On the eve of the prestigious Marintec China exhibition in Shanghai, celebrating its 40th anniversary this year, we talked to Allan-QingZhou Wang, Head of ABB Turbocharging in the country to understand more about China’s marine industry and the most pressing issues for attendees at the event.
“Along with Korea and Japan, China is one of the largest commercial shipbuilders in the world,” says Allan. This concentration of ship construction in east China lends a special importance to the Marintec exhibition: “It’s becoming the leading event of the Maritime industry in many ways.”
China’s vast economy – the second largest in the world, after the USA, and already the largest in terms of manufacturing – continues to grow at speed, and this is especially true of the marine sector. “Maritime engineering equipment manufacture and high-tech shipbuilding is one of 10 key manufacturing sectors that receive special attention in China,” says Allan. And the nation is putting extra resources into making sure it continues to be developed according to its plan. Allan explains that China’s visionary Belt and Road Initiative sees planned investments worth more than a trillion US dollars pouring into developing the state’s trade infrastructure to create land and ocean superhighways between China, other countries in Asia, Africa and Europe. “It’s already underway; it’s already happening,” says Allan.
Allan-QingZhou Wang, Head of ABB Turbocharging China
Four-fifths of China’s exports travel by sea. “In the container vessel segment, a major stream is from China to the East and West Coasts of the USA, and to Europe. Then within the region, there’s major traffic along the coast, down to Korea and to South Asia,” says Allan.
But the country’s manufacturing prowess means it’s also hungry to import raw materials. “Everybody knows China is the world’s biggest importer of iron ore,” Allan tells us. Vast inbound vessels from mineral-rich countries like Australia, Brazil and countries in Africa feed iron ore to China’s steel mills, oil ships from the Middle East and gas carriers from Australia and Russia feed the refineries, and other raw materials arrive continually to keep China’s manufacturing and construction industries at work. This means there’s an even mix between Chinese and international ships at the country’s key ports.
Despite all this activity, though, Allan tells us industry members are uneasy. “If I had to choose one word to describe the industry right now, it would be ‘uncertainty’,” he says.
This uncertainty has several causes. “There’s still an imbalance between supply and demand. There are more ships than there are cargos,” Allan explains, saying it’s not clear whether that imbalance will correct itself without casualties. The second is increasing regulation on emissions. “This comes from both international and local sources,” says Allan. “The International Maritime Organisation is imposing increasingly stringent targets, on one hand. On the other hand, our own government is pushing ahead with green economy measures.” These targets and regulations mean many existing vessels will require refits or replacement, squeezing investment on other areas.
Other economic changes are also creating wariness: the US-China trade uncertainty has particularly hit the manufacturing industry. “Ship owners just don’t know how that will end and so it makes it really hard to make decisions,” says Allan.
“At ABB, of course, we’re very keen to help our customers continue to grow even in difficult times. There’s not much we can do about the trade war, international laws or major economic shifts, but we can help customers make more of their assets. Turbocharging is all about increasing efficiency – getting further with less fuel, so it’s definitely part of the solution to helping them meet emissions targets and improving profitability,” says Allan.
Digitalisation is a key theme for this year’s Marintec exhibition. And it’s an area in which Allan feels ABB can help ship owners and fleet managers work smarter: “ABB Ability™ Tekomar XPERT for fleet is a really useful tool for measuring how well vessels are performing, and guiding smart decisions around engine health and fleet performance. At fleet-level, you can see across all your vessels and understand how to make best use of your resources.”
Looking forward, Allan sees digital technologies helping to reduce costs still further, albeit at a slower pace than some other sectors. “Ours is a conservative industry: the most important value to our customers, and their customers, is reliability. This means they are risk-averse, because anything that damages their reputation for reliability will have a commercial impact.
“However, there are certainly operations where automation and digitalisation increases reliability, because currently it’s often human error that creates problems. So, I believe the automation and digitalisation of various processes will increase, and this will help boost reliability, safety and reduce operational costs.”
ABB Turbocharging will be exhibiting at Marintec China at the Shanghai New International Expo Centre on 3-6thDecember. If you are attending, please do come by our stand to continue the conversation about the future of this industry and how we might help you flourish.