Market Challenges And Opportunities
Ship Conversion Market Drivers:
- Increasing seaborne trade and cargo transportation: The growth in seaborne trade and rising cargo transportation through ships is a major factor driving the ship conversion market growth. The lifecycle of ships is limited, and most cargo vessels need to be replaced or upgraded after 15-20 years of operation. This has accelerated the need for ship conversion activities where existing ships are retrofitted or modified to suit current cargo.......converted to carry grains and other dry bulk commodities.
- Rising energy exploration activities: The increase in offshore oil and gas exploration and production activities is fueling the demand for ship conversions, especially oil tankers and offshore support vessels. According to the Arctic Council's Protection of the Arctic Marine Environment (PAME) program 1991, oil and gas exploration activities expected to significantly rise over the next decade as major oil companies have announced multibillion dollar investments to ramp up production from oilfields like Barents Sea. For instance, in 2021,.......substantial demand for retrofitting and converting oil tankers into Floating Production Storage and Offloading (FPSO), drill ships, offshore support vessels, to support offshore projects.
- Growth in passenger cruise tourism: The expanding cruise tourism industry is leading cruise liners to upgrade existing ships and convert vessels to meet changing consumer expectations. Adding new amenities, passenger capacity, and technologies through ship conversions provides an avenue for cruise companies to attract more tourists and gain a competitive edge. The growth in expedition and adventure cruises......vessel into the ship's interior spaces along with additional capacitors.
- Demand for green ships: With sustainability becoming vital in the maritime industry, ship owners are converting conventional ships into eco-friendly vessels running on alternative fuels like LNG, to comply with emissions regulations. The demand for green retrofitting to reduce pollution is rising, however, older ships are also undergoing conversions to improve their energy efficiency and environmental performance. For instance, the European Union launched its 'Fit for 55' package in 2021, which aims to cut greenhouse gas emissions from ships...... converting outdated conventional vessels into hybrid or fully electric versions.
- The increasing focus on maritime security: The increasing focus on maritime security around the world is a major factor driving the growth of the global ship conversion market. As threats like piracy, terrorism, and smuggling at sea have risen over the past decade, many nations have placed greater emphasis on monitoring ship movements and cargo in their coastal waters and trade routes. In nations with extensive coastlines, the surveillance and protection of maritime zones are increasingly prioritized, with a greater utilization of sophisticated technologies.......an intelligence systems through comprehensive conversions.
Ship Conversion Market Opportunities:
- Navy fleet modernization programs: Several countries like China, ASEAN, and Indonesia have announced fleet modernization and expansion programs to strengthen naval capabilities in response to rising security challenges. Converting older naval ships provides a faster and cost-effective option over new constructions. Many nations are seeking to extend the operational lifetimes of existing vessels through upgrades. Conversion of naval ships...
- Development of autonomous ships: Advancements in maritime technologies and automation are leading to the gradual adoption of autonomous ships. The conversion and retrofitting of existing crewed ships into autonomous vessels provides an opportunity to leverage these futuristic operations. Companies can potentially target conversions to upgrade navigation, communication and control systems for autonomous operations. Data from trade organizations like ......
- Expansion into emerging economies: Rising investments to develop shipbuilding infrastructure and capabilities in emerging economies such as India, Indonesia, Vietnam, Nigeria and Egypt have seen strong GDP growth rates. These investments open up new geographical opportunities. Companies can expand into these markets by leveraging lower-cost advantages...proactively targeting these emerging economies, ship conversion companies can position themselves to benefit from an estimated multi-billion dollar market opportunity in the coming years as new ships are built and older ones undergo retrofitting.
- Inland waterway vessel conversions: Growth in inland waterway transportation for domestic cargo movements provides new conversion opportunities for obsolete marine vessels. Companies can target conversions of deep-sea ships into river-sea ships, barges, and other vessel types suited for inland waterways. Conversions can also meet the demand for eco-friendly cargo transport. Converting existing inland vessels and ......
- Expanding intra-regional trade post-pandemic: Asia Pacific’s prowess in fostering regional integration has been well-established, demonstrated by the dynamic connections in commerce, capital deployment, and technological advancement. The region's diversity in populations and cultural expressions has been harmonized into a tightly...example, in Europe, intra-regional trade accounted for approximately 67% of total trade in 2021, up from 64% in 2019.
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