Monday, April 25, 2016

Chinese cruise ships? Thanks but no thanks

Shipbuilding is an economic activity that has in substance left Europe long ago. With one exception: Cruise ships. There is a reason for this. Cruise tourism, and carriers, are inextricably linked with the concept of quality; and quality is a ‘way of life’, a philosophy, difficult to copy. 

In spite of the global economic crisis of 2009, cruise tourism has been growing steadily. Carriers are working to near capacity and so do European yards in Germany, France and Finland. Orderbooks are full, without counting newbuilding options. Shipbuilding berths will be the bottleneck in the further growth of the sector going forward.

Aspiring volunteers, such as China, do of course exist, and European builders, such as Fincantieri of Italy, are already considering joint ventures. To my view, this would be the wrong thing to do. A JV entails transfer of technology and as such it is the surest way of offering the knife that will eventually stab you in the back. We have seen this happening in every other European industry and we should be learning from our mistakes.   

It will therefore be quite some time before China enters seriously into the cruise shipbuilding market. No doubt this will eventually happen. But in the meantime, a carrier should think twice before assigning an order to a yard which does not have the experience, suppliers and logistics to carry out the work as expected, and he would be fast to stealthily advertise, negatively, competitors’ decisions to do so. At a consumer level, personally I would think twice before boarding a cruise ship made in China…  

The result of all this will undoubtedly be an increase in the price of cruise tourism products which, we must admit, has dropped to ridiculously low levels due to competition among carriers. Time will tell. HH 

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