He told them that the trend towards ever more elaborate – and lengthy - ship refurbishments had narrowed down the options for cruise lines when it came to choosing shipyards for the work. He said: ‘It doesn’t really matter what price the shipyard tenders for the job as, if it involves one extra day’s steaming for the ship, we are not going to be interested.
‘The amount of time the ship has to be withdrawn from service – including the journey to and from the yard - has to be as short as possible. The per-day cost for any ship deviation is $250,000-$300,000 and judged as part of the refit/conversion cost so, if the ship is away a day longer or a week longer in refit, it really adds up.
‘This is the reason why we use certain shipyards like Grand Bahama which is only hours away from our main cruise ports in the region.’
Even regular refits have become mini-revitalisations commanding a $20m price while there are been a well-reported rise in complete ship revitalisations driven by the surge in newbuild deliveries, noted moderator Tony Peisley, author of the recently published Seatrade White Paper on Cruise Ship Refurbishments, downloadable here.
Addressing delegates Fetten said: ‘The volume of this [refurb] work has changed the nature of this business for shipyards. It is no longer a question of just having the skills to do the job, they must now have the infrastructure to handle it. How many cranes, how many containers that can load and discharge – those are key elements in the logistics which we are more interested in today.
‘The ships are also getting pretty close to the maximum in terms of length, width and even airdraft at current drydocks. There is not a single US mainland yard where I can send a ship with 320mtr length so we have to go to Hawaii – a five-day deviation.
‘15 years ago, Carnival and Royal Caribbean went into partnership with Grand Bahama shipyard but today the drydock is too short for 10% of our ships. We are doing something to correct that but the only way other shipyards will do that for us is if we pay.
Fincantieri vp ship repair and conversion Lawrence Zammit agreed that yard location and infrastructure ‘are important but have to be considered alongside the complexity of the project. The owner should also give weight to a yard’s reputation, overall quality and important factors including its access to specialist contractors, the quality of its engineering and design and its experience in environmental issues, safety and security.
‘But sometimes lines do organise their itineraries so that the final port of their ship’s final cruise is close to one of our yards. Not only does this reduce the deviation but it also allows the possibility of us starting the job on board at the end of the cruise and finishing it off at the beginning of the cruise after the drydock.’
Navantia commercial manager Ramon de Lara acknowledged that one of the reasons the Spanish ship repair specialist decided to focus on the cruise sector was its own location in the Western Mediterranean.
He said: ‘We saw the potential in the increased cruise traffic in the region but we had to change our mindset from working on commercial vessels to that needed to work on passenger ones.
‘Crucially, we also quickly recognised the seasonal nature of the business and the difference between standard refits and revitalisations and we are now seeing more demand for 3-5 week conversions rather than one week refits.’
On the newbuild front, Fincantieri senior chief designer for marketing and new concept development Maurizio Cergol said: ‘Slots are pretty much filled out for years to come and, even where there might be spaces from 2023, we have long-term relationships with three major clients and we would want to give them first refusal.’
Cergol added that: ‘The emergence of Chinese shipbuilders is not a threat to us. They will learn very quickly how to build cruise ships but there is such a huge emerging domestic market that they will have enough to do just building ships to feed that.’
For refit yards, the sudden popularity of LNG-powered cruise ships may offer a bonus in terms of retrofitting LNG or dual-fuel engines but it remains a longshot.
Fetten said: ‘The conversion of a cruise ship to LNG or dual fuel costs between $750,000 to $2m. It is technically doable and might make financial sense given future regulatory requirements.
But lines remain unsure and Hapag-Lloyd Cruises ceo Karl Pojer explained one reason why: ‘If we had decided to have LNG engines on our two luxury expedition cruise newbuilds, we would have needed an additional deck (for nine instead of eight) because of the greater storage space required for the fuel.’
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