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By Bill Becken |
Reports from ferry brokers indicate that most markets around the world are fairly tame. Excepting Asia, says John Aitkenhead, managing director of Australian firm International Broking Services.
Asia, he reckons, is a growing source of brokered sales and charters. “Asian countries have been less affected by the monetary stress affecting the world,” he says. “Our sales activity in Asia has been quite strong. That should continue into 2012, enabling us to hold our own generally while so many suffer losses.”
Strong business conditions and economic growth continue to characterise Australia and Asia, especially Southeast Asia, where Australia provides minerals and raw materials to the ever more hungry and prosperous Asian Tiger nations. Ferry use is understandably on the increase in such areas, says Aitkenhead.
Countries such as Indonesia and the Philippines are basically archipelagos with thousands upon thousands of islands. “You can just imagine the need and requirements for ferries in certain places where they’re experiencing growth,” he argues.
Globally, IBS also watches various potential routes closely. One is Taiwan to mainland China. Another is Florida to Cuba. “In both cases, people at one end of the route have plenty of relatives at the other,” says Aitkenhead. He expects that, when the political changes ultimately unfold enabling service on these routes, such services will emerge quickly. “And, of course, we will be ready for them,” he says.
Whether a market is deemed healthy depends on the type of ferry one considers, he says. For example, the Mediterranean remains a big RoPax market. The Baltic market is a mix but owner-operators mainly field larger, steel-hulled vessels there. The fortunes of ferry markets vary from nation to nation. “Japan was a very happy hunting ground for us. But now we don’t sell into it. We get stock from Japan,” he says. “That has pretty much happened over the last year or two.”
Countries like the Philippines and Korea are more robust. “They’re probably our two biggest markets,” says Aitkenhead. Other countries where IBS has lately done deals include Sri Lanka and Singapore and, to a lesser extent, China (including Hong Kong), Turkey, France, Kuwait, Jordan and Israel.
The lion’s share of activity may be in Asia, says Aitkenhead, but that doesn’t mean the Asian markets are acquiring ferries with the most advanced designs. “The choice of craft still revolves around the trade off of seats versus horsepower versus speed.
The longer the route, often the greater the requirement for speed.” On the other hand, he says, for shorter routes – for example, in Tahiti, the 12 nautical miles between Papeete and Moorea – slower ferries serve just fine. “Besides, the pace of life is usually somewhat slower in countries like Tahiti, the Philippines and Indonesia,” he adds.
But the biggest factor of all in choosing a ferry, says Aitkenhead, is fuel consumption. The gas turbines that were very much in vogue a few years ago have become less popular. “Firms like Stewart & Stevenson in Houston were using the Caterpillar Taurus gas turbine, which went into a lot of ferries,” he says, and they particularly went to Hong Kong.
Hong Kong is now ground zero for gas turbine-powered ferries. The reason, according to Aitkenhead, is fare sensitivity and relatively inelastic demand. Many Hong Kong ferries go to Macao, a hotbed of casinos; both high and low-rollers spend readily on transport to visit them. Even several turbine-powered Boeing jet foils, built decades ago, still run there, despite, according to Aitkenhead, being ‘hideously expensive’ to run.
Why do Asian clients come to IBS? “Because they all know us and we’re fast-ferry specialists,” is Aitkenhead’s explanation. “It took us many years, since when we began, in 1974, to gain respectability in the industry, but we did. We have a good reputation, we get on with people, and we travel a lot. We don’t just sit in the office and wait for calls.”
This is an abridged version of an article that appeared in the Autumn/ Winter 2011 edition of International Cruise & Ferry Review. You can subscribe to the magazine in printed or digital formats.