Bajansailor
Well-Known Member
From Der Spiegel - \'The new shipbuilding boom\'
The article below was taken from the on line edition of Der Spiegel at :
http://www.spiegel.de/international/spiegel/0,1518,467655,00.html
THE NEW SHIPBUILDING BOOM
Giants of the Waves
By Thomas Schulz
Shipbuilding, dismissed as a dying industry until recently, is now experiencing a record boom. Even German shipyards are booked solid for years in advance. But the real heavyweights are to be found in Asia.
When Norbert Zelck leaves his temporary office near the Hyundai shipyard's main gate in the morning and walks out into a cacophony of warning sounds and screeching winches, it is often to embark on a search. "Where did they put it this time?" he mutters as he climbs into his car and drives away, looking for his ship. You might think that such a giant vessel -- it will be more than 300 meters (984 feet) long when it is finished -- would be easy enough to find.
But no. All Zelck can see are the seemingly endless quay walls as he drives around, hardly noticing the obstacles that suddenly pop up in the middle of the road: bows, stern sections and complete deckhouses.
Even such a ship can get mislaid in a place this big: The huge shipyard covers an area equivalent to 1,000 soccer fields. Forty thousand people work here in Ulsan at the southern tip of South Korea, in what is the world's largest shipbuilding operation.
It takes Zelck 20 minutes to find the gray steel shell that will be his ship one day: the Tsingtao Express. There it is on the last wharf, scarred with weld seams and hidden behind two tankers that are almost finished and already freshly painted in light blue. "It's coming along," says Zelck.
Originally a captain and ship engineer for Germany's largest container shipping company, Hapag-Lloyd, Zelck hasn't commanded a ship in years. Instead, he has a selection of new titles: Superintendent Engineer, Chief Supervisor and Site Manager. Nowadays he is no longer responsible for only one ship, but for many. He is currently supervising the construction of eight giant container ships Hapag-Lloyd is having built by Hyundai, each capable of transporting 8,750 standard containers (or TEU, for twenty-foot equivalent unit) -- at a price of around €120 million per ship.
An order of this size -- involving the simultaneous construction of several large ships at what would seem to be an astronomical price tag -- would have been unthinkable only a few years ago. For decades shipbuilding was considered a dying industry, especially in Germany. Like coalmining, shipbuilding was seen as a subsidized industry with no future; Its market had collapsed and it was only being kept alive with taxpayers' money.
It's a completely different story today. Commercial shipbuilding is currently experiencing its biggest and most enduring boom in history. In 2005, shipyards worldwide received orders worth a total of $100 billion, and the total value of orders on the books is currently $264 billion. More than 5,300 new ships will be launched within the next three years. Average prices for new ships have jumped by more than half in the last four years.
The current growth in the industry differs markedly from the oil tanker boom 35 years ago, a trend that was driven primarily by growth in the oil business -- and collapsed during the oil crisis. This time around, growth is not dependent on one product, but to a large extent on one country: China.
Chinese economic growth has driven global trade for years. The shipping lanes between Asia and Europe have long been a major thoroughfare for shipping companies, as countless container ships shuttle back and forth, transporting finished goods in one direction and components and raw materials in the other.
This growth in trade has also produced a growing demand for new ships, especially container ships, but also tankers to transport oil and liquid natural gas, as well as ore ships.
Shipping companies have no trouble paying for their rapidly growing fleets, because the rising demand for shipping capacity has been accompanied by a sharp rise in freight rates. The average daily cargo rate was around $12,000 in the 1990s; Now it's as much as $40,000.
Germany has enjoyed a significant share of this unexpected boom -- not because so many ships are being built here but, surprisingly enough, because German companies are ordering so many ships.
Largely unnoticed by the public, German shipping companies have become a dominant force, especially in the container shipping business, which now plays an important role in global trade -- and especially thanks to the fiscal benefits of the tonnage tax. Thousands of German dentists and lawyers, eager to reduce their tax liability, are investing in funds and shipping companies.
Germans owned more than 1,000 container ships in 2006, making Germany's container fleet the world's largest by a wide margin -- despite the fact that, for tax reasons, a majority of these vessels sail under foreign flags. The Chinese come a distant second, with only 261 container ships.
German shipping companies are also busy expanding their leading role, placing by far the largest number of orders for new ships of all types -- almost 1,000 ships, for a total value of $33 billion.
But German shipbuilders are likely to see little of these breathtaking sums, because German shipyards tend to build only two types of ships: complex or small. German shipbuilders have focused on niche markets, including yachts, cruise ships, small container ships and specialized vessels such as icebreakers. They now hold a mere two percent of the global shipbuilding market.
Mass production migrated to Asia long ago, mainly for reasons of cost, but also because container ships are getting bigger and bigger. "They don't even fit into German docks anymore," says Zelck. He has just parked his car between two hatch covers, each the size of a barn door. The Osaka Express, another Hapag-Lloyd ship currently being built in Ulsan, towers over Zelck. The colossus is 336 meters (1,102 feet) long, 60 meters (197 feet) tall and 43 meters (141 feet) wide, and boasts a 100,000 horsepower engine.
It's mid-January and the ship is almost complete, close to a month ahead of its scheduled launch. Even though work on its interior still needs to be completed, it is already in the water; The shipyard's nine dry docks are in great demand, and anything that can float is placed into the water as soon as possible.
The Osaka Express is only one of 82 ships that will be launched this year at Hyundai. By comparison, Germany's 18 shipyards will launch a combined total of 54 ships this year. It takes the Hyundai shipyard a little less than eight months to build a ship like the Osaka Express, not much time for a 94,000-ton giant.
"But you still have to put in your order a couple of years in advance," says Zelck. The Osaka Express is the fourth ship in an order Hapag-Lloyd placed in 2004. The eighth and last ship won't be completed until 2008.
That's how long Zelck will remain in Ulsan, together with his three colleagues from Hapag-Lloyd, who are responsible for supervising construction each step along the way, from keel-laying to the launch. One construction supervisor is responsible for keeping an eye just on the painting of the ships -- with a 350-meter ship, paint becomes a major cost factor by itself.
Isn't a four-man team a little on the small side for supervising the construction of these giant ships? "Our job is to supervise the execution; the shipyard is responsible for the process and the technology," says Zelck. In contrast to individual luxury yachts and cruise ships, the Hamburg-based shipping company has little control over what its ships will ultimately look like. It selects the model and a few interior options, but not much more than that.
It was a different story 10 or 20 years ago, when shipping companies still designed their own ships. German engineers produced the blueprints and the Koreans built the ships. Nowadays Hapag-Lloyd no longer has a development department. The Koreans have been fast learners.
This is the sort of globalization that probably has German industry most concerned, because it's not just jobs which are moving, irreversibly, overseas -- but also knowledge.
"The Koreans have also been building the engines here for some time now," says Zelck, raising his voice as he walks through the noisy 100-meter-long machine hall next to the quayside. A flatbed trailer groans under the weight of a huge ship's engine, but Zelck seems unconcerned. "That's just a small one," he says. The engine is three stories tall.
The name of the German engineering company MAN is written on the side of a piston the size of a tree trunk, evidence that the engine was at least designed in Germany, though it was built in Korea. Hyundai is now the global market leader in the production of diesel engines for ships. Even if a German shipyard were capable of building a large container ship at home, it would probably have to import the engine from Korea.
Hyundai now produces engines with a total of 8.5 million horsepower a year, says Seok Hong Joon, the company's sales director. He is visibly proud as he rattles off Hyundai's impressive sales and order figures. His enthusiasm has a lot to do with the fact that Hyundai "started with nothing" not too long ago, as Seok says. Ulsan, still just a small fishing port in the early 1960s, is now home to a million people. It has become an Asian version of Volkswagen's hometown of Wolfsburg -- a giant company town, complete with Hyundai shopping centers, Hyundai apartment buildings, Hyundai hotels and even a Hyundai university.
Seok calls the city and the shipyard a "symbol of the dynamic Korean economy." They are perhaps more a symbol of the fact that even a market dominance that has lasted for decades no longer counts for much.
In today's economy, it is no longer only labor and production that migrate around the globe. Entire industries now move wherever production happens to be cheaper, faster and more flexible -- wherever people are willing to work for less and governments are willing to do whatever it takes to spur economic growth.
Until the end of the 1970s, the Europeans still dominated the global shipbuilding industry, continuing a tradition that went back centuries. That role shifted to the Japanese in the 1980s. Since the turn of the millennium, the Koreans have been in the lead, and currently have a global market share of close to 40 percent. But the Chinese are likely to overtake all other competitors soon.
A giant shipyard is currently being built at a record pace near Shanghai, a shipyard that even makes Hyundai's seem small by comparison. By 2015, claims the Chinese leadership, China will be by far the world's largest shipbuilding nation.
Seok smiles when he is asked about the Chinese. Of course, he says, he is familiar with their grand plans, but 2015? No, that's completely unrealistic, in Seok's opinion. Zelck also believes that although the Chinese will likely overtake the Koreans at some point, it won't happen that quickly. "You can't build experience overnight."
The average Hyundai employee has worked at the shipyard for 19 years. This longevity also guarantees loyalty. Nevertheless, Hapag-Lloyd's construction supervisors inspect every cable, every pipe and every alarm bell, and they use radar and ultrasound to inspect weld seams.
Work on the Osaka Express is in full swing as it nears its scheduled trial run. Because Zelck and his small team are unable to supervise everything, the captain, chief engineer and electrician of the Osaka Express have been in Ulsan for months now. Their job is to get to know their ship, but also to ensure that everything is ready on the launch date.
Only 36 hours after leaving the shipyard, the Osaka Express will be operating as part of Hapag-Lloyd's scheduled service. The company is one of the world's most efficient shipping businesses, plying the busy Europe-Asia route and using Shanghai as a hub. The exact date of delivery of the Osaka Express was already scheduled on the date Hapag-Lloyd signed its contract with Hyundai.
Because delays are something the shipyard cannot afford, every square meter of dock area must be put to use. A tanker and two container ships are currently squeezed into Dock 3. And because there isn't quite enough space for a fourth container ship at the dock, only half of the vessel -- from stern to midships -- is being built. The other half will be built once one of the other ships is completed, freeing up the necessary space at the dock. The unfinished ships are docked so close together that tires are used as buffers between their sides.
Nevertheless, there is still inadequate space at the shipyard as it faces a constant demand for new ships. Some deliveries are backordered until 2011. To keep up with the demand, Hyundai has begun building ships directly on the wharf instead of in the water. Once the ships are completed they are maneuvered into the water using a complex system of rails and hoists.
Skeptics claim that the only reason German shipyards are even receiving orders for container ships is that the Asian shipyards are so overloaded. It's a claim Jürgen Kennemann angrily rejects.
Kennemann is the head of German operations for Norwegian shipbuilding conglomerate Aker and chairman of the German Shipbuilding and Ocean Industries Association, so he's well qualified to speak on behalf of the German shipbuilding industry. According to Kennemann, business hasn't been this good for German shipbuilders in 20 years. These days, shipyards are hiring workers instead of laying them off, which hasn't been the case in a long time. The order books at most shipyards, including Aker, are full.
In the future, says Kennemann, Germany will have to treat its shipyards as a strategic industry once again, "especially here in the East."
By "here in the East" he means Wismar in Mecklenburg-Western Pomerania. The shipyard's production building, 72 meters (236 feet) tall and 395 meters (1,296 feet) long and painted bright blue, is visible from the highway a kilometer away. It used to be called MTW, and it was where freighters for the East German merchant navy and passenger ships bound for the Soviet Union were built. Today Aker operates the shipyard, together with its sister shipyard in Warnemünde.
Two small container ships with space for a little more than 2,000 standard containers are currently being built at the dock in front of Kennemann's office. The dock is large enough to accommodate ships capable of carrying four times as much cargo but, says Kennemann, no German shipyard can compete with the Koreans in building ships of that size.
To remain competitive the Germans, according to Kennemann, must concentrate on complex ships with more options than the Koreans offer -- specializing in quality instead of quantity. The world's best and most costly yachts are built at the Lürrsen shipyard in Bremen and the Blohm and Voss shipyard in Hamburg, which is currently designing a luxury yacht worth an estimated €200 million for Russian multi-billionaire Roman Abramovich. The Meyer shipyard in Papenburg is one of the world's leading builders of cruise ships. Aker was awarded contracts to build the world's two largest freight and passenger ferries and also produces icebreaking freighters for a Russian mining company.
Finding the right niche markets is key, says Kennemann. It's an approach taken by another German shipbuilder, 200 kilometers (124 miles) farther east near the Polish border, which is building smaller container ships known as feeders at the Peene shipyard in Wolgast. Instead of sailing long-distance routes around the world, the vessels, which can carry up to about 1,500 containers, distribute the steel containers from large to smaller ports.
Feeders are comparable to regional trains on rail routes. When a giant container ship like the Osaka Express docks in a major port like Hamburg, it is quickly surrounded by several feeders onto which the larger ship's cargo is distributed for shipment to smaller ports in the Baltic states, Russia or Scandinavia.
The Peene shipyard currently has 21 orders on its books, a lot for a company that many would have expected to be out of business by now. Treuhand, the government agency that privatized the former East German state-owned enterprises after the Wall came down, wasn't even interested in privatizing the shipyard, which it deemed too remote and unpromising, after German reunification.
But that didn't deter Bremen entrepreneur Detlef Hegemann. Shortly after reunification, Hapag-Lloyd, a regular customer of Hegemann's at the time, ordered several tugboats from the Peene shipyard instead of from Hegemann's Roland shipyard, as it would normally have done. "It was a mystery to me," says Hegemann. "We already weren't making any profit on the tugboats, so how could they have done it more cheaply?" He drove to Wolgast, negotiated with Treuhand and ended up buying the ailing shipyard. Today the Peene shipyard has about 770 employees and more than 100 trainees. Hegemann is proud of the shipyard's turnaround. "Where else can you find something like this in the area?" Finding workers isn't a problem in a region with such high unemployment.
But finding qualified engineers is a different story. Engineers with shipbuilding degrees are a scarce commodity throughout Germany. "It's no wonder when the entire industry was neglected for so long," complains Hegemann. With engineers in demand in all fields, who would want to specialize in an industry that was widely considered dead?
Hegemann is now thinking about establishing a shipbuilding academy in Peenemünde. He isn't worried about the boom coming to an end any time soon. "As long as there is a demand for more, and larger, container ships, the demand for feeders will grow," says Hegemann. Many ports are not even designed for the new breed of giant container ships. This is welcome news for German shipbuilders. As long as the Koreans are only interested in building big ships, the Germans can continue producing the smaller ones without fear of Asian competition.
The people at Hyundai are used to focusing on the gigantic. Spending a few days at the Hyundai shipyard quickly distorts one's sense of size. Huge parts are constantly rolling past: propellers 10 meters (33 feet) in diameter, rudder blades the size of apartments and engines as big as houses.
Stacks of ship parts cover every meter of available space, parts made from countless steel plates which arrive every day at the shipyard's docks from steel mills farther north. Somewhere among these piles Zelck recognizes part of the stern of a Hapag-Lloyd ship by its shape. The hunk of metal is only one of 216 pieces that will later make up the Tsingtao Express.
Is any part of the ship made in Germany any more? The on-board computer maybe? Or the radar system? Zelck thinks for a moment, and then he says: "The cables to tie the ship to the dock. Somehow they haven't figured out how to make them here."
The article below was taken from the on line edition of Der Spiegel at :
http://www.spiegel.de/international/spiegel/0,1518,467655,00.html
THE NEW SHIPBUILDING BOOM
Giants of the Waves
By Thomas Schulz
Shipbuilding, dismissed as a dying industry until recently, is now experiencing a record boom. Even German shipyards are booked solid for years in advance. But the real heavyweights are to be found in Asia.
When Norbert Zelck leaves his temporary office near the Hyundai shipyard's main gate in the morning and walks out into a cacophony of warning sounds and screeching winches, it is often to embark on a search. "Where did they put it this time?" he mutters as he climbs into his car and drives away, looking for his ship. You might think that such a giant vessel -- it will be more than 300 meters (984 feet) long when it is finished -- would be easy enough to find.
But no. All Zelck can see are the seemingly endless quay walls as he drives around, hardly noticing the obstacles that suddenly pop up in the middle of the road: bows, stern sections and complete deckhouses.
Even such a ship can get mislaid in a place this big: The huge shipyard covers an area equivalent to 1,000 soccer fields. Forty thousand people work here in Ulsan at the southern tip of South Korea, in what is the world's largest shipbuilding operation.
It takes Zelck 20 minutes to find the gray steel shell that will be his ship one day: the Tsingtao Express. There it is on the last wharf, scarred with weld seams and hidden behind two tankers that are almost finished and already freshly painted in light blue. "It's coming along," says Zelck.
Originally a captain and ship engineer for Germany's largest container shipping company, Hapag-Lloyd, Zelck hasn't commanded a ship in years. Instead, he has a selection of new titles: Superintendent Engineer, Chief Supervisor and Site Manager. Nowadays he is no longer responsible for only one ship, but for many. He is currently supervising the construction of eight giant container ships Hapag-Lloyd is having built by Hyundai, each capable of transporting 8,750 standard containers (or TEU, for twenty-foot equivalent unit) -- at a price of around €120 million per ship.
An order of this size -- involving the simultaneous construction of several large ships at what would seem to be an astronomical price tag -- would have been unthinkable only a few years ago. For decades shipbuilding was considered a dying industry, especially in Germany. Like coalmining, shipbuilding was seen as a subsidized industry with no future; Its market had collapsed and it was only being kept alive with taxpayers' money.
It's a completely different story today. Commercial shipbuilding is currently experiencing its biggest and most enduring boom in history. In 2005, shipyards worldwide received orders worth a total of $100 billion, and the total value of orders on the books is currently $264 billion. More than 5,300 new ships will be launched within the next three years. Average prices for new ships have jumped by more than half in the last four years.
The current growth in the industry differs markedly from the oil tanker boom 35 years ago, a trend that was driven primarily by growth in the oil business -- and collapsed during the oil crisis. This time around, growth is not dependent on one product, but to a large extent on one country: China.
Chinese economic growth has driven global trade for years. The shipping lanes between Asia and Europe have long been a major thoroughfare for shipping companies, as countless container ships shuttle back and forth, transporting finished goods in one direction and components and raw materials in the other.
This growth in trade has also produced a growing demand for new ships, especially container ships, but also tankers to transport oil and liquid natural gas, as well as ore ships.
Shipping companies have no trouble paying for their rapidly growing fleets, because the rising demand for shipping capacity has been accompanied by a sharp rise in freight rates. The average daily cargo rate was around $12,000 in the 1990s; Now it's as much as $40,000.
Germany has enjoyed a significant share of this unexpected boom -- not because so many ships are being built here but, surprisingly enough, because German companies are ordering so many ships.
Largely unnoticed by the public, German shipping companies have become a dominant force, especially in the container shipping business, which now plays an important role in global trade -- and especially thanks to the fiscal benefits of the tonnage tax. Thousands of German dentists and lawyers, eager to reduce their tax liability, are investing in funds and shipping companies.
Germans owned more than 1,000 container ships in 2006, making Germany's container fleet the world's largest by a wide margin -- despite the fact that, for tax reasons, a majority of these vessels sail under foreign flags. The Chinese come a distant second, with only 261 container ships.
German shipping companies are also busy expanding their leading role, placing by far the largest number of orders for new ships of all types -- almost 1,000 ships, for a total value of $33 billion.
But German shipbuilders are likely to see little of these breathtaking sums, because German shipyards tend to build only two types of ships: complex or small. German shipbuilders have focused on niche markets, including yachts, cruise ships, small container ships and specialized vessels such as icebreakers. They now hold a mere two percent of the global shipbuilding market.
Mass production migrated to Asia long ago, mainly for reasons of cost, but also because container ships are getting bigger and bigger. "They don't even fit into German docks anymore," says Zelck. He has just parked his car between two hatch covers, each the size of a barn door. The Osaka Express, another Hapag-Lloyd ship currently being built in Ulsan, towers over Zelck. The colossus is 336 meters (1,102 feet) long, 60 meters (197 feet) tall and 43 meters (141 feet) wide, and boasts a 100,000 horsepower engine.
It's mid-January and the ship is almost complete, close to a month ahead of its scheduled launch. Even though work on its interior still needs to be completed, it is already in the water; The shipyard's nine dry docks are in great demand, and anything that can float is placed into the water as soon as possible.
The Osaka Express is only one of 82 ships that will be launched this year at Hyundai. By comparison, Germany's 18 shipyards will launch a combined total of 54 ships this year. It takes the Hyundai shipyard a little less than eight months to build a ship like the Osaka Express, not much time for a 94,000-ton giant.
"But you still have to put in your order a couple of years in advance," says Zelck. The Osaka Express is the fourth ship in an order Hapag-Lloyd placed in 2004. The eighth and last ship won't be completed until 2008.
That's how long Zelck will remain in Ulsan, together with his three colleagues from Hapag-Lloyd, who are responsible for supervising construction each step along the way, from keel-laying to the launch. One construction supervisor is responsible for keeping an eye just on the painting of the ships -- with a 350-meter ship, paint becomes a major cost factor by itself.
Isn't a four-man team a little on the small side for supervising the construction of these giant ships? "Our job is to supervise the execution; the shipyard is responsible for the process and the technology," says Zelck. In contrast to individual luxury yachts and cruise ships, the Hamburg-based shipping company has little control over what its ships will ultimately look like. It selects the model and a few interior options, but not much more than that.
It was a different story 10 or 20 years ago, when shipping companies still designed their own ships. German engineers produced the blueprints and the Koreans built the ships. Nowadays Hapag-Lloyd no longer has a development department. The Koreans have been fast learners.
This is the sort of globalization that probably has German industry most concerned, because it's not just jobs which are moving, irreversibly, overseas -- but also knowledge.
"The Koreans have also been building the engines here for some time now," says Zelck, raising his voice as he walks through the noisy 100-meter-long machine hall next to the quayside. A flatbed trailer groans under the weight of a huge ship's engine, but Zelck seems unconcerned. "That's just a small one," he says. The engine is three stories tall.
The name of the German engineering company MAN is written on the side of a piston the size of a tree trunk, evidence that the engine was at least designed in Germany, though it was built in Korea. Hyundai is now the global market leader in the production of diesel engines for ships. Even if a German shipyard were capable of building a large container ship at home, it would probably have to import the engine from Korea.
Hyundai now produces engines with a total of 8.5 million horsepower a year, says Seok Hong Joon, the company's sales director. He is visibly proud as he rattles off Hyundai's impressive sales and order figures. His enthusiasm has a lot to do with the fact that Hyundai "started with nothing" not too long ago, as Seok says. Ulsan, still just a small fishing port in the early 1960s, is now home to a million people. It has become an Asian version of Volkswagen's hometown of Wolfsburg -- a giant company town, complete with Hyundai shopping centers, Hyundai apartment buildings, Hyundai hotels and even a Hyundai university.
Seok calls the city and the shipyard a "symbol of the dynamic Korean economy." They are perhaps more a symbol of the fact that even a market dominance that has lasted for decades no longer counts for much.
In today's economy, it is no longer only labor and production that migrate around the globe. Entire industries now move wherever production happens to be cheaper, faster and more flexible -- wherever people are willing to work for less and governments are willing to do whatever it takes to spur economic growth.
Until the end of the 1970s, the Europeans still dominated the global shipbuilding industry, continuing a tradition that went back centuries. That role shifted to the Japanese in the 1980s. Since the turn of the millennium, the Koreans have been in the lead, and currently have a global market share of close to 40 percent. But the Chinese are likely to overtake all other competitors soon.
A giant shipyard is currently being built at a record pace near Shanghai, a shipyard that even makes Hyundai's seem small by comparison. By 2015, claims the Chinese leadership, China will be by far the world's largest shipbuilding nation.
Seok smiles when he is asked about the Chinese. Of course, he says, he is familiar with their grand plans, but 2015? No, that's completely unrealistic, in Seok's opinion. Zelck also believes that although the Chinese will likely overtake the Koreans at some point, it won't happen that quickly. "You can't build experience overnight."
The average Hyundai employee has worked at the shipyard for 19 years. This longevity also guarantees loyalty. Nevertheless, Hapag-Lloyd's construction supervisors inspect every cable, every pipe and every alarm bell, and they use radar and ultrasound to inspect weld seams.
Work on the Osaka Express is in full swing as it nears its scheduled trial run. Because Zelck and his small team are unable to supervise everything, the captain, chief engineer and electrician of the Osaka Express have been in Ulsan for months now. Their job is to get to know their ship, but also to ensure that everything is ready on the launch date.
Only 36 hours after leaving the shipyard, the Osaka Express will be operating as part of Hapag-Lloyd's scheduled service. The company is one of the world's most efficient shipping businesses, plying the busy Europe-Asia route and using Shanghai as a hub. The exact date of delivery of the Osaka Express was already scheduled on the date Hapag-Lloyd signed its contract with Hyundai.
Because delays are something the shipyard cannot afford, every square meter of dock area must be put to use. A tanker and two container ships are currently squeezed into Dock 3. And because there isn't quite enough space for a fourth container ship at the dock, only half of the vessel -- from stern to midships -- is being built. The other half will be built once one of the other ships is completed, freeing up the necessary space at the dock. The unfinished ships are docked so close together that tires are used as buffers between their sides.
Nevertheless, there is still inadequate space at the shipyard as it faces a constant demand for new ships. Some deliveries are backordered until 2011. To keep up with the demand, Hyundai has begun building ships directly on the wharf instead of in the water. Once the ships are completed they are maneuvered into the water using a complex system of rails and hoists.
Skeptics claim that the only reason German shipyards are even receiving orders for container ships is that the Asian shipyards are so overloaded. It's a claim Jürgen Kennemann angrily rejects.
Kennemann is the head of German operations for Norwegian shipbuilding conglomerate Aker and chairman of the German Shipbuilding and Ocean Industries Association, so he's well qualified to speak on behalf of the German shipbuilding industry. According to Kennemann, business hasn't been this good for German shipbuilders in 20 years. These days, shipyards are hiring workers instead of laying them off, which hasn't been the case in a long time. The order books at most shipyards, including Aker, are full.
In the future, says Kennemann, Germany will have to treat its shipyards as a strategic industry once again, "especially here in the East."
By "here in the East" he means Wismar in Mecklenburg-Western Pomerania. The shipyard's production building, 72 meters (236 feet) tall and 395 meters (1,296 feet) long and painted bright blue, is visible from the highway a kilometer away. It used to be called MTW, and it was where freighters for the East German merchant navy and passenger ships bound for the Soviet Union were built. Today Aker operates the shipyard, together with its sister shipyard in Warnemünde.
Two small container ships with space for a little more than 2,000 standard containers are currently being built at the dock in front of Kennemann's office. The dock is large enough to accommodate ships capable of carrying four times as much cargo but, says Kennemann, no German shipyard can compete with the Koreans in building ships of that size.
To remain competitive the Germans, according to Kennemann, must concentrate on complex ships with more options than the Koreans offer -- specializing in quality instead of quantity. The world's best and most costly yachts are built at the Lürrsen shipyard in Bremen and the Blohm and Voss shipyard in Hamburg, which is currently designing a luxury yacht worth an estimated €200 million for Russian multi-billionaire Roman Abramovich. The Meyer shipyard in Papenburg is one of the world's leading builders of cruise ships. Aker was awarded contracts to build the world's two largest freight and passenger ferries and also produces icebreaking freighters for a Russian mining company.
Finding the right niche markets is key, says Kennemann. It's an approach taken by another German shipbuilder, 200 kilometers (124 miles) farther east near the Polish border, which is building smaller container ships known as feeders at the Peene shipyard in Wolgast. Instead of sailing long-distance routes around the world, the vessels, which can carry up to about 1,500 containers, distribute the steel containers from large to smaller ports.
Feeders are comparable to regional trains on rail routes. When a giant container ship like the Osaka Express docks in a major port like Hamburg, it is quickly surrounded by several feeders onto which the larger ship's cargo is distributed for shipment to smaller ports in the Baltic states, Russia or Scandinavia.
The Peene shipyard currently has 21 orders on its books, a lot for a company that many would have expected to be out of business by now. Treuhand, the government agency that privatized the former East German state-owned enterprises after the Wall came down, wasn't even interested in privatizing the shipyard, which it deemed too remote and unpromising, after German reunification.
But that didn't deter Bremen entrepreneur Detlef Hegemann. Shortly after reunification, Hapag-Lloyd, a regular customer of Hegemann's at the time, ordered several tugboats from the Peene shipyard instead of from Hegemann's Roland shipyard, as it would normally have done. "It was a mystery to me," says Hegemann. "We already weren't making any profit on the tugboats, so how could they have done it more cheaply?" He drove to Wolgast, negotiated with Treuhand and ended up buying the ailing shipyard. Today the Peene shipyard has about 770 employees and more than 100 trainees. Hegemann is proud of the shipyard's turnaround. "Where else can you find something like this in the area?" Finding workers isn't a problem in a region with such high unemployment.
But finding qualified engineers is a different story. Engineers with shipbuilding degrees are a scarce commodity throughout Germany. "It's no wonder when the entire industry was neglected for so long," complains Hegemann. With engineers in demand in all fields, who would want to specialize in an industry that was widely considered dead?
Hegemann is now thinking about establishing a shipbuilding academy in Peenemünde. He isn't worried about the boom coming to an end any time soon. "As long as there is a demand for more, and larger, container ships, the demand for feeders will grow," says Hegemann. Many ports are not even designed for the new breed of giant container ships. This is welcome news for German shipbuilders. As long as the Koreans are only interested in building big ships, the Germans can continue producing the smaller ones without fear of Asian competition.
The people at Hyundai are used to focusing on the gigantic. Spending a few days at the Hyundai shipyard quickly distorts one's sense of size. Huge parts are constantly rolling past: propellers 10 meters (33 feet) in diameter, rudder blades the size of apartments and engines as big as houses.
Stacks of ship parts cover every meter of available space, parts made from countless steel plates which arrive every day at the shipyard's docks from steel mills farther north. Somewhere among these piles Zelck recognizes part of the stern of a Hapag-Lloyd ship by its shape. The hunk of metal is only one of 216 pieces that will later make up the Tsingtao Express.
Is any part of the ship made in Germany any more? The on-board computer maybe? Or the radar system? Zelck thinks for a moment, and then he says: "The cables to tie the ship to the dock. Somehow they haven't figured out how to make them here."
