Norway is synonymous with car carriers despite being neither a significant importer nor exporter of vehicles.
Hoegh Autoliners, Wallenius Wilhelmsen, United European Car Carriers (UECC) and Siem Car Carriers are all familiar operators serving the major car manufacturers. Norwegian Car Carriers (NOCC), JB Ugland and Gram Car Carriers are tonnage providers.
In fact, it was NOCC’s founding partner Dyvi that is claimed to have built the world’s first ro-ro car carrier in 1964, the Dyvi Anglia. Purpose-built car carriers existed previously but using lift-on, lift-off technology.
Holding onto its lead
Espen Hofland, director and head of the ro-ro department at Oslo-based Fearnleys, predicts that Norway will retain its leading position.
“We have the operators, the banks, the tonnage providers and the brokers,” he says. “The full chain and I think that will be the case for many years to come.”
He notes that most of the players are currently or have been active in other areas of the market but have chosen to specialise in car carriers.
One possible reason is that car carriers in Norway are viewed as industrial shipping and less volatile than other sectors such as dry bulk and tankers.
NOCC chief executive Olav Sollie says the competence and experience accumulated in Norway led to development of the pure car/truck carrier designs with flexible decks and heavy ramps.
Norwegian shipping, faced with little captive cargo except for fish, timber and later oil and gas, has always had to be innovative and competitive, he says.
The operators’ trading patterns are based on how major carmakers set up their production bases around the globe. Basically, the Norwegian players share the same client base, although volumes of individual brands carried differ.
Wallenius Wilhelmsen has pioneered vertical expansion into logistics as opposed to being simply a port-to-port based shipping company. Hoegh Autoliners, for example, is also growing its terminal and associated land-based activities, including vehicle processing.
Source: Drewry Shipping Consultants
Tom Ossieur, head of car carriers at shipping consultancy Drewry, says offering automotive logistics to the car manufacturers had become a priority for companies.
Wallenius Wilhelmsen group, for example, operates 13 marine terminals and 77 vehicle processing centres.
But the Norwegians, similar to their peers in Japan and Korea, have eased off the newbuilding throttle in response to tougher conditions.
The current orderbook is small. Wallenius Wilhelmsen has two newbuildings still to be delivered, UECC two and Siem Car Carriers two. All are being built in China.
Siem is also interested in taking delivery of a 7,000-ceu newbuilding 75% completed in Croatia but cancelled after the yard ran into financial difficulties.
Recent deliveries to Norwegian owners have been typically in-house designed, panamax size or larger and well equipped to take plenty of high and heavy cargoes as well as cars.
Leading the pack
Ossieur says traditionally the Norwegian operators “have led the pack and continue to do so” in ordering vessels with stronger ramps and more hoistable decks to cater for high and heavy and project cargo.
Vessels are built for a 30-year life and tonnage providers in particular want to optimise market coverage with vessels that can accommodate a wide range of cargoes and appeal to as many charterers as possible, Hofland says.
Among the operators, Hoegh Autoliners has undergone a fleet renewal, taking delivery in 2016 and 2017 of six fuel-efficient, 8,500-ceu units from Xiamen Shipbuilding Industry, which are among the largest vessels of this type.
Looking forward, Hofland says: “I don’t see any big newbuildings investment additional to those ships already in the book.”
With the IMO 2020 sulphur cap looming, attitudes are divided over the use of scrubbers.
For example, Hoegh Autoliners chief executive Ivar Hansson Myklebust says scrubbers can increase the CO2 footprint of vessels, whereas Wallenius Wilhelmsen has indicated it will retrofit a large number of its ships.
It appears the Norwegian tonnage providers are willing to consider fitting scrubbers if they secure charter commitments coupled with a rate premium to cover the investment.
UECC’s 3,600-ceu newbuildings at Jiangnan Shipyard will use LNG, as will Siem’s 7,700-ceu units at Xiamen Shipbuilding.
Sollie says shipping in general faces huge challenges on the regulatory and environmental fronts.
It coincides with new technological developments affecting how ships are managed and operated. These may challenge business models.
Still, Sollie says: “I believe Norwegian companies are well placed and prepared to utilise such opportunities to their advantage.”