Final report: Ad Hoc Working Group on Maritime Interrelations Draft

1
Final report Ad Hoc Working Group on Maritime
Interrelations
- Draft -
2
List of contents

• Page
• 1. Objectives and methods
  2
• 2. Overview Matrices for the different sectors
  11
• 3. Matrix for all sectors
  17
• 4. Quantitative perspective of the European
  maritime industry 19
• 5. Overview scenarios
  22
• 5.1 Scenario 1
  
  24
• 5.2 Scenario 2
  
  32
• 5.3 Scenario 3
  
  35
• 6. Conclusion
  38
• 7. Enclosure-Matrices from the different sectors
  40

3
Mission statement of MIF

• Provide a permanent interface to the Commission
  for industry, particular SMEs
• Foster the creation of synergies between maritime
  activities in various sectors
• Provide input to the political debate and support
  the decision making
• Improve the involvement of member states in
  maritime policies
• Keep the European Parliament advised of
  developments/problems of maritime insustries and
  involve MEPs where appropriate
• Maintain and promote a competitive maritime
  cluster for Europe, including maritime know-how
• Enhance the visibility of maritime industries
  towards the general public

4
Aim of the group

• The group undertook evaluations on development in
  the global shipbuilding market in 2001
• The group should identify and evaluate various
  interrelations and interdependencies between
  different segments in the maritime sector
• The work focus on identifying how developments in
  one segment of the maritime sector influences
  other maritime segments

5
Members of the Ad Hoc Working Group on Maritime
Interrelations

• The Association of Danish Shipbuilders, T. H.
  Christensen
• Committe of E.U. Shipbuilders Associations, Dr.
  R. Lüken, A. Lega
• European Commission Directorate-General
  Enterprise, J. Renders
• Associacao das Industrias Maritimas, S. Fonseca
• Shipbuilders Association of Spain, R. Lopez-Eady
• European Community Shipowners Associations, H. de
  Meester, C. Tytgat
• European Marine Equipment Council, B. Dognaux
• German Shipbuilding and Ocean Industries
  Association, G. Carlsson
• Association of Finnish Marine Industries, H.
  Nordell
• Fincanteri, Asserto
• Association of European Shipbuilders and
  Shiprepairers, M. Kozlowski
• European Association of Classification Societies,
  A. Martens, J. O. Lüer

6
Objectives of this report

• This report is about interdependencies of the
  five major sectors in the network of the maritime
  industry.
• By defining three likely business scenarios, the
  interrelations between the sectors to each other
  and the consequences for the maritime industry
  are laid out.

7
The five major sectors of the maritime industry

• Ship owners
• Ship builders/ship repairers
• Equipment manufacturers
• Classification Societies
• Others (ports, off-shore etc.)

8
Interdependencies between the different sectors
of the maritime field
Ship owners
Classification Societies
Ship builders,shiprepairers
Others(e. g. ports, off-shore, shippers)
Equipmentmanufacturers
9
Methods of data compiling

• The three business scenarios have been built up
  by data from matrices filled out by the following
  associations
• Associacao das Industrias Maritimas
• Shipbuilders Association of Spain
• European Community Shipowners Associations
• European Marine Equipment Council
• German Shipbuilding and Ocean Industries
  Association
• European Association of Classification Societies

10
Steps for analysing the task
11
List of contents

• Page
• 1. Objectives and methods
  2
• 2. Overview Matrices for the different sectors
  11
• 3. Matrix for all sectors
  17
• 4. Quantitative perspective of the European
  maritime industry 19
• 5. Overview scenarios
  22
• 5.1 Scenario 1
  
  24
• 5.2 Scenario 2
  
  32
• 5.3 Scenario 3
  
  35
• 6. Conclusion
  38
• 7. Enclosure-Matrices from the different sectors
  40

12
Matrix for the sector ship owners
13
Matrix for the sector ship builders, ship
repairers
14
Matrix for the sector classification societies
15
Matrix for the sector equipment manufacturers
16
Matrix for the sector others
17
List of contents

• Page
• 1. Objectives and methods
  2
• 2. Overview Matrices for the different sectors
  11
• 3. Matrix for all sectors
  17
• 4. Quantitative perspective of the European
  maritime industry 19
• 5. Overview scenarios
  22
• 5.1 Scenario 1
  
  24
• 5.2 Scenario 2
  
  32
• 5.3 Scenario 3
  
  35
• 6. Conclusion
  38
• 7. Enclosure-Matrices from the different sectors
  40

18
Matrices for all sectors
19
List of contents

• Page
• 1. Objectives and methods
  2
• 2. Overview Matrices for the different sectors
  11
• 3. Matrix for all sectors
  17
• 4. Quantitative perspective of the European
  maritime industry 19
• 5. Overview scenarios
  22
• 5.1 Scenario 1
  
  24
• 5.2 Scenario 2
  
  32
• 5.3 Scenario 3
  
  35
• 6. Conclusion
  38
• 7. Enclosure-Matrices from the different sectors
  40

20
Turnover of the maritime sectors (1997 Eur 159
bn)
Source Policy Research CorporationISL (2001)
21
Direct employment in the maritime sectors in the
EU (1997 1.545.000 employees)
Source Policy Research CorporationISL (2001)
22
List of contents

• Page
• 1. Objectives and methods
  2
• 2. Overview Matrices for the different sectors
  11
• 3. Matrix for all sectors
  17
• 4. Quantitative perspective of the European
  maritime industry 19
• 5. Overview scenarios
  22
• 5.1 Scenario 1
  
  24
• 5.2 Scenario 2
  
  32
• 5.3 Scenario 3
  
  35
• 6. Conclusion
  38
• 7. Enclosure-Matrices from the different sectors
  40

23
The three business scenarios defined
Scenario 1 Is European maritime knowledge at
risk when shipbuilding moves
from Europe to Asia? Scenario 2 Overordering of
ships in Asia- a risk for the
European maritime industry? Scenario 3 Does
Europe loose influence on standards if
European equipment manufacturers move to
East Asia due to competitive advantages?
24
Scenario 1 Is European maritime knowledge
at risk when shipbuilding moves
from Europe to Asia?
25
Ship owner Shipbuilder
Potential loss of know how in the EU would be a
negative development for the ship owners and
shipbuilders.
Reduced know-how and efficiency will have
negative impact on ship owners.
26
Shipbuilder Shipowner
Shipping activities are strengthening the
research institutions and the educational
infrastructure to the benefits of the European
yards.
27
Classification societies
Shipbuilder
A relocation of ship building (caused through
Asian subsidising) to other parts of the world
would result in organisational changes of the
classes towards the future markets.
A strong shipbuilding in Europe further
reinforces the traditional links between
shipbuilders and classes in their home markets
and secures extensive technical research.
28
Equipment manufacturers
Shipbuilder
A shift of shipbuilding and repair facilities to
the Far East implifies a change of strategy for
the suppliers.
Strong partnership between European yards and
suppliers is beneficial to both parties as this
secures extensive technical research and
innovation.
29
Shipbuilding moves to Asia loss of knowledge in
the European maritime industry
Less business for the European shipbuilding
industry results in the disappearance of yards
and knowledge.
Loss of technical know-how for ship owners in
Europe.
Ship builders,ship repairers
Classification societies
Ship owners
Classification would relocate towards future
market (Asia) and reorganise themselves
accordingly. Loss of technical know-how and
research.
Business strategy of equipment manufacturers
heading with their production site and their
knowledge to Asia.
Equipmentmanufacturers
30
Maritime sectors in Europe the knowledge
network
The network of research and educational
institutions provide benefit to the ship yards.
Ship owners get know-how of yards for an
efficient vessel.
Ship builders,ship repairers
Classification societies
Ship owners
Traditional links between classes and ship yards
in Europe geerate an extensive research and
cooperation.
Strong partnership between equipment
manufacturers and shipbuilders for innovation and
research.
Equipmentmanufacturers
31
Conclusions for scenario 1

• The European martime industry is characterised by
  strong and traditional interrelations between the
  sectors
• Changes caused from one sector will immediately
  have an effect on the other sectors due to this
  strong network
• A relocation of shipbuilding from Europe to Asia
  would have a severe effect on the knowledge basis
  of the European maritime industry the maritime
  supply and service industry would orient itselves
  towards the future market
• Consequence for Europe
• Loss of maritime knowledge
  and employment

32
Scenario 2 Overordering of ships in Asia-
A risk for the European maritime
industry?
33
Overordering in Asia - a risk for Europe
World economy and ship ordering sluggish
Korea has to fill its massive yards capacities
Korea presses suppliers for offering cheaper ships
Suppliers do not achieve enough return
Korea lowers ship newbuilding prices
Ship owners order ships due to low prices
Suplliers have to streamline service with less
research and redundancies
Overcapacity of tonnage on the shipping market
deteriorates the rates
European yards suffer on low prices and hardly
get any business
Quality and safety of service products suffer
34
Conclusions for scenario 2

• Overordering affects all sectors in the maritime
  industry
• The suppliers, pressed by the low newbuilding
  prices, can not offer decent products and
  services anymore
• The newbuilding price levels offered from Korean
  yards can not be met by European yards
• Consequence for Europe
• Danger of loss of product
  quality, safety and
  employment in the European maritime industry

35
Scenario 3 Does Europe lose influence on
standards if European equipment
manufacturers move to East Asia
due to competitive advantages?
36
European equipment manufacturers heading to Asia
As shipbuilding is shifting to Asia, yards buy
equipment at different (not European) countries
European equipment manufacturers have to follow
the market and head to Asia
Research, innovation and standardisation will
take place mainly in Asia
37
Conclusions for scenario 3

• A shifting shipbuilding industry buys the
  equipment at different (distant) countries and
  generates a competitive advantage for local
  (Asian) equipment manufacturers
• The European equipment manufacturers have to
  follow the market by changing their strategies
  towards Asia
• Due to low equipment prices safety and quality
  suffer
• Consequence for Europe
• Danger of loss of setting
  standards as the equipment
  manufacturers have left for Asia. Standards will
  be developed mainly in Asia.

38
List of contents

• Page
• 1. Objectives and methods
  2
• 2. Overview Matrices for the different sectors
  11
• 3. Matrix for all sectors
  17
• 4. Quantitative perspective of the European
  maritime industry 19
• 5. Overview scenarios
  22
• 5.1 Scenario 1
  
  24
• 5.2 Scenario 2
  
  32
• 5.3 Scenario 3
  
  35
• 6. Conclusion
  38
• 7. Enclosure-Matrices from the different sectors
  40

39
Conclusion

• The European maritime industry is characterised
  through strong and traditional
  interrelationships between the sectors
• Changes in business directly affects this network
  
• A potential shift of shipbuilding away from
  Europe to Asia would have tremendous effects on
  the European maritime industry network
• loss of the maritime knowledge network
• redundancies up to 1.5 million employees
• quality and safety will be at risk
• research and innovation will not take place in
  Europe anymore
• the decision on standards will be taken in Asia

40
List of contents

• Page
• 1. Objectives and methods
  2
• 2. Overview Matrices for the different sectors
  11
• 3. Matrix for all sectors
  17
• 4. Quantitative perspective of the European
  maritime industry 19
• 5. Overview scenarios
  22
• 5.1 Scenario 1
  
  24
• 5.2 Scenario 2
  
  32
• 5.3 Scenario 3
  
  35
• 6. Conclusion
  38
• 7. Enclosure-Matrices from the different sectors
  40

41
Matrices for the sector ship owners
42
A Matrix for the sectors ship owners
ship builders
43
A Matrix for the sectors ship owners
ship repairers
44
B Matrix for the sectors ship owners
equipment manufacturers
45
C Matrix for the sectors ship owners
classification societies
46
D Matrix for the sectors ship owners
others
47
D Matrix for the sectors ship owners
others
48
D Matrix for the sectors ship owners
others
49
Explanatory note / addendum
50
Matrices for the sector ship builders/ship
repairers
51
E Matrix for the sectors ship builders/ship
repairers equipment manufacturers
52
F Matrix for the sectors ship builders/ship
repairers shippers, ports and others
53
F Matrix for the sectors ship builders/ship
repairers off-shore
54
G Matrix for the sectors ship builders/ship
repairers classification societies
55
H Matrix for the sectors ship builders/ship
repairers ship owners
56
Matrices for the sector classification
societies
57
I Matrix for the sectors classification
societies ship owners
58
J Matrix for the sectors classification
societies ship builders, shiprepairers
59
J Matrix for the sectors classification
societies ship builders, ship repairers
60
KMatrix for the sectors classification societies
equipment manufacturers
61
LMatrix for the sectors classification societies
others
62
LMatrix for the sectors classification societies
others
63
LMatrix for the sectors classification societies
others
64
Matrices for the sector equipment
manufacturers
65
M Matrix for the sector equipment manufacturers
ship owners
66
N Matrix for the sector equipment manufacturers
ship builders, ship repairers
67
O Matrix for the sector equipment manufacturers
classification societies
68
P Matrix for the sectors equipment manufacturers
others (leisure)
69
P Matrix for the sector equipment manufacturers
shippers
70
P Matrix for the sectors equipment manufacturers
ports
71
P Matrix for the sectors equipment manufacturers
off-shore
72
The End