SHIP BUILDING INSURANCE

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DECEMBER 2012  Sea News Shipowners Shipbuilding Orders

Ship owners enquire about new buildings, but hesitate to place orders. The trend established so far in the year in the new-build markets calls for ship owners investing in new niche markets, like LNG and LPG shipping, more fuel efficient vessels and only place orders for more conventional carriers, like bulkers, in the event of some very aggressive pricing policy from a shipyard.

In its latest weekly report, Clarkson Hellas noted that "with Gastech taking place this week, all of the major Yards from Korea and Japan have had their senior representatives in London to not only have discussions with their existing customers about current and future projects, but also looking to discuss new business with others.

Unlike last year in Holland where we saw a number of contracts being finalised, this week we have only so far seen one signing ceremony, for that of a singular 170k cbm FSRU at HHI for Clients of Höegh LNG at a reported USD 270 Mill to take their current series of such sister vessels to four" the report said. It added that "in the more conventional markets, there seems to be a little more general enquiry, with new business concluded in various asset classes.

This increase in activity will no doubt be music to the ears of the shipyards who typically look to the beginning of the fourth quarter of the year as one of their busier periods for new business. We expect over the coming weeks that the dry and container sectors especially will see further concluded contracts being reported" Clarkson Hellas noted.

In terms of reported business in dry,"clients of Oldendorff Carriers have placed an order at CSC Jinling Shipyard for three 39k dwt Handysize bulkers and a brace of SDARI 82k dwt Kamsarmaxes at a price understood to be circa USD 22 Mill per vessel and circa USD 26 Mill respectively, with delivery set to commence from the 3Q 2014.

It is also understood that the Buyers have options for a similar number of repeat vessels to be declared next year. In the Container sector, Clients of B Schulte, along with their investment partners at JP Morgan, have ordered two firm ships each of their own modified 2,700 TEU design, along with two optional Vessels at the Chinese Yard Zhejiang Yangfan, at a price understood to be circa USD 26 Mill.

The size of the ships are slightly larger than the 2,200 TEU orders we saw earlier in the year from various Greek Owners as we understand that the Chinese design house SDARI have lengthened the vessel in order to load more containers as well as to accommodate the new G type engine.

Delivery will commence from July 2014 and if all the options are declared, the final ship will deliver in September 2015. In Gas, the Swiss based Clients of Geogas have ordered one option one 9,000 cbm semirefrigerated LPG ships at STX’s smaller Busan facility in Korea. It is understood that the pricing is USD 27 Mill with delivery for the firm Vessel within 3Q 2014, with a yet to be decided date in 2015 for the optional Vessel. Hyundai Mipo have been successful in winning an order for two stainless steel fruit juice carriers from Clients of Atlanship of Switzerland.

We understand the ships are costing circa USD 40 Mill each and delivery for the first vessel will be within the end of next year. Finally Compagnie Polynesienne de Transport Maritime (CPTM) have placed an order for a single 5,000 dwt MPP vessel with passenger capacity at Shandong Huanghai Shipyard in China with delivery penned for July 2014 for an undisclosed price" the report concluded.

In a separate report yesterday, shipbroker Fearnleys noted that "activity is picking up with 15 firm orders confirmed this week. One of the major car carrier operators, namely NYK, placed orders for 4xPCTCs at two Japanese shipyards, no price reported. The new size of about 7000 cars is with a post Panamax beam, exceeding the 32.2m standard. Although high activity this week, the newbuilding market is still slow, creating some worry among the shipbuilders" it said.

Finally in the demolition segment this week, Lion Shipbrokers said that " Subcontinent market remains firm as last week paying levels between $380-$415 for bulkers, $390-$435 for tankers & $390-$420 for container vessels. China is still hungry for tonnage, paying $5-$10 per LT more than last week.

China rates are $320-$330 for bulkers, $340-$345 for tankers, $335-$340 for containers. Last but not least, Turkish market has softened for third consecutive week, paying $270-$280 for bulker, $290-$300 for tankers and $285-$295 for containers".

A CAREER IN SHIPBUILDING

Shipbuilding is the construction of ships and floating vessels. It normally takes place in a specialized facility known as a shipyard. Shipbuilders, also called shipwrights, follow a specialized occupation that traces its roots to before recorded history.

Shipbuilding and ship repairs, both commercial and military, are referred to as "naval engineering". The construction of boats is a similar activity called boat building.

Building ships is a demanding job. However over the years, shipbuilding has changed. Technology and modern equipment has helped to design, plan and build ships, making the process easier. But technology is useless without the man power to carry out the tasks. With the right people in a shipyard, building ships becomes a reliable process.

A shipyard career is a unique one. Since shipbuilding processes are constantly revised, the career offers a person lot of learning opportunities. A few of the many career options in a shipyard can be elaborated as follows:

Welder, Solderer and Cutter: These three jobs are a primary job requirement in terms of shipbuilding. They help to cut, fit and weld all the parts of the ship together. This is why they need to be able to use the required tools properly and expertly. In order to become any of the above, it is required to have an apprentice for at least a year. Apprentices along with training in theory, also get to learn practical application of the tools they need to employ.

Plumbers: Plumbers are important because the water fittings and supply in a ship has to be perfect. This is why plumbers have to know expert know-how on the mechanical aspect of pipes. Along with this, they also need to plan for any emergency situations that could emerge while the ship is on water. Individuals with apprenticeship knowledge are given preference because of the nature of the job.

Electricians: Electricians are required not just while designing homes but also when it comes to building ships. Without electricians, lighting and other electrical connections in a ship could be a major problem. Electricians in ships however are not just required to connect the light fittings but are also required to know about installing various safety instruments and the overall wiring of the ship. Electricians need to plan thinking about any emergency situations that could arise.

Carpenters: Even though shipbuilding has advanced from the days when wood was used to build ships, carpenters are required to be a part of the shipyard. There are many constructions within the ship that are made of wood. Carpenters not only help to build them but also help to repair them in case any repair work is essential. Experience is required in the form of apprenticeship for carpenters.

Construction Supervisors: As the name suggests, construction supervisors are in-charge of the entire ship construction process in the shipyard. This is a non-technical job unlike the ones specified above.

The qualifications for different shipyard career choices depend on the nature of the job. For skilled and menial jobs like that of the carpenter, plumber and welder it is enough if the individual has a high school degree along with the specified number of years of experience. For other jobs like that of the engineer and architect, there are specialised college programs that a person can enroll for.

Working in a shipyard requires long hours because of the nature of the job. The pay depends on the experience levels along with the nature of the job. This is why it becomes important for a person to think very carefully before deciding to go for a shipyard career. Only after knowing about all these aspects, should a person enter the difficult-yet-interesting profession of shipbuilding.

World shipbuilding market share by countries (2011)
Rank	Country	Combined GT	%
1	South Korea	137,596,000	37.45%
2	China	123,961,000	33.7%
3	Japan	63,641,000	17.3%
4	Philippines	423,000	1.6%

MODERN WORDWIDE SHIPBUILDING

In the 20th century, shipbuilding (which encompasses the shipyards, the marine equipment manufacturers, and many related service and knowledge providers) grew as an important and strategic industry in a number of countries around the world. This importance stems from:

* The large number of skilled workers required directly by the shipyard, along with supporting industries such as steel mills, railroads and engine manufacturers; and 

* A nation's need to manufacture and repair its own navy and vessels that support its primary industries.

Historically, the industry has suffered from the absence of global rules and a tendency towards (state-supported) over-investment due to the fact that shipyards offer a wide range of technologies, employ a significant number of workers, and generate income as the shipbuilding market is global.

Shipbuilding is therefore an attractive industry for developing nations. Japan used shipbuilding in the 1950s and 1960s to rebuild its industrial structure; South Korea started to make shipbuilding a strategic industry in the 1970s, and China is now in the process of repeating these models with large state-supported investments in this industry. Conversely, Croatia is privatising its shipbuilding industry.

As a result, the world shipbuilding market suffers from over-capacities, depressed prices (although the industry experienced a price increase in the period 2003–2005 due to strong demand for new ships which was in excess of actual cost increases), low profit margins, trade distortions and widespread subsidisation. All efforts to address the problems in the OECD have so far failed, with the 1994 international shipbuilding agreement never entering into force and the 2003–2005 round of negotiations being paused in September 2005 after no agreement was possible. After numerous efforts to restart the negotiations these were formally terminated in December 2010. The OECD's Council Working Party on Shipbuilding (WP6) will continue its efforts to identify and progressively reduce factors that distort the shipbuilding market.

Where state subsidies have been removed and domestic industrial policies do not provide support, in high-cost nations shipbuilding has usually gone into steady, if not rapid, decline. The British shipbuilding industry is a prime example of this. From a position in the early 1970s where British yards could still build the largest types of sophisticated merchant ships, British shipbuilders today have been reduced to a handful specialising in defence contracts and repair work. In the U.S.A., the Jones Act (which places restrictions on the ships that can be used for moving domestic cargoes) has meant that merchant shipbuilding has continued, but such protection has failed to penalise shipbuilding inefficiencies. The consequence of this is contract prices that are far higher than those of any other nation building oceangoing ships.

World shipbuilding industry in the 21st century

South Korea is the world's largest shipbuilding nation with a global market share of 37.45% in 2011. South Korea is the global leader in the production of advanced high-tech vessels such as cruise liners, super tankers, LNG carriers, drill ships, and large-sized container ships. In the 3rd quarter of 2011, South Korea won all 18 orders for LNG carriers, 3 out of 5 drill ships and 5 out of 7 large-sized container ships.

South Korea's shipyards are highly efficient, with the world's largest shipyard in Ulsan operated by Hyundai Heavy Industries slipping a newly-built, $80 million vessel into the water every four working days. South Korea's "big three" shipbuilders, Hyundai Heavy Industries, Samsung Heavy Industries, and Daewoo Shipbuilding & Marine Engineering, dominate global shipbuilding, with STX Shipbuilding, Hyundai Samho Heavy Industries, Hanjin Heavy Industries, and Sungdong Shipbuilding & Marine Engineering also ranking among the top ten shipbuilders in the world. In 2007, STX Shipbuilding further strengthened South Korea's leading position in the industry by acquiring Aker Yards, the largest shipbuilding group in Europe. (The former Aker Yards was renamed STX Europe in 2008). In the first half of 2011, South Korean shipbuilders won new orders to build 25 LNG carriers, out of the total 29 orders placed worldwide during the period.

China is an emerging shipbuilder that briefly overtook South Korea during the 2008-2010 global financial crisis as they won new orders for medium and small-sized container ships based on their cheap prices, although its current production is limited mainly to basic vessels.

Japan lost its once industry leading position to South Korea in 2003, and its market share has since fallen sharply. The European nations' combined output has fallen to a tenth of South Korea's, and the outputs of the United States and the rest of the world have become negligible.

MODERN MANUFACTURING

Modern shipbuilding makes considerable use of prefabricated sections. Entire multi-deck segments of the hull or superstructure will be built elsewhere in the yard, transported to the building dock or slipway, then lifted into place. This is known as "block construction". The most modern shipyards pre-install equipment, pipes, electrical cables, and any other components within the blocks, to minimize the effort needed to assemble or install components deep within the hull once it is welded together.

Ship design work, also called naval architecture, may be conducted using a ship model basin. Modern ships, since roughly 1940, have been produced almost exclusively of welded steel. Early welded steel ships used steels with inadequate fracture toughness, which resulted in some ships suffering catastrophic brittle fracture structural cracks (see problems of the Liberty ship). Since roughly 1950, specialized steels such as ABS Steels with good properties for ship construction have been used. Although it is commonly accepted that modern steel has eliminated brittle fracture in ships, some controversy still exists. Brittle fracture of modern vessels continues to occur from time to time because grade A and grade B steel of unknown toughness or fracture appearance transition temperature (FATT) in ships' side shells can be less than adequate for all ambient conditions.

Ship repair industry

All ships need maintenance and repairs. A part of these jobs must be carried out under the supervision of the Classification Society. A lot of maintenance is carried out while at sea or in port by ship's staff. However a large number of repair and maintenance works can only be carried out while the ship is out of commercial operation, in a Shiprepair Yard. Prior to undergoing repairs, tankers must dock at a Deballasting Station for completing the tank cleaning operations and pumping ashore its slops (dirty cleaning water and hydrocarbon residues).

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SHIP BUILDING LINKS

http://www.marineinsight.com/careers-2/shore/different-jobs-in-a-shipyard-shipbuilding-industry/
http://www.idp-shipyard.be/shipbuilding.html

http://www.gvpedia.com/Abu-Dhabi/Abu-Dhabi-Ship-Building-Top-Company.aspx

EDUCATIONAL LINKS

http://www.testking.com/JN0-101.htm

www.testking.com

http://www.certkiller.com/Security-plus-certification-training.htm

examsheets.com

http://www.testkingsite.com/hp/HP2-T16.html

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