Mixed market

The Maritime Group (International) – known globally as TMG – fresh from a successful consultancy agreement with UK-based Serco which involved advising and helping them in their bid for the Northern Isles service, was rather surprised to see an article in rival journal Cruise & Ferry Info earlier this year raising doubts about the ferry operator’s ability to take over the NorthLink Ferries service as scheduled on 5 July 2012. But more on that later.

Founded in 1990 by John Cox of Seattle, TMG is a premier world maritime consultancy specialising in the cruise and ferry business. The British side of the organisation is run from HQS Wellington, the livery hall of the Honourable Company of Master Mariners, a City of London Livery Company. Not a bad place to base a maritime consultancy company!

Although the main expertise is in cruise and ferry operations, TMG also has experience in port development and management including cruise, conventional and high-speed ferry berths, ro-ro, container terminals, as well as dry and liquid bulk cargo operations. Port and terminal design, project management and construction services are provided by working very closely with TMG’s strategic partners, civil marine engineers Beckett Rankine of London and Mumbai. TMG is actively involved in international ferry operations and management, cruise and ferry terminal management – particularly in Puget Sound – with the operation of United States (US) company Black Ball Ferry Line. The ferry firm was purchased late last year from Oregon State University Foundation in a management buyout. TMG president John Cox serves as chairman and CEO following six years as Black Ball’s director.

Amongst many other projects, TMG has advised the state Governments of Hawaii and Washington, American and British government agencies, and carried out a marketing study on ferry and cruise operations for the Government of Abu Dhabi. Currently TMG is working with the Government of Gujarat State in India to set up a ropax ferry service across the Gulf of Cambay, the very first ro-ro ferry service in the Indian sub-continent. TMG is assisting an international high-speed craft (HSC) builder to develop new markets for both these vessels and work boats in the Middle East and sub-continent. But TMG’s main interest remains in HSC and fast ferries.

The high price of fuel and specifically marine gas oil (MGO) which HSC predominantly burn, has caused somewhat of a soft world market in the larger ropax-type craft of which there are a number on the market. Smaller HSC from the 25-metre to 45-metre range of passenger-only ferries, are having a much better time. During the past few months there has been demand for 45-metre and longer, ropax HSC. The recent sale of a one-year-old, 99-metre ropax will shortly be followed by that of her sister ship, from the same stable. So while craft numbers are down, sales value is substantially higher.

The Euro crisis has meant a decrease in the number of solid enquiries with most HSC sales coming from the Mediterranean as European owners try to divest themselves of excess tonnage, although Denmark appears to be holding up rather well. Several Asian economies are doing well with demand for HSC ferries remaining at a reasonably high level. There also seems to be demand from some African countries.

The two major builders of larger ropax – Incat and Austal – both based in Australia, are finding sales slow. However, Incat-built craft – 37 of these measure longer than 74 metres – are mostly in service throughout the world and only three craft above 74 metres are laid up. Incat and Austal between them have three more HSC ropax being built in Tasmania, including the revolutionary 99-metre vessel powered by a dual-fuel LNG and MGO combination. Buquebus in Argentina is reputed to have bought this. Austal Australia and Austal’s US subsidiary has built a total of around 220 HSC from 22-metre to 127-metre trimarans. They have built 27 66-metre to 127 metre ropax HSC, along with a 102-metre trimaran that is currently under construction. Other HSC builders include Rodriquez in Italy, Damen in the Netherlands and Fjellstrand in Norway among those less well-known. Many of their craft are in service, although again sales are sluggish. Rodriquez has a design for a 144-metre HSC monohull which if constructed, will be the largest HSC in the world. TMG is working with clients on new high-speed ropax route prospects but these are long term possibilities, often taking years to cultivate to fruition.

On the conventional ferry front, TMG in association with Beckett Rankine, ran two extremely successful roadshows in Mumbai and London during June 2012 on behalf of the Gujarat Maritime Board (GMB). The shows explained the concept of a new ropax ferry service across the Gulf of Khambhat (Cambay) in Gujarat state, from Dahej to Gogha, a distance of 31 kilometres, compared to the long road distance around the bay. New terminals, piers and linkspans are being built at Gogha and Dahej and are expected to be completed in June 2013. The service is intended as an extension of the road-rail system and will make a journey saving of 360 kilometres, which is the distance by road from Dahej to Gogha. A ‘request for proposal’ will be issued to interested operators by the GMB in the next couple of months, with the new operator expected to be in place by early September 2013 and the service starting shortly thereafter.

Conventional ropax are having a similarly bad time with sales non-existent or at best, very slow. Rumour has it that Fjord Line in Norway and SNCM in France are both negotiating on tonnage with the possibility of eight new orders between them. With conventional ro-ro freight ships, many new vessels have been built over the last two years, but few are being fixed for charter. One of the big challenges facing the ferry industry today is dealing with the stricter regulations that are being introduced to reduce emissions of NOx, SOx and GHG. The investment required in methods to deal with achieving lower emissions is not helping the operator. The higher distillated fuels required will potentially result in a huge hike in fuel prices, increasing operating costs of ferry lines even further.

Recently TMG had the pleasure of providing consultancy services to support Serco Scotland’s successful bid for the Northern Isles Ferry Services. The project saw TMG provide expert advice to Serco’s Scottish-based bid team as they prepared a tender to run the lifeline ferry services between the Scottish mainland, Orkney and Shetland on behalf of Transport Scotland. TMG is proud to report that Serco successfully managed an extremely tight transition period to take over running of the service on 5 July 2012. TMG now looks forward to seeing the many improvements Serco will bring to both the freight and passenger services.