SMM 2014 to Highlight Market Trends

With the “fiscal cliff” in the United States and the Euro zone debt crisis and an incomplete reform of the finance sector, it is certainly taking the global economy enough time to get back in shape. The economic well-being of the shipping industry, especially of container shipping, is tightly interlinked with the global economic cycles.

Yet, slowly but surely the mood is changing. Clarkson Research is forecasting a 4.7 per cent increase in global container traffic for this year. For 2014, the market research institute expects as much as 7.2 per cent.

“The changing economic climate is palpable,” says Bernd Aufderheide, Chairman of the Board of Hamburg Messe und Congress GmbH. Every two years the halls of the Hamburg Messe fair site are the venue of SMM, the leading international maritime trade fair Hamburg.

With more than 2,000 exhibitors and 50,000 visitors from all continents, this fair is one of the world’s most important industry events. At the next SMM, held from 9 to 12 September 2014, the current trends of the industry will be highlighted by a programme that promises to be a festival of superlatives.

 Newbuilding Orders on the Rise

The activity level in the shipbuilding market is a key indicator of the general confidence in the industry. After years of dismal news, experts are seeing positive signals around the world. Numerous ship-owning companies are taking advantage of the current low price levels, ordering ships now to be ready for the next economic upturn. For example, the Chinese Chengxi Shipyard Co. Ltd. will build two “Dolphin 64” bulk carriers for Dalnave Navigation Inc. of Greece. The Russian republic of Komy has ordered a 30-metre passenger ferry from REB Shipyard, Archangelsk. The newbuild will cost around EUR600,000. The ship-owner Teekay LNG Partner L.P. is having two additional LNG carriers built by Daewoo Shipbuilding & Marine Engineering Co. Ltd., South Korea. The completion of one particular ship is being awaited with great anticipation: “Pieter Schelte”, a giant catamaran that will mainly serve as a utility vessel for oil platform installation and decommissioning work. With a lifting capacity of up to 48,000 tons, this ship will be able to dismantle even the heaviest oil platform topsides. 382 metres long and 124 metres wide, she is expected to be launched in early 2014.

Meanwhile, many German ship-owning companies have taken action: In response to the trend, Döhle Schiffahrts KG has ordered a minimum of two 64,000 dwt Ultramax bulk carriers from Jiangsu Yangzijiang Shipbuilding Co. Ltd., deliverable in late 2015/early 2016, with options for two additional vessels. Ohdendorff Carriers, a time-honoured ship owner headquartered in Lübeck, Germany, has placed an order for four new bulkers with the Chinese Jiangsu New Yangzijang shipyard, scheduled for delivery in 2015 and 2016, respectively. Hamburg Süd is said to have three 10,000 TEU containerships on order with the South Korean shipbuilding group Daewoo Shipbuilding & Marine Engineering. The German shipyard Fassmer is building a new ferry worth EUR30 million for AG Ems. And Meyer Werft is working on a 1,680-cabin cruise liner for Genting-Holding. The vessel will accommodate 3364 passengers and is worth around EUR707.2 million.

 “Yet, in spite of this positive development the financing challenge continues to be a major concern for every other shipyard in assessing their economic risks. In the current environment, the capital need can only be met with great difficulty,” says Hans Thon, Chairman of the IHK Nord and President of the IHK Schwerin, Germany chambers of commerce. Thon therefore calls for a support initiative by the German national and state governments to provide loan guarantees and financing backup.

What goes for the German market applies to other countries, as well. This is why financing is one of five key topics for SMM, the leading international maritime trade fair. The convention will also cover maritime environment protection, security and defence, the offshore segment and recruiting. Each day of the fair will be dedicated to one of these key topics, a feature of the new concept for SMM. As an overarching leitmotiv, “Innovation” will be the keyword for the entire fair.

At the Ship Finance Forum, which will take place one day ahead of SMM (8 September 2014), reputable international experts will try to find answers to financing questions currently affecting the global shipbuilding and shipping industry. With increasing frequency, US investment companies are playing a role in this field.

Focus on Innovation

On 9 September, everything will revolve around environment protection. Participants of gmec, the global maritime environmental congress (motto: “Setting the Green Course”), will discuss advanced solutions and technologies enabling the shipping industry to achieve its environmental targets. One day later, MS&D, the international conference on maritime security and defence hamburg, will put security and defence on the agenda.

“At the MS&D conference experts will examine new options for protecting sea routes and ports,” explains fair organiser Aufderheide. On 11 September the SMM Offshore Dialogue will explore the opportunities and challenges the shipbuilding industry and its suppliers face when serving the offshore oil and gas and wind energy sectors. The last day of SMM will be dedicated to the topic of recruiting. Professional education and follow-up training as well as personnel recruitment for German companies will be the featured topic.

Hamburg Messe und Congress GmbH, the company organising the leading international maritime trade fair in Hamburg, has also established two international subsidiary fairs, SMM India and SMM Istanbul. In April 2013 in Mumbai, SMM India will highlight new accomplishments of the subcontinent’s maritime sector. SMM Istanbul will take place seven months ahead of SMM Hamburg. “Business relations initiated in Mumbai or Istanbul can subsequently be continued and further developed in Hamburg,” says Peter Bergleiter, Business Unit Director at Hamburg Messe und Congress GmbH. With this holistic approach and its broad spectrum of international exhibitors and visitors, SMM demonstrates its position as the world’s leading trade fair for the maritime industry.

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Press Release, November 13, 2013