Martin & Ottaway is celebrating its 150th anniversary this year. While maritime technology changed a lot in that period, it still relies on foundational truths.
For example, maritime continues to be a very capital intensive industry. The returns on investment are often assumed to take a decade, and with cyclical ups and down, can easily extend into two decades (or sometimes, when a shipowner is veeeery lucky, it can pay off in a year).
An underlying truth is that shipowners work for the bank in the first 10 years and only make money with their ships in the next 20 years. That means that ships should operate profitably and reliably for 20 years.
Investing in ships is not for the faint of heart. Many things can go wrong and often the impact is devastating. A mechanical failure can stop the ship, and a ship that does not move makes no money.
One thing shipowners used to spent relatively little time worrying about was spare parts availability, but this has drastically changed in the last few decades and in our experience has become a dangerous issue that we now take into account in our daily consulting and valuation work.
Advanced technologies have changed spare parts strategies. If engine components like liners, heads, injectors, pistons and bearings were supposed to last a few years, an ample supply of spare parts would be a natural result. The spare parts business would be a predictable business and strongly commoditized.
In even earlier days, most engine components could also be custom sourced at any good machine shop. I worked with older ship’s engineers who even turned their own piston rings from pipe stock in their younger days.
However, when a piece of equipment is designed and sold not to require service for, say, 10 years the original equipment manufacturer has little interest in an ample spare parts supply chain when the equipment is first delivered. The manufacturer will put the equipment into service and wait for spare parts orders to come in before they invest in spares production.
However, if the equipment does not perform as expected there are no spare parts, and if it is vital equipment, the vessel is stopped. Moreover, with advanced controls more and more parts become vital spares. Ironically equipment that performs as expected can also result in spare parts shortage. If a certain piece of equipment has a digital controller and it performs reliably in the first 10 years, chances are that no spare stock has ever been built up and if the controller fails at 12 years, there are no manufacturers who can supply a replacement even on a custom level.
For every era of Martin & Ottaway’s existence, there have been specific issues that tend to raise their head and then over time are resolved for other issues to come to the fore.
It can be fairly stated that spare parts supply problems is one of the driving factors in our workload today.
Just a quick glance through our present work portfolio includes the following issues:
1. A major medium speed engine manufacturer that has a recent LNG fueled upgrade that suffers from cylinder head distortions and erosion and cannot supply replacement cylinder heads.
2. A major medium speed engine manufacturer that cannot supply replacement digital engine control interfaces on engines that were purchased new less than five years ago.
3. A major high speed engine manufacturer that cannot supply overhaul spares for engines that were purchased new in 2010.
4. Three projects where different hybrid vessels ranging in age from 8 to 15 years were fitted with controls by one of the largest marine control and electric power suppliers in the world that is simply telling these customers that they do not supply spare controllers for these vessels, rendering these otherwise operational propulsion plants unrepairable.
5. A major slow speed diesel engine manufacturer that cannot supply a major spare package in less than 6 months after delivery of the vessel.
6. A major slow speed diesel engine manufacturer that supplied an engine that is failing within the warranty period but tells the owner they cannot supply needed spare parts because they do not make these spares and it will take at least 6 months to make spares.
7. A major high speed engine manufacturer that will need 6 months to supply a replacement engine for one of their currently marketed engines that failed within the warranty period.
8. A major electric propulsion manufacturer that, under warranty, supplies a replacement electric drive that will not run (fortunately while it was being tested by the owner before installation) and where the supplier continues to blame the owner and requires endless remote trouble shooting until it is finally discovered by the owner that the unit was shipped with an incompatible “upgraded” controller.
9. A major slow speed engine manufacturer who denies a warranty claim for hydraulic system cavitation by blaming the owner for not testing something that can only be tested when the engine is commissioned by the manufacturer. The cause advanced by the manufacturer is highly dubious, but the Owner makes modifications and keeps the ship tied up for months waiting for non-existent spares and, when the vessel is returned to service, the problem has not gone away.
20 years ago, when a 20 year old digital control system failed, almost always there was a controls supplier who could build and program a new system for a reasonable price. However, today those systems are so complex and so filled with proprietary software that has hundreds of poorly documented updates, that only original spares can do the job.
These issues are starting to present a level of risk that may become unmanageable by shipowners. The industry is focused on sustainable solutions, which are introducing new technologies, components and equipment that are vital to the operation of the vessel. If the equipment suppliers do not make a concerted effort to provide customer support with a window of at least 20 years, we will increasingly see that for the want of a $1000 digital controller the project went bankrupt.
