Ship Repairs Focused on Drydock Postponements and Remote Attendances
It is very challenging to try to evaluate market trends by isolating the colossal impact of COVID-19. What would the ship repair market be like in 2020 if there was not the COVID-19 epidemic? According to Intermodal’s ship-repair broker, Mr. Vassilis Vassiliou, “we would expect to see more scrubber retrofits, which of course would be affected by the oil prices and price spread between high and low sulfur content on HFO. Maybe more conversion projects, since there were a lot of positive aspects speculating that the offshore business will be revived. Maybe more intensive repairs for the elder fleet. This high demand for ship-repairs should be followed by a serious relaxation, similar to the one we witnessed in 2016 – since the five years cycle determines vessel docking schedule. This depressing market would not be as steep as it was in 2016, considering all the above would be supported by the ongoing trend of BWMS installation, by which we come across in most of the ship-repairs nowadays”.
According to Mr. Vassiliou, COVID-19 shouldn’t change what we should expect from the market. “Such events will occur sooner or later with COVID-19 spread only affecting the time these developments will occur. But eventually changes will take place. Therefore, we expect that the next year will be a busy year for all the repair yards and by the end of 2021 to notice a significant slowdown in demand”.
Vassiliou added that “back to the hot topic, how does COVID-19 affect the current ship repair market? The main concerns now are over the travel restrictions which still have not been stabilized. For Asia, where most of the repairs take place, governments are issuing an LOI to which Superintendents or specialists can travel under special permission. The time and requirements for getting the LOI vary from country to country and from city to city. If more cases observed in one area, the LOIs are immediately withdrawn and had to be reissued. This creates a lot of confusion during the planning phase. At the same time, Europe is currently facing the second wave of COVID-19 spread and this has created uncertainty whether travelers from Europe will be accepted by Asian countries in the near future, since Asia is handling the virus in a much more efficient way”.
Intermodal’s analyst added that “as a result, Owners which cannot ensure that their personnel will be able to attend the repairs have three options. Either to requests from class a postponement or to try to change the vessel’s itinerary to bring her close to places free to attend or to use locals to attend the repairs. Of course, the first option is the most preferable and has resulted in massive postponements and, consequently, a lot of drydocks to be pilling all together with those planned for the near future. And the third option is the least desirable and in such cases Owners try to minimize the scope and to firm the vessel to shipyards they are familiar with, in order to control the collateral damage in case the attending superintendents fail to perform”, Vassiliou concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide