COVID‑19 has had a dramatic impact on every shipping market, but the cruise sector has been plunged into unprecedented crisis. As of May, the entire cruise fleet is effectively laid up, cruise lines are facing a financial crisis, and no‑one knows what the future holds.
However, Joep Bollerman, Global Manager at LR’s Passenger Ship Support Centre in Miami, is surprisingly calm. Despite a non‑stop schedule of online meetings and conference calls with cruise clients, he had time to share his thoughts. These are pretty valuable: few in the cruise sector have more experience than him – as a Chief Engineer at sea with Holland America Line for 10 years prior to joining LR and rising to head the society’s cruise division in Miami, America.
We’ll be back
Despite the untold disruption, Bollerman has no doubt that most of the cruise industry will survive. “Cruise will be back,” he declares, pointing to recent successful initiatives by large cruise groups to raise more equity and debt in the markets. He concedes, however, that cruise lines will not be as strong as before because of the huge costs of keeping ships idle for many months to come.
LR, with the largest portfolio of cruise clients, is well‑placed to provide wide‑ranging advice and support at this difficult time. These include, but are not limited to, choice of lay‑up strategy, technical issues on safeguarding ship systems and electronic installations, post‑virus design considerations, and non‑shipping management system support from specialists in LR’s other divisions, including Food, Beverage & Hospitality.
As the speed and scale of the pandemic became evident, cruise lines were faced with formidable challenges, including ships at sea with sick passengers and no port for evacuation; how to repatriate thousands of crew as airlines grounded planes and countries shut their borders; accessing essential support when technical experts could not come on board; and, of course, all of the usual requirements from flag states and regulatory authorities.
In this context, Bollerman explains that LR’s remote survey and technical support systems have proved invaluable. Much has been accomplished that would not have been possible even a couple of years ago. Remote surveys have been completed successfully and LR has fulfilled an essential role as a strong link between cruise lines and flag state authorities, making the case successfully for remote surveys to flag state personnel who have sometimes shown reluctance to accept this new approach.
Given the current situation, the lines are facing up to a number of challenges. Nobody yet knows for how long the global cruise fleet will lie idle in various forms of lay‑up ranging from ‘hot’ to ‘cold’. But Bollerman believes that most operators will want to keep their vessels as hot as possible: “Our clients want flexibility,” he says. “This is more expensive in terms of daily cash burn, but reactivation after cold lay‑up can sometimes cost more than a ship is worth. That has to be taken into account.”
“Flexibility is important for various reasons,” he explains. “A cruise operator might want to take advantage of an unexpected slot at a repair yard so that a survey can be completed ahead of time. There might be a hurricane on the way. Then there is the issue of survey status: a cruise ship coming out of cold lay‑up would require all its surveys to be carried out at the same time. Instead of two, you’ve got 20 and that’s a nuisance. If we can do some remotely, that’s a great help.”
An important part of LR’s role across all of its activities is the mitigation of risk. Of course, this is absolutely central to the choice of lay‑up strategy, but Bollerman gives some other examples. At one stage, the classification society was asked to assess the deployment of cruise vessels as hospital ships. Clearly an entirely different risk assessment was required for a vessel to operate as a floating hospital.
Risk mitigation will also be central to the reintroduction of existing vessels when the time comes, Bollerman points out. The provision of medical facilities on board will be a key consideration, particularly for expedition vessels sailing in remote areas.
“We have already seen cruise ships unable to offload sick passengers in Florida, where there are probably as many hospitals as anywhere, because they were full,” Bollerman notes. “In remote locations, there might only be a couple of ICU beds – in fact, the ship itself could be by far the largest medical facility across thousands of square miles.”
With a substantial share of the record orderbook for cruise companies – more than 100 vessels at the beginning of this year – Bollerman and his colleagues are also closely watching negotiations between cruise lines and shipbuilders as they seek to extend the orderbook and postpone deliveries. This is in both parties’ interest. Shipyards are cutting capacity and laying off workers while cruise lines don’t want more capacity when there is no market.
When the virus is under control or a vaccine has been developed, Bollerman expects that existing ships will require some modification, as will vessels under construction. But he is certain that most seasoned cruise‑goers will not be deterred.
“There’ll be some changes to vessel operation, and we may need different luggage handling systems, for example,” he says. “After the virus, there might be a temperature scanner in every cruise terminal, for example.”
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