The chief executives of some of the world’s biggest cruise lines will participate in the first virtual panel discussion that will kick off the 6th Posidonia Sea Tourism Forum 2021 on May 25th.
Gianni Onorato, CEO of MSC Cruises, Michael Thamm, Group CEO Costa Group and Carnival Asia, Wybcke Meier, CEO of TUI Cruises and Chris Theophilides, CEO of Celestyal Cruises will share the screen for the day’s first session titled ‘The Restart of Cruising in Europe and the Mediterranean’.

Each will share their company’s initiatives for post-pandemic cruising, their own vision for the restart and the measures and protocols each cruise line is implementing for the interim period. They will also discuss the reasons for the industry’s strong backing of the East Med as this year’s cruise hotspot, the region that in 2021 will host the highest number of cruise deployments in Europe.

Aida, Celebrity, Costa, Hapag Lloyd, MSC, Norwegian, Royal Caribbean, Seabourn, Silversea and TUI along with Celestyal Cruises will run considerable East Mediterranean summer programmes this season. The port of Piraeus will be the homeport for vessels from Azamara Cruises, Celebrity Cruises, Celestyal Cruises, Holland America Cruise Line, Norwegian Cruise Line, Seabourn Cruises and Silversea Cruises. Celebrity have chosen Greece’s biggest port for the commercial global debut of its newest vessel the Celebrity Apex. Greece’s Corfu and Heraklion, Limassol in Cyprus and Israel’s Haifa are ports that also feature strongly in the lines’ homeporting schedules.

“After all the geopolitical problems that hampered the East Mediterranean’s cruise development in recent years, the industry is now choosing the region as a main theatre for its successful restart in Europe,” said Pierfrancesco Vago, Global Chairman of CLIA and Executive Chairman MSC Cruises, who will keynote the event with his opening remarks about the State of the Industry.

Other sessions during the one-day event will discuss the impact on shore excursions, destination management and delivery under the new health protocols, the environmental challenges ahead and the impact of COVID-19 on port operation and development.

The outlook for the 2021 season for cruising in Greece will be exclusively discussed in a dedicated session as the country banks on international visitor arrivals to revive an economy heavily dependent on tourism revenue. Greece, as well as all cruise destinations, lost much-needed income last year due to the suspension of the bulk of cruise operations world-wide. CLIA estimates the disruption to have caused the world economy US$77 billion in global economic activity and 518,000 jobs.

“Cruise recovery won’t be plain sailing. The waves are high, seas are rough, however the collective minds and will of the industry and its stakeholders are strong enough to weather the storm caused by the pandemic and guide us to calmer waters and safer harbours,” said Theodore Vokos, Managing Director, Posidonia Exhibitions S.A, the event’s organiser.

“The timing of this year’s PSTF is impeccable as we will be able to take the pulse and capture the mood of the global cruise industry almost in real time, within two weeks of the official resumption of commercial operations,” he added.

Registration is free of charge for members of the sea tourism and maritime community. Online functionality will enable delegates to ask questions. Recordings of the sessions will be available on demand for all registered users until 10 June, 2021.

Sponsors and exhibitors will showcase their products and services in the virtual ‘Exhibition Hall’ consisting of digital branded stands and featuring promotional material and video. The PSTF exhibition will be accessible through the platform https://posidoniaforum2021.com from 24 May until 10 June, 2021.

The 2021 Posidonia Sea Tourism Forum is sponsored by Gold sponsor Greek National Tourism Organisation, Silver Sponsors Heraklion Port Authority, Indev Software, MedCruise and Piraeus Port Authority and Bronze sponsors Alba Graduate Business School, Celestyal Cruises and Thessaloniki Port Authority. The Posidonia Forum is organised under the auspices of the Ministry of Maritime Affairs & Insular Policy and the Ministry of Tourism and is supported by the Hellenic Chamber of Shipping, Cruise Lines International Association (CLIA), the Association of Mediterranean Cruise Ports and the Union of Cruise Ship Owners & Associated Members.

　　Bureau Veritas has awarded approval to the GILLS system, designed to support improved efficiency for both existing and new ships

Paris La Défense, 10 May 2021 – Bureau Veritas (BV), a world leader in testing, inspection, and certification (TIC), has been working with GILLS PTE LTD in Singapore to assess the performance of its innovative air lubrication system to improve ship efficiency and decrease fuel burn by reducing the drag of an underwater hull.

GILLS, which stands for gas injected liquid lubrication systems, deploys NACA profiles* to create self-generating micro-bubbles for ‘turbulent modulation’ which has a ‘hull-tightening’ effect (see below), reducing drag and energy requirements. The self-generating nature of micro-bubble clouds with no requirement for air-compression and additional energy requirements is one of the features of the GILLS system.

Following an in-depth assessment by Bureau Veritas in Singapore, covering safety of installation and updated Class compliance, GILLS has now been awarded approval in principle (AiP) for the system to be installed onboard vessels in general. The AiP covers the design of the system and installation onboard vessels as reviewed against the Bureau Veritas Rules for Steel Ships NR 467 (as updated in January 2021).

Commenting, David Barrow, SE Asia Zone Vice-President for Bureau Veritas, said: “The collaboration with GILLS is timely as the industry seeks performance improvements in line with the EEXI energy efficiency targets. Pressure is building to find cost-effective solutions that work and can be financed.

“The GILLS systems has been installed on an existing vessel for a number of years now and the vessel owners are confident of the fuel savings are approximately 10%. The next step is a full-scale measurement and a validation exercise led by Bureau Veritas Solutions (BVS) to identify confirmed performance. BVS, our consultancy arm, is also working with GILLS to assess the potential of access to Singapore ‘Green Funds’ to provide financial support to owners considering using such energy-saving systems.”

The hull tightening effect of the GILLS technology is a phenomenon of the various factors and forces acting on the microbubbles generated by a GILLS vortex generator installed at the bow of the ship. These factors and forces can be identified as the following:

1. A ship’s forward movement
2. Creation of microbubbles by negative pressure and Kelvin Helmholtz Instability (KHI) exiting the vortex generator
3. The random shape of microbubbles with turbulence, eddies and vortices, from KHI
4. Buoyancy acting on the micro bubbles inducing an upward force
5. Shape of the hull.

Peter Kneipp, Managing Director of GILLS PTE LTD said: “The GILLS Air Lubrication System is a nature based innovative technology that not only uses the micro bubbles to reduce the drag, emissions, fuel and biofouling, but it also utilizes the ship speed to generate a negative pressure and minimizes the required external compressor power.

“We are greatly confident that GILLS will be a valuable contributor for practically every ship type to improve the EEDI /EEXI IMO Index. GILLS can also be retrofitted to existing ships as well as new vessels.

*NACA airfoils are developed by the National Advisory Committee for Aeronautics (NACA - USA).

About GILLS
GILLS PTE LTD is a company established in Singapore in September 2019 to provide engineering, service support and marketing for the GILLS Air Lubrication System. From Singapore GILLS PTE LTD supports the customers world-wide, assisted by a network of dedicated specialist in the main Maritime Centers globally

About Bureau Veritas
Bureau Veritas is a world leader in laboratory testing, inspection and certification services. Created in 1828, the Group has 75,000 employees located in more than 1,600 offices and laboratories around the globe. Bureau Veritas helps its clients improve their performance by offering services and innovative solutions in order to ensure that their assets, products, infrastructure and processes meet standards and regulations in terms of quality, health and safety, environmental protection and social responsibility.
Bureau Veritas is listed on Euronext Paris and belongs to the Next 20 index.

Time charter rates
The Container market has seen an unprecedented increase in rates since the end of 2020. Container 1 year TC rates have surged to extraordinarily new highs with 8,500 TEU values rising to a record 54,000 USD/day for April. This is an increase of 350% since June 2020.

Throughout 2020 the market fell significantly from impacts due to the Covid-19 pandemic. There was a significant decrease in demand as the uncertain circumstances surrounding the beginning of a global pandemic hit the consumer market hard.

Towards the end of 2020 trade started to rebound and since the beginning of 2021 a firm recovery has taken place. A combination of widespread logistical disruption amplified the positive impacts on the markets. A shortage of box availability in Asia had a particularly strong effect and an increase in port congestion has all led to a significant firming in rates.

Speeds
Alongside the increasing rates in the Container sector, we have seen a significant increase in average laden speeds travelled. In this current situation with rapidly increasing rates, vessels are moving faster.

Container speeds hit a five-year low in May 2020 as a result of reduced demand due to Covid, blank sailings and port delays.

Figure 1 shows monthly average speeds since the start of 2019 for all Container vessels. Container speeds and container rates have both been following the same upward trajectory since mid-2020. Container speeds across all types have jumped 5.5% since June 2020, from 13.99 knots to 14.76 knots, with some of the larger types increasing by more.

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Speeds travelled by Containerships are directly correlated to charter rates as seen in figure 2.

Post Panamax average speeds between June 2020 and April 2021 have increased significantly by 8.5%. Across the same time period, Post Panamax rates have risen by 350%, from $12,000 per day in June 2020, to now currently reaching $54,000 per day in April 2021.

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Container Cargo Miles
VesselsValue Trade data allows us to track cargo miles over time for any sector. Cargo miles combine actual distances sailed by each vessel and estimates of cargo volumes to indicate the true demand for vessels. Figure 3 shows global Container monthly estimated cargo miles back to January 2020.

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Cargo miles in 2020 declined overall between February and June. A drop at the start of the year is normal due to the Chinese New Year period, however, the decline was prolonged in 2020 due to the onset of Covid-19, disrupting exports from Asia into June. Between June and July 2020, monthly cargo miles increased by 8% from 150 bn TEU-NM to just over 160 bn TEU-NM, suggesting a rapid recovery in demand. This was helped by Western countries also easing lockdowns.

Since then, cargo miles in the last few months of 2020 stayed consistently high, with October 2020 cargo miles exceeding October 2019 cargo miles by 3%. This February’s cargo miles were also 6% up on last February and 4% up on February 2019 (pre-Covid), suggesting continued strong demand in the Container market. More recently, in March 2021, cargo miles continued to grow with rates, surpassing peak levels seen in 2019.

This growth is primarily driven by exports from China. Figure 4 shows some of the top routes for Post Panamax containers so far this year. China ranks highest, with almost three times the number of journeys leaving the country compared to the USA. The success of vaccine programmes is another good sign for the Container market, as we expect the demand for goods and cargo miles to continue rising, along with rates.

Figure 4 – Post Panamax Top Routes 2021. Vessels leaving countries sorted by highest Journey count.

Forecasting

Demand growth in 2021 is expected to improve 5.3% from 2019 pre-Covid levels, with 2020 having declined 0.7%. The demand increase is supported by continued online purchasing but is expected to ease up as the vaccination programmes take hold and mobility starts to normalise. Rebounding manufacturing levels in the Western economies could support demand levels throughout the second half of the year and into 2022.

The large relief packages in the US are also likely to support Eastbound Transatlantic shipments and paired with a likely weakening and more competitive US dollar, the export market could strengthen overall backhauls for the main lanes. As we argue that both consumer and business confidence are likely to strengthen throughout the year, 2022 is estimated to maintain a healthy demand growth of around 4%.

Scrapping has naturally slowed down significantly from Q3 2020 with rising earnings, and we expect continued muted levels through 2021. New orders have picked up to 1.1 mil TEU since Q3 2020 or 4.6% of the fleet, and this month alone there have been 50 new orders for Containerships, however all for sizes >10,000 TEU. Containerships supply is set to increase over the next two years, but with lower fleet growth than in 2020. After a significant increase in freight rates during this prolonged peak period, earnings are expected to soften slightly from current levels during 2022, but remain steady into 2023-24, setting the stage for a multi-year peak market.

Container Trade Data from VesselsValue as at April 2021

Disclaimer: The purpose of this blog is to provide general information and not to provide advice or guidance in relation to particular circumstances. Readers should not make decisions in reliance on any statement or opinion contained in this blog.

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