Rising fuel prices, low freight rates and overcapacity point to a challenging year ahead in the marine sector, says Dorit Timmann, head of ABB Turbocharging’s business in Germany, who fleshes out his opinion in the following Q&A:
How would you characterize the current climate in the turbocharger business?
Huge storms in the marine sector – shipping and shipbuilding – but friendly sunshine in the stationary plant sector, which covers anything to do with onshore power plants.
What can you tell us about the “storms”?
High fuel prices, overcapacity, ongoing new vessel deliveries and very low freight- and charter rates are putting the marine industry in Germany under tremendous pressure. A result of this unfortunate trend is that we are seeing a very large number of vessels being laid up, sold or scrapped as well as extra slow steaming and turbocharger cut-outs.
We have to do our utmost to assist our clients in keeping their maintenance budgets under control. Insolvencies in the sector of vessels under limited partnership are common and we are already seeing the start of a concentration process, in other words mergers and acquisitions.
The International Maritime Organization (IMO) is seeking to limit emissions from the shipping industry, given that it is responsible for about 10 percent of Nitrogen Oxide (NOx) emissions globally. How do you rate the importance of these regulations for your business?
These regulations are very important, for us as well as for our clients. ABB turbochargers are designed to enable ship owners to fulfill them. Our valve train system, VCM®, reduces NOx emissions and helps customers to meet IMO Tier II and especially Tier III regulations, whose aim is to reduce NOx emissions by 80 percent. It goes without saying that by offering new products and technologies like this we also have to intensify the training of our employees.
Have the IMO and other emissions regulations been a technology driver?
The IMO regulations have triggered new engineering efforts, but also new business opportunities as well. We have developed new, more efficient and effective hardware to enable customers to meet IMO Tier II and Tier III regulations.
What can you offer customers in the way of immediate support? Which ABB products or services are especially well suited in today’s business climate?
We have several, for example our maintenance agreements (MMAs), where we actively assist our clients in planning their turbocharger maintenance at the best price level, our “pay by the running hour” maintenance contracts (OPAC), and turbocharger cut-outs.
(ABB is a world leader in the manufacture and maintenance of turbochargers for 500 kW to 80+ MW diesel and gas engines, with over 100 Service Stations in more than 50 countries worldwide. Approximately 200,000 ABB turbochargers are in operation across the globe on ships, power stations, gen-sets, diesel locomotives and large, off-highway vehicles.)