A Retrofit Bottleneck.
The perfect storm of regulations and retrofits is making
life difficult for industry stakeholders.
The shipping industry is fluid, dynamic, rife with decisions and influenced by a myriad of uncertainties. Yet for all the ingenuity and forward planning required to be at the forefront of this industry, stakeholders didn’t prepare for Ballast Water Treatment System (BWTS) compliance in time.
With deadlines approaching fast, a retrofit bottleneck is now affecting the whole industry.
Until 2017 there wasn’t much impetus from owners to move forward with BWTS compliance, so retrofitting operations were put on the back burner.
Even after ratification of the IMO BWM Convention, most stakeholders believed that USCG retrofit extensions would delay its worldwide enforcement ad infinitum. Years of USCG and IMO convention postponements fed into those expectations. Second hand acquisitions by Owners were carried out with this mindset, and so the retrofitting needs of their newly acquired vessels were not evaluated at the time.
But as 2018 drew to a close, a plethora of new USCG BWTS type approval certificates were issued and extensions became hard to acquire. The stark reality then set in – retrofitting and compliance deadlines were inevitable.
Owners now find themselves with vessels that can’t receive USCG extensions and don’t have a BWTS installed. The scarcity of shipyard slots has made retrofitting difficult to negotiate. Scrubbers, the latest market trend, have also multiplied the difficulties faced by owners.
The Year of the Bottleneck
The market rapidly transitioned from servicing small numbers of Surveys, Feasibility and Engineering studies, to dealing with vessels flocking to shipyards without finished Engineering Studies, approved Class drawings or even equipment and materials.
Now, longer installation lead times will add further grief to an already tense industry. Based on the dodgy reputation of (poorly supervised or non-commisioned etc.) newbuilding installations, we wouldn’t be surprised if hastily retrofitted systems suffered the same fate too.
This shouldn’t be happening.
Retrofits, i.e. whole ship repair periods, should be postponed until properly prepared engineering and fully planned retrofit projects are assigned to shipyards. The afloat retrofits, outside of ship repair facilities and not during normal DD periods are not an ideal antidote for postponement.
The inevitability of retrofits may be causing headaches for Owners, but Engineering Consultancies like ours are reaching for some aspirin as well.
We must never forget that Engineering is a spiral process. It starts with the development of a basic design, and progresses in cooperation with (and with valuable input from) Owners. Finally, principal and detailed drawings and technical specifications must be approved by Classification Societies. There’s no way to cut corners during this process without risking major errors and retrofit delays.
The Planning Pain Points
It’s not just the proper development time for Feasibility and Engineering studies which must be taken into consideration. A number of other factors can cause major delays during a retrofit installation – we’ll call these the Planning Pain Points:
Class Approval – Classification Societies are struggling to keep up with the sudden demand in resources. Retrofit planning should not ignore time needed for Classification Approval – pressuring Classification Societies is not an effective strategy.
Owner Supplied Items – Some owners might want to reduce their retrofitting cost by purchasing and delivering equipment for their vessels. By doing so, they are risking mistaken/delayed deliveries to yards, thus risking further retrofit delays.
Yards – An estimated 300 Capesize Bulk Carriers, VLCC and Suezmax Tankers will install scrubbers this year. Our experience has shown increased retrofit lead times of 15 Drydock Days per vessel installation – an estimated global increase of 3000-3500 DDs just from scrubber installations.
Transportation of Equipment – We should not underestimate the time required to transport Ex-Works equipment to a shipyard. Delays caused by local authorities and customs regulations are not uncommon.
Beat those Bottleneck Blues
Plan, plan, and plan well in advance. Stakeholders must also mitigate the inherent risks behind each Retrofit Planning Pain Point. Only effective planning will help us beat those bottleneck blues.