Sanguine times for the future of the ferry industry

Mike Grainger, managing director of Liferaft Systems Australia, chairman of TT-Line Spirit of Tasmania and former chairman of Interferry, chats to Jon Ingleton on the topic

Sanguine times for the future of the ferry industry

This article was first published in the Autumn/Winter 2018 issue of International Cruise & Ferry Review. All information was correct at the time of printing, but may since have changed.

What are the greatest challenges currently facing ferry operators?
New emission regulations come into effect in 2020, forcing many ferry operators to make some significant decisions about how they will comply. They will also need to maintain compliance with several new International Maritime Organization (IMO) regulations, such as those relating to ballast water management and stability. Another key challenge is that most of the reputable ferry builders have full order books for the next five years, so there is a shortage of slots for operators who are contemplating newbuild programmes. This is particularly true in the high-speed sector where builders like Incat and Austal have recently received orders for large high-speed passenger and vehicle ferries. It seems that lead times are extending with the larger, more versatile yards having several contracts for newbuilds to be delivered in 2022 and beyond. The cruise ship industry has not helped this situation with many cruise ships on order or under construction, tying up the large shipbuilders well into the future.  

What are the big opportunities?
The opportunities are significant for ferry owners who operate their vessels with a high degree of safety and high level of customer satisfaction. Owners who are investing in new tonnage will no doubt reap the benefits of a strong economy in their respective geographical routes. We are seeing some of the major European owners amalgamating, and in turn strengthening, their markets, increasing services for passengers and freight companies. The new generation of ferries are significantly more efficient, which maximises the return on investment for ferry owners. The global economy seems to be improving, which is also providing opportunities for ferry owners to expand and take advantage of tourist dollars.

How do you think alternative modes of transport will impact the growth of sea travel in future? 
Alternative modes of transport aren’t necessarily increasing; governments will always build bridges and airlines will always cater for the needs of their particular industry sector. However, we’ve recently seen that the new generation of ferry transport can (in most cases) compete with bridges or airlines. The Great Belt Bridge in Denmark – which has a toll of €32.00 (US$36) per car – is an example where ferry operations in the area are actually increasing. We have witnessed some amalgamation of ferry operators and new tonnage being introduced in Denmark, so confidence is obviously high. The River Plate in Argentina is another example where the Buquebus ferries compete very well with airlines connecting Buenos Aries to Montevideo. As populations are increasing worldwide, it’s becoming more difficult for governments to maintain infrastructure programmes in terms of highways to cater for additional motor vehicles. Toll roads are also more common, so travelling by highway is becoming more expensive and less competitive than taking a ferry. Ferry transport is rising, which is taking cars and freight off the roads – it’s a win-win situation.

How can the ferry industry capitalise on this competitive advantage?
Ferry operators should invest in more efficient designs so they’re in a position to offer a mode of transport that is equal to or better than the alternatives. The industry needs to maintain a high level of safety and customer service to stay ahead of the opposition (bridges and highways).

Is the current legislative framework doing enough to improve ferry safety?
The International Maritime Organisation (IMO) is responsible for the development and implementation of the regulatory process and overall, I believe it’s doing things properly. However, the IMO requires the support of, and input from, the entire marine industry to ensure fair and equitable regulations. We shouldn’t underestimate the responsibility of flag states, port states and classification societies to ensure that implementing and monitoring the regulations is of paramount importance. In less developed countries, there needs to be a culture change which steers the industry towards following the world’s best practices. This can only be done with the financial and practical support of local administrations. Organisations such as Interferry have contributed to assisting under-developed countries to create a pathway towards safer, more efficient and cost-effective ferry operations.

Ferry operators are ramping up their sustainability activities, but are they doing it at a pace that will sustain consumer confidence in the sector?
Sustainability is becoming more important with the advent of modern technology and in some cases, it could be said that the ferry industry lags behind some other industries, such as airlines. However, customer confidence will continue to increase as new modern ferry designs and build programmes come on stream. Technology plays an important part in sustainability; therefore the ferry industry needs to keep pace or lead the transport sector with customer-focused incentives that influence how the ferry industry is perceived.

Are there any current industry innovations that you think will be a big game-changer?
We’re experiencing a period of growth in the ferry industry that we have not seen for quite a number of years, probably since the implementation of high-speed aluminium vehicle ferries in the early 1990s. We must keep the pressure on the IMO to make sure that regulations don’t stifle the industry, but at the same time improve on the efficiency and safety of passenger ferries. With alternative fuels like LNG and methane being used and new materials like carbon fibre also now commonplace, the ferry industry has a lot to be excited about. It is a significant step forward when we compare the ferries of today to those being built and operated just 30 years ago. Today’s ferries are safer, stronger and more efficient, economic, sustainable and environmentally friendly than ever before. The future looks extremely promising for ferry owners, operators, builders, designers and suppliers and we must embrace this new era with confidence.

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Jon Ingleton
By Jon Ingleton
Friday, February 8, 2019