For the first time in its history, Hamburg Messe und Congress GmbH (HMC) has conducted a large-scale study asking exhibitors and visitors of the leading global trade fair for the maritime industry to give their assessment of the sector’s economic and technological development. The SMM Maritime Industry Report (SMM MIR) shows that the industry is looking to the future with confidence, and reveals the key issues.
Reflecting views of over 2,500 participants from 69 countries, many holding senior positions in the maritime industry, the SMM MIR, prepared jointly by HMC as the organizer of SMM, and the market research institute Mindline, presents a good impression of the prevailing sentiments in the industry. “Our first comprehensive industry survey is a great source of inspiration as we prepare for the next SMM in September 2018,” says President and CEO Bernd Aufderheide, HMC.
Although the maritime industry has gone through difficult times, it is ready to tackle the future with a can-do spirit. “The results of the SMM MIR are a very valuable source of information for us in aligning the SMM itself and the accompanying conferences with the needs of the industry.” 10 months before it opens its doors, SMM is almost fully booked. “This underscores the role of SMM as the world’s leading industry fair, and it shows how much value companies assign to personal interaction, expert input and tangible technological progress, especially in turbulent times,” says Aufderheide.
Big response and top-flight participants. “We asked the exhibitors and visitors of SMM about the top items on their agendas, and how they gauge their economic perspectives,” says Claus Ulrich Selbach, Business Unit Director, Maritime and Technology Fairs & Exhibitions, HMC. Respondents included representatives of ship-owning companies, shipbuilders and suppliers from around the world. In addition to the economic and technological development the survey also addressed planned investments. “I haven’t heard of any other study covering the industry in such breadth,” said Hauke Schlegel, Managing Director, Marine Equipment and Systems working group, at the German engineering industry association, VDMA.
The participation profile is a representative cross-section of the entire industry: (1) Roughly 3/4 (74%) of respondents were SMM visitors, and one fourth (24%) were exhibitors; (2) Nearly 1/5 of respondents (19%) work at a ship-owning company, 13% are employed by a shipyard, and the majority (67%) work at a supplier; and (3) 72% of respondents hold a senior position at their company, and approximately 2/3 (65%) make investment decisions, either alone or in a team.
Ship-owning companies plan to invest. For the first time a “Maritime Industry Score” was computed based on the outcome of the survey. This score reflects the business expectations of ship-owning companies, shipyards and suppliers. “We want to hold regular business climate surveys in future to find out more about the mood in the industry,” says Claus Ulrich Selbach.
In the wake of an economic lull that has lasted 9 years, the results of the current survey betray a certain basic optimism across the maritime sector, in spite of expectations of a continuing consolidation process. The overall Maritime Industry Score was 54.6 points, with the shipping segment’s 33.2 points lagging behind shipbuilding (47.1 points) and supply industry (61.9 points). These figures represent the ratio of positive versus negative growth expectations. The positive outcome proves that the industry is beginning to see light at the end of the tunnel.
There are signs of hope even among ship-owners. Some of the players clearly view the growth prospects as positive, indicating an increasing willingness to invest, as one particular survey result reveals: 20% of responding decision-makers consider it as ‘very likely’, and an additional 12% as ‘likely’ that they will order new ships within the next 12 months. “This is especially surprising considering the fact that this value is far above the typical fleet rejuvenation rate,” comments Dr. Max Johns, Managing Director, German Ship-owners Association, VDR.
Strong interest in LNG. There is one particular field in the shipbuilding segment where the need to act is felt especially urgently: Following the entry into force of the Ballast Water Convention of the International Maritime Organization (IMO) in early September 2017, 54% of responding ship-owner CEOs intend to retrofit their ships accordingly.
Stricter environmental regulations are stirring up the ship propulsion segment. The industry is homing in on LNG as an alternative to conventional ship fuels. 44% of respondents said LNG is their first choice when contemplating ship new building orders. But hybrid solutions based on marine diesel are also popular. “There is no way around the energy transition in the maritime sector. Increasing numbers in new building orders and retrofits show LNG is gaining ground. The future of low-emission shipping has long begun,” says Dr Reinhard Lüken, General Manager, German Naval Architecture & Ocean Engineering Association, VSM. The supply industry agrees with 49% of respondents that consider LNG as the champion alternative fuel.
High up on the agenda is Autonomous Shipping: 36% of ship-owner executives believe it to be the future of merchant shipping. 90% of those in support believe that the use of unmanned ships will be routine in as little as 20 years. “We have seen an enormous shift in public opinion here,” says Max Johns. The two-decade horizon is not a far-fetched prospect, considering the average service life of a ship, he adds.
Study lends fresh impetus to SMM. The maritime sector is already showing great interest in remote monitoring and ways to protect ships against cybercrime. “The opportunities and challenges of digitalization are on everybody’s mind in this industry. Therefore this topic will play a key role at SMM 2018, f or example during the Maritime Future Summit,” says Business Unit Director, HMC Selbach. New technologies that can be helpful in optimizing processes and increasing efficiency are in demand. 66% of respondents from supply companies see a “high” or “very high” sales potential for their products in the market. Three out of four (74%) have observed that customers are welcoming innovative technology. The responding suppliers believe that the German, Chinese, and US markets have the highest growth potential.
Overall, nearly 70,000 global contacts where utilized in the online survey for the SMM MIR. More than 2500 respondents answered every single question. “This is a better response than what many comparable surveys have been able to achieve,” says Project Lead, Jörg Kunath, Mindline. HMC plans to conduct the SMM MIR every 2 years to draw a continuous picture of the maritime industry mood.
The leading international maritime trade fair takes place in Hamburg every two years. More than 2,200 exhibitors and roughly 50,000 visitors are expected to attend the trade fair in the famous port city during 4-7-September-2018. SMM covers all segments of the maritime value chain, bringing together the decision-makers, and highlighting innovative technology.