SIW1099It’s amazing what people throw away. London skips are full of stuff which, presumably, didn’t fit in with the latest loft style decor. Who’s got time to put it on eBay? So it just gets chucked out. Chucking away household oddments is fair enough, but chucking out ships that don’t fit the decor is a very different story.

Demolition Demographics

The idea that “obsolete” ships should be scrapped to make way for a new generation of “eco-ships” raises the key question of whether ships built in the cheap oil era really are obsolete. 20 years is the normal “sell by” date, but there are only 111m dwt of ships over 25 years old and another 69m dwt aged 21-25. With demolition of 58m dwt in 2012, that is not much. So serious scrapping would need to dip into the fleet under 20 years.

Pick Low Hanging Fruit

The positive message is that many of today’s older ships can be retrofitted to improve performance, often at a manageable cost. This argument was made eloquently by Maersk at the prestigious IMAREST NK Founders Lecture in London this week. Maersk have a unique platform to test the proposition. Their 1000+ ship fleet burns 10m tonnes of bunkers a year costing over $6 billion and their retrofitting programme covers 300+ ships.

Retrofitting can be productive because most ships in the world fleet were built to “maximum speed at minimum cost” and contract spec is a poor guide to actual performance. When Maersk analysed the in service operations of 21 designs they found some performed 15% better than contract, but others 15% worse. So sea trials don’t reproduce real world conditions. There has been no major technical change for new ships to exploit and the recent Royal Academy of Engineering report on “Future Ship Powering Operations” does not see any in the short term. But many fuel-efficient add-ons can be retrofitted to boost older tonnage. Better injectors, Mewis ducts, or raising a containership’s bridge to accommodate an extra tier of boxes are a few examples.

Benchmarking Bonanza

Information is the core of the Maersk philosophy. Improvements are meticulously planned and benchmarked. Then the operation of the ships is monitored day by day for benchmark deviations. For example, there is no point in fitting a waste heat recovery unit unless it actually produces the predicted savings. Of course, assessing the value is tricky, but small improvements accumulate and their tanker fleet upgrading yielded an 8% fuel cost saving – crucial cash in a weak market.

If It Ain’t Broke, Fix It

So there you have it. The era of anonymous floating steel boxes is over. At $600/tonne (or $1,000 for distillate) Maersk’s message is that eco-management is a game changer. And many owners will enjoy the “back to basics” challenge of running a tightly monitored eco-fleet which delivers cargo like clockwork and is green too. Have a nice day.