Concerns over falling shipbuilding standards

Executives from leading shipping companies, class societies and shipyards are alarmed by falling construction standards in the rush to meet a record demand for new ships. “We have to do something now before it is too late,” said George Sarris, managing director of Enterprises Shipping & Trading, manager of one of Greece’s largest fleets. Sarris warned that a decline in shipbuilding standards, caused mainly but not solely by the emergence of numerous new yards in China, threatened to throw away the past 15 years of progress in making shipping safer. “Safety and quality standards are non-existent and where they should happen to exist they are being compromised all the way,” he said, speaking at Lloyd’s List International Shipbuilding Conference.
According to Sarris, many recently- established shipbuilders simply “copy-pasted” specifications from other existing designs, sometimes combining them in ways that “make no sense”.
His concern was echoed by a prominent private Chinese shipbuilder, Simon Liang, chairman and chief executive of Sinopacific Shipbuilding Group, which five years ago was delivering two vessels a year but which has 45 deliveries scheduled for 2008.
“It is my personal opinion, but maybe 30% or maybe 40% of ships delivered by these new shipyards are going to be sub-quality. This market will leave unsafe ships for sure.”
Liang said that the industry had been growing too fast for the past five years and too few of the new builders had been able to acquire the proper knowledge or resources.
However, this lack of expertise did not stop them experimenting on complex high-tech ships, he warned. “Some new yards go directly to some difficult projects, for example they go to chemical ships,” he said. “For those who have no knowledge nothing is difficult,” he added.
At the same time, he predicted that many of the yards that had been set up in the quest for instant profits would be short-lived. “A lot of people are in trouble today,” he said. “In this industry you need time to get good efficiency, I would say it takes five years, but 90% of the beach yards are not going to stay a long time. They may make some money but then disappear.”
Liang urged shipowners to “choose very carefully” when selecting a shipbuilder for their contracts. Nick Brown, general manager for Lloyd’s Register’s marine business development in China, provided examples of greenfield sites that had already established impressive facilities.
But he cautioned that “at the other end of the scale the shipbuilder can be little more than a beach with bamboo ladders and some chain blocks”. He added: “We also get requests from owners that are interested in building at yards that are this kind of standard.”
Brown told conference delegates that LR’s experience in China showed that getting a modern facility in place was only the first step. The rate of expansion had diluted the experience of shipyard management and qualified workers, leaving an alarming deficit in recruitment and training. Securing quality materials and components was another challenge. “Equipment suppliers have not kept pace with yard expansion and components may be ordered without the suppliers having any concept of the International Association of Classification Societies’ supplier requirements,” Brown said.
“Greenfield yards are high risk for owners now,” agreed Matthew Flynn, managing director of Singapore-based consultancy and research firm Worldyards. Flynn said that this could change, but that yards needed “at best five years to become proficient”.
In evaluating start-up yards, Worldyards was careful to make a distinction between entirely new shipbuilding players and new facilities set up by established shipbuilding corporations, he said. There are widely differing estimates of how many new shipbuilders have appeared. Worldyards has counted at least 60 newcomers out of 129 Chinese shipbuilders it has verified with orders, with another eight start-ups recently in South Korea. But Liang cited official Chinese statistics that the number of builders in the country by the end of last year had shot up to 1,059, and unofficially could be as many as 3,000.

Source: The Motorship