New Horizons: Cruise Industry Challenges & Solutions for 2017
Approximately 130 million Chinese citizens travel
internationally, making China the world's largest outbound travel
market in the world. With one-sixth of the world's population,
many recognize this country as a market with huge potential.
Until a few years ago, travel by ship was a common mode of
transport, but China's rapid economic evolution has attracted
more people to leisure travel opportunities and the luxury
holiday experience cruise liners can offer. It is anticipated
that the number of Chinese passengers will reach 4.5 million by
2020, which is more than 20 percent of today's global cruise
passengers. The relaxed visa rules also mean that China is set to
accommodate more foreign visitors from cruise vessels.
Cruise shipbuilding is developing in parallel, signalled by the
move made by Carnival Corporation. The company recently signed a
joint venture agreement to design and build two cruise ships with
the China State Shipbuilding Corporation (CSSC) and Fincantieri.
These will be the first ships ever to be built in China for the
Chinese market and will be tailored to meet the needs of Chinese
In 2017, as the cruise market evolves, a number of industry
changes and considerations are coming to bear.
The attraction of going off the beaten track has given rise to
the expeditionary travel market. Many of these adventure holidays
involve a cruise element, and this growing sector, with demand
for smaller vessels, is impacting the industry. At the other end
of the market, there is growth in very high-capacity,
high-specification vessels for the luxury experience.
Whatever end of the cruise sector, space on board ships is always
at a premium; more cabin and facilities space means higher
revenue potential. Therefore, power-dense engines, propulsion
motors and power electronics with a reduced footprint are the
preferred choice for ship owners and operators. GE's compact,
COmbined Gas turbine Electric and Steam (COGES) propulsion system
can help save valuable space on board.
Derived from GE's powerful aircraft engines, GE gas turbines
already operate on cruise ships, eight of which feature COGES
arrangements. With little maintenance required, COGES makes
possible the reduction of up to four engineering crew members
versus diesel-powered ships. For normal scheduled maintenance,
the entire turbine can be removed and replaced in a very short
time (approximately24 hours). The combination of outstanding
reliability and gas turbine swapping greatly reduces downtime and
minimizes interruption to ship operations.
Enhanced manoeuvrability is also particularly important for
cruise ships. GE's Marine Solutions is currently partnering with
shipbuilders to design the next generation of marine propulsion
"pods," targeting improved fuel efficiency and manoeuvrability.
Following the COP21 Paris Agreement, emissions reduction has been
high on the agenda for every industry. In fact, the marine
industry as a whole is responsible for about 2.5 percent of
global greenhouse gas emissions.
In an effort to curb emissions, various governmental
organizations around the world are introducing strict
regulations, which are set to impact maritime operations. In the
European Union (EU), for example, new regulations come into force
in 2017 requiring any large vessel docking at an EU port to
monitor and report its CO2 emissions.
In China, the government is creating emission control areas at
major shipping ports, introducing a sulphur cap at 0.5 percent,
ahead of the global IMO 2020 regulations.
To adhere to these regulations, marine operators need to rethink
the most fundamental aspects of their operating models-how they
consider everything from vessel design to vessel management to
fuel choice and maintenance-to be compliant with the
environmental regulations. New technologies can incur costs from
development and upgrades, but also can bring efficiencies that
lead to a fast return on investment and strengthen a market
position for operators.
One way to embrace the change is through adopting cleaner
engines, such as GE's Tier 4 diesel engine, which meets IMO Tier
III and US EPA Tier 4 requirements without the complications of
urea after-treatment. Separately, GE's marine gas turbines can be
equipped with GE's dry low emissions combustion system to reduce
The emission volume is well below what IMO Tier III and US EPA
Tier 4 standards require and with no exhaust treatment and no
Along the green wave, alternative clean fuel, such as LNG, will
become a more predominant marine fuel. The move is typified by
Carnival Corporation, which has three LNG-powered cruise ships on
order. In addition, GE's fuel-flexible COGES system is capable of
burning diverse fuels including LPG, natural gas, marine gas oil
and other bio-synthetic paraffinic kerosene blends.
As the marine industry transitions increasingly to natural gas,
GE's Marine Solutions brings experience of working across the
whole LNG value chain for two decades-from production to
processing, transport and propulsion-to help achieve the smooth
The Digital Wave
Booming demand is also incentivizing the cruise industry to dip
into digital waters to further raise efficiency and ensure a
smooth and pleasant journey for passengers.
Unplanned downtime for any cruise line can cause interruptions to
passengers' journeys, loss of revenues and potential brand
damage. However, analytic tools can predict an equipment's
potential failure before it becomes an operational disruption,
reducing downtime and more crucially, avoiding disruptions during
the voyage. This predictivity can also enable a shift from
calendar- to condition-based maintenance, further reducing
Digital technology can also help improve fuel efficiency by
analyzing weather conditions and current to optimize propulsion
rate and speed. Furthermore, it can help operators make smart
decisions to change to use cleaner fuels on the course of the
route, depending on the speed needed, further curbing emissions
and cost of fuel.
As the demand for cruise holidays soars, fleets continue to grow.
While stringent regulations and new destinations may provide new
challenges, they bring with them a host of opportunities. New
regulations will push operators towards more efficient operations
with reduced carbon footprint, while new destinations open up new
revenue streams. By using the right technology-green and
digital-operators are sailing in the right direction to
capitalize on the opportunities in 2017 as well as those further
on the horizon.
Tim Schweikert, is president & CEO, GE's Marine
Apr 21, 2017