An ageing fleet is coastal shipping’s biggest challenge

There are many challenges that Greek coastal shipping has to face, to turn a page towards a new era, with the fleet renewal having become a necessity, since 50% of the Greek shipping ships that are currently in service, in 2035 will be over 40 years old.

According to the annual analysis of the XRTC consulting company, today no shipping company has plans to build ships, except for the Attica Group which completed the construction of three Aero Catamaran type ships, which were launched on the Argosaronic lines. The new catamarans were the first new ships on coastal line in almost 10 years.

In this context and since there are no second-hand ships available that meet environmental regulations, the only solution is to build new ships. However, as highlighted, the problems posed are diverse and include the type of fuel they will use and how they will be financed, while the difficult financial results of the coastal shipping companies are putting a brake on the renewal of the fleet.

As coastal shipping is called upon to adapt to the new environmental requirements for zero carbon emissions, technologically sustainable solutions for their replacement by renewable sources, such as electricity, biofuels, ammonia, hydrogen, methanol, etc., have not yet been achieved, and this in and of itself adds to the challenges of global shipping, in general.

Pandemic problems

As far as the current state of the sector is concerned, the effects of the pandemic and the catastrophic drop in transport demand in 2020 and 2021 certainly stand out, as do the huge problems in energy with fuel costs at exorbitant prices, and also the difficulty of new investment schemes and financial organizations to enter shipping in the last decade with very few exceptions.

As recorded in the XRTC report, a healthy market is not a particular challenge for Greece, as happened 30 years ago. Then the opportunity was the adaptation of the Greek shipping market to a more competitive environment.

In the current phase, the corresponding environment presents possibilities which can be mobilized with the assistance of the Ministry of Shipping, the Hellenic Chamber of Shipping and the Association of Passenger Shipping Companies, which – among others – have undertaken the “greening” of the coastal shipping fleet and the upgrade of connectivity, through the modernization of port infrastructures and upgrading the quality of maritime transport.

The analysis of market signs augurs that Greek shipping is now at the beginning of a new cycle of growth, which is also a first-class opportunity to start a new investment orientation through the construction of new ships or the purchase of modern second-hand vessels and the activation of the domestic shipbuilding sector if possible.

On the other hand, the uncertain economic environment, due to energy costs, inflation, pandemic and supply chain crisis, as well as the geopolitical implications of the war in Ukraine must also be taken into account.