Shiprepair & Maintenance: 2nd Quarter 2020
SRS, one of the UK’s oldest shiprepair agents, has UK agency rights with 15 shipyards across the Mediterranean, West and Southern Africa, the Middle East, China, Singapore, North America, Panama and South America. As such the company is well-placed to assess the impact of Covid-19 across the industry.
Shiprepair & Maintenance caught up with managing director Roderick Wordie at the end of April to get his take on what has happened so far and what the future might hold in a post-pandemic world.
At the beginning of the year, Wordie reflects, shiprepair yards were entering one of their busiest periods. A significant percentage of these repairs were destined for Chinese yards due to their capacity, costs and vessel chartering operations.
However, with the onset of Covid-19, the Chinese yards effectively closed their doors and owners were forced to review their docking schedules and seek alternative locations to refit their vessels.
“This put considerable pressure on yards in Singapore and the Middle East as dock capacity was swallowed up due to the surge in demand,” he says. “The situation has since become more problematic due to restricted movement of workers into yards across borders. This has been impacting labour supply which in turn has placed limits on the yards’ ability to operate at capacity.”
Certain territories have been hit harder than others, he notes: “Governments have issued legislation to restrict the movement of workers and several shiprepair yards have had to close temporarily. For those yards that are still operational, the 14-day quarantine rule is blocking the ability of superintendents and service technicians to attend scheduled dockings. As a direct consequence of this lack of dock capacity, many shipowners and managers are now applying to Class and Flag States for a three to six month extension of their class docking date.”
Many owners and operators that are still undertaking dockings, despite the quarantine rules that prevail worldwide, have asked their superintendents to work remotely from home.
“In conjunction with co-opting the services of a local superintendent in that territory, they are able to project manage the repair of the vessel from their home base. This is not ideal but is proving effective and gives a clear demonstration as to how the maritime industry is able adapt,” says Wordie.
The question that everyone is asking is, when will shiprepair markets return to normal and even then, what will ‘normal’ look like?
Wordie comments: “As of early April we were seeing regions returning to some form of normality with shipyard facilities in China back at capacity. But since mid-April we have witnessed a resurgence of Covid-19 in parts of China and in particular Singapore. A resurgence of Covid-19 would undoubtedly have significant implications for shiprepair and trade in the Far East and so to give a timeline as to when its shiprepair industry will return to ‘normal’ is now extremely difficult to predict.”
With regards to the shiprepair business in Europe, a number of countries were, at the time of writing, still in lockdown. However, there have been some positive developments. Wordie says: “We have seen shipyards in Denmark reopen for business and we welcome this development.”
Despite the short-term disruption, Wordie believes that the downturn will be followed by a sharp upturn in demand for shiprepair and docking services.
He points out: “Owners and operators that have been granted Class extensions are aware that their extension will coincide with regular class dockings in the fourth quarter of 2020 and the first quarter of 2021. We anticipate a surge in demand for shiprepair facilities, and we are in regular contact with a number of owners and operators to help them plan for this eventuality.”