Data source: LRFairplay Ship repair yards Data source: LRFairplay Jakub Walenkiewicz 29.04.2008

Content The world fleet – recent changes Ships in operation – what does it take to keep them running Ship repair yards – estimated workload Main challenges ahead © Det Norske Veritas AS. All rights reserved 28 February 2019

The World Fleet © Det Norske Veritas AS. All rights reserved 28 February 2019

Contracting © Det Norske Veritas AS. All rights reserved 28 February 2019

Orderbook accumulated 370% of growth ! © Det Norske Veritas AS. All rights reserved 28 February 2019

Orderbook accumulated 500% of growth! © Det Norske Veritas AS. All rights reserved 28 February 2019

Annual deliveries © Det Norske Veritas AS. All rights reserved 28 February 2019

Vessels sold for scrapping Source: Fearnleys © Det Norske Veritas AS. All rights reserved 28 February 2019

The World Fleet 0 % 3 % 8 % © Det Norske Veritas AS. All rights reserved 28 February 2019

Ships in operation © Det Norske Veritas AS. All rights reserved 28 February 2019

Maintenance Special surveys Intermediate surveys Conversions known as class renewals every fifth year of a vessel’s operation as a vessel gets older, surveys gradually take more time cover hull, propulsion, machinery, equipment and installation inspections and repairs always require dry docking Intermediate surveys ships have to by docked every 2 – 2.5 years predominantly hull and propulsion inspections and repairs machinery, equipment and installation inspections, usually based upon manufacturer instructions Conversions Casualties © Det Norske Veritas AS. All rights reserved 28 February 2019

Ship repair yards - facts It is estimated, that around 30% of the repair capacity has been converted to newbuilding Fleet is growing by at least 8% per annum and may easily hit double digit growth Ships get substantially bigger and naturally require bigger facilities (esp. super post panamaxes) It is already nowadays difficult to get a slot in repair yards. Often ships are blocked for many days before they can be serviced What can we expect in such circumstances? © Det Norske Veritas AS. All rights reserved 28 February 2019

DELIVERY DATE!!! Methodology… © Det Norske Veritas AS. All rights reserved 28 February 2019

Estimated workload for Ship repair yards Data: LRFairplay Scope: All vessels in operation above 1000 DWT built after 1980/01/01 plus all vessels currently under construction (total orderbook) – roughly 43000 vessels; 1.02 million GT No scrapping included, although it wouldn’t substantially change the picture No forecast included. Data presented in the time span 2000 – 2020 Estimated casualties added. Average 1200 vessels per year, corresponding to 20 mill. GT (based upon average from the past 5 years) © Det Norske Veritas AS. All rights reserved 28 February 2019

Estimated workload for Ship repair yards Estimated time for each survey © Det Norske Veritas AS. All rights reserved 28 February 2019

Workload – Index (number) 34% growth © Det Norske Veritas AS. All rights reserved 28 February 2019

Workload – number of vessels © Det Norske Veritas AS. All rights reserved 28 February 2019

Workload – number of vessels per day 490 ships/day 360 ships/day © Det Norske Veritas AS. All rights reserved 28 February 2019

Workload – Index GT 87% growth © Det Norske Veritas AS. All rights reserved 28 February 2019

Workload - GT 390 million GT 210 million GT © Det Norske Veritas AS. All rights reserved 28 February 2019

Workload - GT per day older ships 11.4 million GT 6.8 million GT © Det Norske Veritas AS. All rights reserved 28 February 2019

What can be done? © Det Norske Veritas AS. All rights reserved 28 February 2019

What can be done? Two simple solutions Improve existing facilities – reduce time for dry docking Build more ship-repair yards © Det Norske Veritas AS. All rights reserved 28 February 2019

Increased productivity? Increased number of surveys and repairs during operation of a vessel performed outside repair yards reduces total time spent in a repair yard, but not the time in a dry dock Increased prefabrication of steel in repair yards allowing quicker steel replacement requires investment in yards’ steel workshops but… New IMO/Class etc. requirements in most cases increase a scope of work that needs to be done Shipyards already struggle to cope with the current workload. Loads of improvements have been already implemented, including limiting time in dry docks © Det Norske Veritas AS. All rights reserved 28 February 2019

Estimated workload – 10% productivity increase 9.8 million GT 6.8 million GT © Det Norske Veritas AS. All rights reserved 28 February 2019

New repair yards? The world fleet is growing much faster than it used to, hence more facilities will be necessary anyway Even if all possible improvements in the existing facilities have been implemented, repair yards most likely will not be able to cope with the workload after 2011 Large VLCC dock are not capable to accept super post panamaxes as well as cruise vessels due to the draft limitation © Det Norske Veritas AS. All rights reserved 28 February 2019

Ship-repair yards - Tankers 114% growth © Det Norske Veritas AS. All rights reserved 28 February 2019

Ship-repair yards - Bulkers 63% growth © Det Norske Veritas AS. All rights reserved 28 February 2019

Ship-repair yards - Containers 161% growth © Det Norske Veritas AS. All rights reserved 28 February 2019

Final remarks TIME TO BUILD MORE SHIP REPAIR YARDS! do it quickly… Repair yards are already running over their normal capacity Ships often do not get a full scope of necessary repairs Average waiting time in ship repair yards is around 4 months Super post panamax container vessels as well as big cruise ships can not enter most of the VLCC docks due to the draft limitation New requirements put even a bigger pressure on repair yards due to extended scope of inspections and repairs Lack of skilled seafarers often leads into a measurable condition of a vessel, which naturally increases workload for repair yards. TIME TO BUILD MORE SHIP REPAIR YARDS! do it quickly… © Det Norske Veritas AS. All rights reserved 28 February 2019

THANK YOU © Det Norske Veritas AS. All rights reserved 28 February 2019