Speaking in familiar territory Clarkson’s Dr Martin Stopford upbraided the shipping industry this morning as keynote speaker at the Danish Maritime Technology Conference. Economies of scale and savings from technology are diminishing giving what Stopford warned were “dwindling returns”. He also lashed out at Chinese built ships.
“The harder you squeeze technology, the less you get out of it,” the well-known analyst said. Similarly economies of scale, especially for the liner trades, were now minimal. While costs dropped dramatically as liners expanded ship capacity from 5,000 to 10,000 teu, the rise from 10,000 to 20,000 teu has seen “diminishing scales of return”, he said.
Stopford also had some damning words to say about Chinese shipbuilding capabilities. “Some of the designs coming out of China have been pretty poor,” he said. The Japanese did not get off too lightly either, Stopford saying that some of their ship fuel saving tests had been massaged since some of the tests were using gasoil rather than normal bunker fuel.
Making some in the room wonder who on earth would be a shipowner in today’s environment, Stopford said: “The business model today is small companies, big balance sheets, incredibly volatile markets and tight incomes.”
Stopford also noted that environmental pressure has “absolutely picked up” this year.
The author of Maritime Economics then went on to slam the industry for its massive inefficiency. “If you knew how much inefficiency there was in shipping you would be astonished,” he said.
Stopford’s solutions involve ship automation, integrating fleet systems, and using Big Data, among others. He said the industry could learn a lot from tech giant Apple and its founder, Steve Jobs. “The reason Steve Jobs was so smart was because he got a framework in place,” he said, adding that he hoped shipping could get some universal framework in place too.
The Danish Maritime Technology Conference is one of the 80-plus events taking place during this week’s Danish Maritime Days in Copenhagen.