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all for one

text: Damien Devlin, Blue-C

In the aftermath of recent storms that have troubled the cruise industry, Carnival Corporation has refreshed its leadership team and is looking ahead to clear skies.

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all for one

One of Carnival Corporation’s new team members is Chief Strategy Officer Josh Leibowitz, who recently joined corporate management with three main areas of responsibility: head of corporate strategy, cross-brand marketing and insights, and pur-chasing and supply chain.

Leibowitz arrived at Carnival from his post as Managing Partner of McKinsey & Company’s Miami office, where Carnival was a key client. Leibowitz’s specialty at McKinsey was in big data and marketing, and it is no coincidence he sees real opportunities for Carnival to use information in exceeding guest expectations.

His first priority upon joining Carnival was to get under the skin of the company. To do so, Leibowitz studied customer data, read thousands of comment cards, visited cruise ships from each of Carnival’s global brands, and talked extensively to guests and travel agents. “The two things that shone through above all else were our incredible breadth and scale of offerings,” he said, “and that we have highly motivated, passionate and skilled people throughout the company.”

Focusing on its strengthsIn the fall, it became clear to Carnival Corporation CEO Arnold Donald and his leadership team that one of the company’s great-est opportunities was to leverage the company’s industry-leading breadth and scale, and establish a “one team” mind-set through-out the company. Carnival is now embarking on a path to use its unmatched global presence and international network to drive efficiency, enhance cost-saving and revenue-generating oppor-tunities, to use data to improve quality and provide experiences that exceed guest expectations every time.

Carnival consists of ten distinct brands that include Carnival Cruise Lines, Holland America Line, Princess Cruises and Sea-bourn in North America; P&O Cruises and Cunard in the United Kingdom; AIDA Cruises in Germany; Costa Cruises in Southern Europe; Iberocruceros in Spain; and P&O Cruises in Australia. Together, the ten cruise lines currently operate a fleet of over 100 cruise ships, making Carnival Corporation the largest cruise com-pany by far and one of the largest travel and leisure companies in the world. This puts them in a position to call upon knowledge, experience and technical know-how unlike any other.

With increasing globalization, it makes sense to harness the power of operations with a higher degree of collaboration, coor-dination and communication, to the benefit of all the brands.

Donald, who became CEO in July after twelve years on the Carnival board, puts it like this: “Operating our brands indepen-dently has been the basis for our great success and has led to our industry-leading position. The brands will remain independent, so you can think of us as ten brands, yet one global company.”

In this light Carnival is unique in its breadth of brand choice, offer-ing a brand for every taste, but also a collection of strong national

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brands that all have long histories and are well-established in each region, and are generally tailored to a certain group of consumers.

Donald emphasises: “We want to leverage our scale far more than we have historically. We’ve begun a change in how we work together and have agreed on common objectives, to facilitate those efforts.”

Together as onePreviously each brand had different specifications for everything they purchased, but Carnival is now unifying standards and employing international networks across the corporation to get better prices and quality from suppliers. This includes everything from deck chairs to food and beverage, to the technical equip-ment on its vessels. One example is the recent hire of a team of experts for seafood purchasing, in order to enable all of the brands access to the best quality seafood at the best prices, no matter where they are in the world, while maintaining a focus on local sourcing wherever possible.

Another key tool in the fine-tuning of the corporate machinery is the set of measures and dashboards that monitor the entire global fleet, showing performance of the 100-plus ships in near-real time. Statistics from this system are extremely useful for making improvements in areas such as fuel efficiency. Fuel is the company’s largest expense, and with such a large fleet, even small reductions in fuel consumption make huge differences in the bottom line.

But leveraging corporate synergies is not just about getting cheaper deals from suppliers. The company is also focusing on

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Josh Leibowitz, Chief strategy Officer arnold Donald, CeO

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“I believe it’s time for the industry to take the story back.”

taking full advantage of its global competence, working more closely together across brands, calling on global expertise on nearly any subject. “It doesn’t make much sense for our experts in a given area to be working individually. Carnival will prosper if we get these experts talking and cooperating on projects,” says Leibowitz.

Sales results support new strategyWhile it goes without saying that recent events in the cruise indus-try have provided Carnival with a host of challenges, Leibowitz believes its brands are now in a strong state of recovery. “Our recent sales and focus group results are testament to the improvements our efforts have brought both for the company and for customer experience.” Results from Carnival’s largest brand, Carnival Cruise Lines, bear this claim out, recording a brand per-ception improvement of more than 75 per cent in the past few months, and a single-month reservations record in January 2014.

Leibowitz believes that the cruise industry can learn from the hotel and airline industries, particularly on revenue and yield management, but also on improving value and using retail con-sumer targeting and segmentation to anticipate consumer trends. Ultimately, the goal is to not just increase loyalty that results in return cruises among existing customers, but to motivate consum-ers to take their first cruise with a Carnival brand.

In response to recent negative impressions about the cruise industry, often fanned by excessive media attention, the industry and Carnival are making strong progress in regaining public con-fidence. Leibowitz believes the best way to do this is to continue to deliver above expectations.

“My impression is that these events have exposed barriers that people already had,” he said. “I believe it’s time for the industry to take the story back. The cruise industry has always owned the story, but the media has in the last few years taken it, and now it’s time for us to restart the narrative.”

“It is interesting to note that with all the negative publicity, you would think that the cruise industry is in decline,” he added. “But this is not the case, as every day, all around the world, we are fill-ing ships with new and return customers seeking great vacation experiences.”

One of the biggest challenges, and one with potentially high rewards, is getting those first-time cruise guests on board, cre-ating the opportunity to prove that cruising is a great vacation option at a great value.

Carnival’s future is the industry’s futureCarnival is currently expanding in markets, particularly in areas where it has momentum, Asia and Australia in particular; the Costa and Princess brands are already highly identifiable in Asia, where the Carnival team is establishing a strong presence. The company has also established new ports in North America, con-firming the overall goal of continued global growth.

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“We need to continue to win back hearts and minds,” says Leibowitz. “The industry will continue to grow. With only a fraction of the world’s population having been on a cruise, the untapped opportunities are huge, and we are doing everything we can to continue growing our business. I think that after going through some hard times, the next decade could be cruise’s golden age 2.0.”

Leibowitz has a special relationship to travel, and to cruising in particular: “When I look back on my own life, I was lucky enough to grow up in a family that enjoyed a lot of cruises. It had a deep impact on who I am and how I look at the world. In working for Carnival, what I find most rewarding is helping encourage other people to enjoy that same experience, one where you appreciate both the beauty of the ocean and the land.”

In the spirit of Carnival’s increased focus on collaboration, that is a sentiment that all of its brands would enthusiastically agree with. ❚

DNV GL

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realisinG the opportunities of new teChnoloGy- a key success factor for future-proofing today’s newbuildings

Owners have experienced challenges when implementing novel technology and these have resulted in unexpected costs and operational difficulties. In order to realise the benefits of new technology, minimise risks and achieve financial benefits, owners should engage in more structured qualification processes.

There are basically two drivers for the utilisation of new and novel technology; new and stricter regulatory frameworks and the need to find more cost-effective solutions. In the market today, there are several providers that offer new solutions claiming to enable cost-effective regulatory solutions or to help reduce e.g. the fuel bill. The challenge, however, is that there is only limited operational experience proving that these technologies work as intended for the planned lifecycle of the equipment.

We see a need to establish more structured and analytical approaches to assess and qualify new and novel technology as being fit for purpose.

Fit for purpose definition:Systems and components that are fit for purpose are good enough to do the job they were designed to do.

When looking into cases where systems or components are not fit for purpose, we see that the cause of issues may be on several steps in a system’s “lifecycle”. The issue may be a result of substandard activities in any of the above main steps in the supply chain.

text: Helge Hermundsgård, DNV GL Helge.Hermundsgard@dnvgl.com

1. Clarify expectations and functional requirements

2. Map technology and identify degree of novelty

3. identify threats and uncertainities

5. execute the plan: testing, documentation, design changes, procedures, manage plan and residual risk

4. identify and agree on actions to reduce risk and to resolve issues (develop plan)

6. Verify that the results are adhering to stakeholder expectations/requirements

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The road map for ensuring that systems and components are fit for purpose follows a six-step approach:

Step 1: Clarifying expectations and functional requirementsThis step is the foundation of any qualification process and should clarify requirements as to the system. Some issues that need to be addressed are:■■ Performance ■■ Robustness ■■ Reliability ■■ OPEX■■ Maintainability and usability■■ Regulatory frame conditions■■ Lifecycle expectations■■ Integration requirements■■ Etc.

Step 2: map the new technology and degree of noveltyThere are different degrees of maturity. Assessing the different areas using the following matrix can help to gain better insight into how thorough the process needs to be.

The different ratings indicate the magnitude of the challenge:1. No new technology uncertainties – traditional contracting

strategies to be applied2. New technology uncertainties – a light version of the qualifi-

cation process should be applied3. New technology challenges – a more thorough process should

be applied4. Demanding new technology challenges – will require a struc-

tured and thorough process to secure successful selection and implementation

Step 3: identify threats and uncertaintiesThreats and uncertainties should be identified using risk tech-niques. The key success factors during this phase are to bring the right persons with the right background into the discussion and ensure that all the different aspects of the supply chain are represented.

Step 4: identify and agree on actions to reduce risk and resolve issuesBased on the identified and prioritised risk areas, determine clear actions and measures to reduce and mitigate risk. These should also include the development of test protocols to ensure that the system is performing according to plan. Clear responsibilities for performing the different activities should be assigned, with clear deadlines.

Step 5: execute the planThis is probably the most challenging phase. It requires strict project management and unambiguous processes for tracking and monitoring the residual risk.

From experience, we know that this part results in changes and that there will therefore be a need to update initial risk assess-ments and mitigation plans. This is a continuous process that must be managed properly, with frequent status meetings and reporting in order to deliver value.

Step 6: Verify that the results adhere to stakeholder expectations and requirementsThe final step is to verify that the end-result is in accordance with expectations. The challenge here, of course, is that there are requirements as to the full lifecycle of the system and component. The practical solution here is to agree on follow-up verification after a certain number of running hours, etc.

DNV GL advocates the increased use of structured qualification processes for new and novel technology. Past experience has shown us that investing additional effort in qualifying technology has a very good payback. ❚

Design and development

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operationOperation and maintenance

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DNV GL

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No, it’s not the TitanicOn 3 July 1952, clearing the Ambrose Light, Commodore Harry Manning pushed the throttle to full speed ahead, releas-ing 250,000 horsepower on America’s new superliner. Three days, ten hours and forty minutes later, the United States, on her maiden voyage, passed Bishop Rock at an average speed of 35.59 knots – depriving the Queen Mary of the Blue Riband by a margin of ten hours. During her sea trials, the United States officially reached 43 knots, her top speed remaining an official secret. Spectacular in every way, her superstructure was built in aluminium in order to save weight. Her funnels were the tallest in the world. Her hull shape remained a government secret until the eighties. Her designer, doyen naval architect William Francis Gibbs was so obsessed with fire safety the only wooden fittings on board were the butcher’s block and the grand piano. Steinway refused to build a piano in alloys, sardonically asking Gibbs if the pianist had to be fireproof as well. Commodore Manning had to replace his wood-encased, elaborate shortwave radio with a

similar model in metal. Not only wooden frames were forbidden, so were oil paintings. Despite the lack of wood, the ship’s ultra-modern, custom-made metal and frosted glass interiors were both exquisite and in compliance with the US Navy’s fire safety regulations. Whether you were a Kennedy, a Windsor, Princess Grace or Marlon Brando, sailing on the “Big U” was considered the ultimate crossing for twenty years.

Last year, I happened to post a photo of the United States as my desktop background. Realising this was not good corporate policy, I removed it after a few weeks. However the picture gen-erated many comments from my colleague naval architects and marine engineers: “You’re supposed to use a corporate desktop background”, “Wow, what ship is that?” and finally “Hey look – the Titanic!” In fact, very few could name the ship. Admittedly, no blockbuster movie has starred the United States. She never sank, and today we all cross the Atlantic by airplane. However, failing to see the difference between a four-funnelled, Edwardian steamer and a sleek 1950’s greyhound with two tricolour stacks is some-what disturbing. To be fair, everyone who works in the shipping industry does not necessarily have to be a history buff like me. At a recent visit to Harland and Wolff – the Titanic’s builders – I was awarded the distinction of qualified “Titanorak” by the yard’s man-agement after passing a tricky quiz containing questions that only anoraks like me could answer.

So if the epic United States has gone into oblivion, what about the other magnificent liners of the twentieth century? Asked to write a historical feature, I thus decided to choose a handful of my personal favourite transatlantic liners – excluding the Titanic – to hopefully spur interest, remind the public that before man went to the moon the only way to cross was by ship – and finally that transatlantic liners – including the Titanic – were not cruise ships! In the old days, the liners were the ultimate means of transport, looked upon as the greatest marvels of the universe. Considering they were designed by people in gentlemen’s clubs and built on logs by blacksmiths, they were indeed massive achievements of their time. They were as famous as movie stars. Every morning paper on both sides of the Atlantic and every newsreel included the berthing time of the Queen Mary, who her commodore was and the “who’s who” passenger list. Then there were the

text and illustrations: atle ellefsen atle.ellefsen@dnvgl.com

the forGotten wonders of the north atlantiC

atle ellefsen, Chief Naval architect

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the Mauretania leaving southampton on her final voyage

emigrants, all the tens of millions of the lesser famous that waved farewell to their loved relatives, never to return. The emigrant trade constituted the lion’s share of the ships’ revenues, and the liners did indeed provide comfortable accommodation and good food even in third class. However, what really distinguished the ships were performance, fashion and fame.

SpeedAny qualified Titanorak will spot the Mauretania (1907) in old film clips in Titanic documentaries, standing in for the much less recorded White Star liner. Both had four funnels and vertical bows, but they had very different design objectives. Preceding the Titanic by four years, the Newcastle-built Mauretania and her ill-fated sister the Lusitania were built for speed, while White Star’s model was intended to offer comfort rather than record-breaking passages.

Not that the “Maury” was spartan, her interiors were flamboyant in an Edwardian club-like style with a lot of fumed oak and brass. However, she was a rattler, pitcher and roller and, as a Brit would put it, “somewhat rather shaky” at high speeds in a seaway – and no wonder. With 78,000 steam-turbine horsepower and quad-ruple screws, the Mauretania remained the fastest ship across the Atlantic for an amazing 20 years, averaging a speed of 26.06 knots – her speed improving with age. Not until 1929 did she lose the “Blue Riband” to the brand new German liner Bremen. How-ever, “Maury” fought back, forcing out an incredible average of 27.22 knots – just 0.61 knots shy of Bremen’s new record. Surviv-ing WW1 as a troop transport and hospital ship, she was painted white in 1933 and used for cruising. When she was broken up in 1935, her steam piping interior looked as good as new. The Mau-retania was the first superliner and one of the most famous and reliable ships of the last century. She transformed Atlantic travel from a stuffy and lengthy endeavour into a grand experience – in all cabin classes.

DNV GL

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luxuryLaunched just 38 days after the Titanic went down, the Hamburg America Line’s Imperator (1913) was the first of three sister ships built by Blohm and Voss under the leadership of Albert Ballin, the legendary director of the Hamburg America Line. Ballin is still considered one of the most influential shipping executives of the 20th century and the father of modern cruise ship travel. Ballin’s liners had ensured Germany’s dominance of the Atlantic run for decades. Ballin’s crowning achievements, the Imperator, Vaterland and Bismarck, were almost a fifth larger than the world’s largest ship up to then – the two-year-old Olympic – and these German three-funnelled “monsters” remained the world’s largest ships for the next twenty-five years!

When the Imperator neared completion, Ballin suddenly realized that Cunard’s upcoming Aquitania would be a few feet longer. To regain the lead, a monstrous thirty-foot bronze figurehead – the “Imperial Eagle” – was perched on Imperator’s bow giving the ship quite a sinister look. The sculpture was early on damaged

in a gale and the remains removed. The key innovation of the Imperator was her interior design, a forerunner of today’s spec-tacular, eclectic cruise ship experience. A frequent guest at the London Ritz Carlton, Ballin hired not only the hotel’s famous Alsatian architect Charles Mewès to design the interiors, but also the hotel’s chef Auguste Escoffier to create the first à la carte restaurant at sea – available at a stiff extra cost. With grand salons in French eighteenth-century style and opulent palm courts, the Imperator was a monumental, floating imperial palace. After WW1, the Imperator was seized under the Treaty of Versailles, thereafter seeing long and successful service as Cunard’s flagship Berengaria. She was scrapped in 1938 after being destroyed by fire.

High societyIn the middle of the roaring twenties, the first full-scale liner since WW1 slipped off the stocks at St. Nazaire on 14 March 1926. Smaller than the Titanic and with three tall funnels, she already looked out-dated, but on the inside the Ile de France was a

the Berengaria (ex-Imperator) taking on passengers by tender.

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the Bremen in high seas.

trendsetter from her inception – le style paquebot. Departing from the pre-war ornamental embellishment of the Imperator and Olympic, her vivid art deco interiors embraced modernism. She was to become the Atlantic’s most popular real-life stage for the famous, the avant-garde and the scandalous. Fuelled by the US prohibition and the quest for French gaieté, she became the overwhelming choice of American millionaires, stars and intel-ligentsia. Noel Coward wrote a song about her. Maurice Chevalier repeatedly had the chef prepare his mother’s mutton stew for first-class dinner. Travelling in cabin class, Ernest Hemingway bor-rowed a dinner jacket and gate-crashed first class in order to dine with a friend – only to dash over to Marlene Dietrich offering his services as a tablemate, thus starting the legend of “Papa and the Kraut”. Other regulars were the great conductor Toscanini, who would travel on no other ship. Silent movie stars such as Gloria Swanson, Buster Keaton, Douglas Fairbanks, Jeanette MacDonald and Tallulah Bankhead also lived out their bonne vivante on the “Ile”, considered to be the most romantic ship on the Atlantic. Surviving WW2 as a troop transport ship and with her third funnel

removed, she remained in service until 1958. In 1956, she was again in the news, rescuing the survivors of the Andrea Doria. On her final voyage to the scrappers, the Ile de France became a movie star herself. Despite fierce protests from the French public, including a petition from President Charles de Gaulle, she was partially sunk and blown up by Hollywood filmmakers as a prop in the movie “The Last Voyage”.

designThe jazz age crashed into a long period of depression and war. Among the legendary superliners planned at the end of the golden twenties were first and foremost French Line’s Normandie (1932) and Cunard White Star’s Queen Mary (1936) – the latter abandoned on the stocks for two and a half years due to financial difficulties. Since the Queen Mary still exists as a hotel in Long Beach and is not really that forgotten, purist readers will now expect five pages about the magnificent Normandie. Not so, because there are two other period wonders that are much more forgotten. Although North German Lloyd’s Bremen and Cunard

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White Star’s Queen Elizabeth were over ten years apart and on either side of WW2, they had a few things in common – predomi-nantly the most beautiful exterior profiles ever seen at sea. Per-fectly balanced and uncluttered, their designs were the zeniths of grace. With their twin slanted funnels, raked masts, rounded fronts and uncluttered decks, they were an express-liner dream come true. Forsaking boundary layer effects in favour of appear-ance, the Bremen’s funnels were designed so squat they later had to be heightened due to complaining passengers covered in soot. She was the first commercial ship to be designed with a Taylor bulbous bow. Bremen also had a small seaplane, enabling mail to arrive several hours before the ship. Both ships boasted interiors founded on art deco, however receiving bland reviews from contemporary critics. Although many found the steel-and-chrome décor of the Bremen clinical and tawdry, she did intro-duce the novelty of synthetic materials. The “Lizzie’s” designers were accused of continuing to indulge in chocolate brown, straight lines and acres of walnut panel-ling. From a 2014 perspective the criticism seems unjust; today one can safely say they were “cool”. With 135,000 BHP enabling 28 knots the Bremen broke the Atlantic record for the first time since 1907. Designed to carry 3600 souls in peace time, during the war the Queen Elizabeth sailed with over ten thousand troops on board. The final thing the Bremen and Queen Elizabeth had in common was fate. In Bremerhaven 1941 the Bremen was totally burned out after a punished cabin boy started a revenge fire in a stateroom. Her double bottom is still visible in the Weser. In January 1972 the long discarded Queen Elizabeth caught fire in Hong Kong just days before her completion as a floating univer-sity. Burning from stem to stern she crumbled and heeled over halfway sunk on her side. Two years later the wreck featured as MI6’s covert headquarters in the Bond-movie “The Man with the Golden Gun” – ending her life as a movie star as well. Having all the drama of an Armageddon, the Queen Elizabeth’s funeral pyre symbolised more than anything else the passing of the superliner.

epilogueReturning to where we started, the United States. Taken out of service in 1969 thanks to the Boeing 707, the United States is the most forgotten liner of all because she is overtly moored in Phila-delphia and you cannot miss her. The most powerful and evoca-tive liner of all times, the pride of American maritime engineering is as we speak an empty, flaking shell sitting through the night as a shadow in silent darkness.

The romance of the Atlantic liner may be gone but who knows, maybe it will return? Perhaps in fifty years jet fuel will be so expensive that flying will be reserved for the rich and privileged. The ocean greyhounds will return – I certainly hope so! ❚

Hapag-Lloyd chose to have the Europa 2 assessed in line with the IMO’s EEDI, which will only become compulsory for new cruise ships commissioned after 1 January 2013.

“The Europa 2’s independent certification shows that the CO2 emissions produced by Hapag-Lloyd Cruises’ new ship are substantially lower than the average for the industry’s global fleet currently in service. In fact, it emits 31% less CO2 than other cruise ships of a similar size,” said Dr Jörg Lampe from systems engineering and risk management, DNV GL.

“It does not only set the highest, 5-star-plus standards in terms of its design, accommodation and dining facilities, its technical features are also first rate, ensuring that resources are con-served as much as possible,” added Karl Pojer, chief executive, Hapag-Lloyd Cruises.

Europa 2 also became part of a world’s first when it was fitted with an SCR catalytic converter, which reduced nitrogen oxide emissions by almost 95%. An optimised hull and water treat-ment technology, which fulfils the highest industry standards, also ensure that resources are used sparingly. ❚

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Hapag-Lloyd Cruises’ new cruise ship, Europa 2, has become the first in the world to be awarded Energy Efficiency Design Index (EEDI) certification by DNV GL.

Europa 2 is the world’s first cruise ship to be awarded eeDi certification

Article first published in The Motorship ©The Motorship

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Mein Schiff 3 tui Cruises is launching a new ship, the Mein Schiff 3, this spring. this is a top-of-the-line cruise vessel built at stX Finland’s yard in turku. With its 99,000 Gt and 1,253 staterooms, it will be a new marvel, offering unique cruises to tui’s guests. Mein Schiff 3 has an environmentally friendly power plant and energy efficient solutions that represent significant improvements compared to other cruise ships of a similar size. the environmental enhancements come from exhaust treatment systems, waste water treatment systems and the materials selected for the cabins.

DNV GL welcomes the arrival into service of the Mein Schiff 3 later this year.

Quantum of the SeasLater this year, rCi will launch a new ship, the Quantum of the Seas. this is the first of three new vessels to be built by Meyer Werft in papenburg, Germany. With its 167,800 Gt, it can carry approximately 4,900 passengers and will be the third-largest cruise vessel on the seven seas. rCi has put a lot of innovation into its new vessel – with respect to both the technical features and guest experience. the two70 lounge will offer a 270-degree panoramic view of the ocean. in addition, the ship will offer the “North star”, a glass-walled capsule at the end of a 135ft crane arm that can take passengers 300ft above sea level, giving them views never experienced before on a cruise vessel.

DNV GL welcomes the arrival into service of the Quantum of the Seas in November this year.

AIDAprimathe AIDAprima is currently under construction at Mitsubishi Heavy industries in Japan. this is the first of the new generation of aiDa ships, setting fresh standards in terms of environmental protection. it is the first cruise vessel outfitted with dual fuel engines and can be powered by LNG in ports. it will also be the first cruise vessel to use the Mitsubishi air Lubrication system (MaLs). in addition, the ship will be outfitted with comprehensive filter systems to reduce 90-99% of all the three significant emissions – soot particles, nitrogen oxide and sulphur oxide. With her 124,500 Grt, 300m length and 37.60m breadth, the ship will offer 3,300 passengers spectacular year-round service based out of Hamburg.

DNV GL is honoured to class this vessel and looks forward to supporting her in the future.

Norwegian Getawaythe Norwegian Getaway was built at Meyer Werft and delivered to her owner on 10 January 2014. she is a sister vessel of the Norwegian Breakaway and entered into service, based out of Miami, in February 2014. With her 145,655 Gt, she offers 2,014 cabins, 27 different dinner options and stunning entertainment. On the technical side, she is outfitted with the latest engine technologies, a pod drive system and improved hydrodynamics that ensure the best energy efficiency. in addition, she is outfitted with ballast water treatment systems.

DNV GL is honoured to class this vessel and looks forward to following her in her successful operations.

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