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Cruise Shipping Miami 2015: New aspects of passenger ship operational safety concerns

At Cruise Shipping Miami 2015, a panel of experts discussed new aspects of safety at sea, security and environmental issues confronting the cruise industry. Alan Lam reports from Miami.

Since the Costa Concordia accident, various safety-related rules and regulations have been tightened up and better implemented.  While IMO seemed to be doing a good deal in introducing new rules, it was clear, from the cruise line’s perspective, the organisation was merely catching up with what cruise lines were already doing.

“What IMO is doing is not a novel idea,” said Bud Darr, SVP, Technical and Regulatory Affairs, CLIA. “The Concordia accident merely brought the issue to fore. We are not going to wait for the regulators to tell us how to operate ships safely. The industry is ahead of the regulatory bodies. Safety features are already built into the ships.”

The panel also highlighted the fact that cruise ships and ferries operated under different safety standards. Cruise ship operators have a more uniformed and generally much higher standard of safety, while ferry operators, especially on domestic routes, were often only subject to national safety requirements, which could be varied in standards.

With the Far East now representing 6% of the global cruise market and continues to grow rapidly, the passenger shipping safety issue in that part of the world was brought under focus. The panel agreed that the industry ought to ensure the safety standard in the Far East matched those of Europe and North America. Andrew Winbow, Assistant Secretary-General & Director, Maritime Safety Division, IMO, suggested that the developed countries should help the underdeveloped ones improving their safety practices, especially in terms of ferry operations,

As the expeditions segment of cruise business expands, cruise ship operational safety and environmental issues in Polar Regions become more pressing. Andrew Winbow confirmed that the Polar Code would enter into force in January 2017, as an extension of the existing SOLAS and MARPOL. The Code will contain both mandatory items and guidelines. “Concern for the environment underlines the Polar Code,” he said. “Global warming is opening up more of the Polar Regions for cruising. Polar Code will become more relevant.”

Cyber threat is another major new safety and security issue of cruise ship operations. Andrew Winbow told the audiance that two documents relating to this subject had been submitted by governments to his organisation and the IMO was already looking at the issue, assessing what could happen in the event of a breach and how to respond to it.

“Equipment on board has a lot of embedded software,” said Philippe Donche-Gay, Chairman, IACS & EVP, Marine & Offshore Division, Bureau Veritas. “We are looking at the safety aspects. You have to be very careful in segregating the networks. It is a very serious issue.”

Cruise ships usually use hardware that is more than five years old. It is therefore important to have the software regularly serviced. And this process itself requires security controls, as access to the ship’s system by an outside technician represents a security risk.

Passenger ship operational safety and security development is an ongoing process that also encompasses shore-side security measures.

UPDATE 3: Cruise passengers main victims of Tunis terrorist attacks

UPDATE 3: Costa Crociere confirms three of  passengers murdered among touristsby terrorists in Tunis yesterday. Nine passngers of MSC Cruises had been confirmed to be among the dead already earlier.

Statement by Michael Thamm, CEO of Costa Group: "With great sadness we regret to report that 3 passengers of the Costa Fascinosa are amongst the victims of this barbaric and horrific terror attack in Tunis, and further 8 guests are injured. In addition 2 remain unaccounted for.  We strongly condemn the attack on democratic Tunisia. Our deepest sympathy and our condolences go to the victims and their families. We share their sorrow.

Our team in Tunis is currently taking care of the companions of the victims and the 8 guests who are being treated in hospitals. A further Costa management team is supporting our crew and our guests on board. In the meantime, Costa Fascinosa has left Tunisia and is currently at sea.

We are in constant contact with the Italian Government and the security authorities of Tunisia as well as of other countries. We would like to thank the Italian Minister of Foreign Affairs and his structure for their co-operation".

 UPDATE 2: Thirteen passengers of Costa Crociere’s Costa Fascinosa are missing and nine are dead from MSC Cruises’ MSC Splendida in the aftermath of a terrorist attack in Tunis on Wednesday, which has claimed at least 23 lives, including the perpetrators.

“Based on the communication made by officials authorities, MSC Cruises, its ownership and entire management team report with profound sadness that at the time of this announcement nine of its guests are reported to have lost their lives, 12 were injured, and six (two Spanish nationals, one Belgian, one British, one French and one Japanese) are still unaccounted for in conjunction with the tragic event at the Bardo Museum. However, these numbers are still subject to modification whilst official identification is on-going,” MSC Cruises said in a statement.

 “According to sources it would appear that of the victims, three were of Japanese nationality, two French, two Spanish and two were Colombian. The wounded, of which three Japanese nationals, one South African, one Belgian and seven French, are currently being treated in various hospitals. All of them are being assisted in person by members of the MSC Cruises Crisis Team that was immediately sent to Tunis to provide on the ground support,” the company said.

Meanwhile Costa Crociere said in a statement that Costa Fascinosa had sailed from Tunis at 0155 am today, at which time 13 passengers of the vessel had failed to return on board. A 12 member care team remains on the scene in Tunis, it added.

 UPDATE 1: Costa Crociere has issued the following statement:

"Further to this morning attack in Tunis, Costa Crociere confirms that some of its guests had booked a Shore Excursion in the City. Upon being notified the Ship’s Command have immediately recalled all excursions to return on board. The company is in close contact with the Italian Ministry of Foreign Affairs, Local Security Authorities, the Captain of Costa Fascinosa and our local Port Agent for a continuous assessment of the situation on site and its evolution so to collect updated information from the Authorities. 3161 Guests were on board this cruise. The departure of the ship from Tunis which is scheduled for tonight at 8pm will most probably be delayed. Costa HQ management and Care Team are travelling to Tunis to reach the ship tonight in order to liaise with the local Authorities and passengers on board. Extra security measures are taken by local security Authorities around the port to ensure the security of ship, its passengers and the crew."

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Forty passengers of Costa Crociere, the Genoa based contemporary market unit of Carnival Corp & plc, were at the Bardo museum in Tunis at the time of a terrorist attack this afternoon, a media report in London said.

"Then there were no gunshots outside, then we heard of things outside. We were all inside sitting on the floor in the room. We could hear Allahu Akbar and lots of firing. There are around 40 French tourists with Costa Cruises. People are shooting outside. Earlier there were shots in the museum, now it’s outside.” the Daily Telegraph newspaper reported on its website, citing rench media. Seventeen people are reported to have been killed at the attack, including two terrorists shot  by the security services.

Two cruise liners are docked at La Goulette, the port of the capital Tunis this afternoon. These are Costa Fascinosa of Costa Crociere and MSC Splendida of MSC Cruises, according to data retrieved from marinetraffic.com

 

European cruise market growth rate dived to 0.5% in 2014

The rate of expansion of the European cruise market dived to 0.5% in 2014 from 4.0% in the previous year, figures from the Cruise Lines' International Association (CLIA) show.

Talking about the 0.5% growth rate for 2014, Pierfrancesco Vago, Chairman of CLIA Europe, said in a statement: “This may sound like a small achievement, but if we consider the European economic climate, we can see that this is an extraordinary result, and continues our industry’s trend of steady growth year-on-year. While Europe is struggling to recover from the economic crisis, our industry has continued to grow. We have grown by an incredible 44% since 2008.”

The British market contracted for the first time in more than a decade last year - despite a good performance of the British economy - while Spain and Italy also showed contraction. German and French source markets expanded - by 5% and 13.7%, respectively.

Germany overtakes UK as market shrank 4.8% in 2014

Germany has overtaken the UK as the world’s second largest source market for cruises after the British market contracted by 4.8% in 2014 to 1.62 million passengers, wiping out the meager growth in the previous years of the decade, Travel Weekly reports.

“The cruise market in the UK and Ireland shrank for the first time in more than a decade last year, declining by 4.8% to 1.64 million passengers. The 2014 figure compares with 1.72 million carryings in 2013 and is the lowest figure since 2010. The drop means Germany overtook the UK last year to become Europe’s biggest market for cruise passengers,” the report said.

The UK decline was revealed in figures unveiled by trade body Cruise Lines’ International Association (CLIA) at the Cruise Shipping Miami conference on Tuesday.

Andy Harmer, director of CLIA UK and Ireland, blamed the dip on an 11.4% decrease in capacity in Europe in 2014. He said he was confident the industry would “get back on track this year”, adding: “We rely very strongly on where ships are based and sailing. UK guests have a really high propensity to cruise in Europe and there was a big reduction in the number of ships in 2014.

“That’s reversed in 2015, when we are seeing a 9% increase in the number of ships sailing here. Everything suggests there’s every reason to be positive about the year ahead. We will continue to support the trade in the best way we can with new events and training opportunities.”

Harmer said agents had switched cruise customers to other destinations, growing the number of UK cruisers in the Caribbean. However, he said it was difficult to sway those intent on sailing only in Europe.

The total European market grew by 0.4% last year to a record 6.39 million, with the German market expanding by 5% to 1.77 million.

Harmer said the growth in Germany was due to lines such as Aida and Tui Cruises building ships dedicated to the market.

Italy remained the thirdlargest source market in Europe, with 842,000 passengers, despite a 3.1% drop.

France’s cruise industry grew by 13.7% to 593,000, while Spain saw a 4.5% drop to 454,000, the report said.

Cruise Shipping Miami 2015: Perspectives of top four helmsmen on cruise industry

In the State of the Industry debate, the opening session of this year’s CSM, chaired by the flamboyant Richard Quest, CNN’s International Business Correspondent, different perspectives of the cruise industry were elaborated by four current helmsmen of the business. Alan Lam reports from Miami.

The industry has experienced a stronger 2014, with global cruise passenger number reaching the record 22.1 million. Its economic impact is now estimated at $117 billion, supporting 890,000 direct employments and paying $38 billion per year in wages. 23 million passengers are forecast for 2015.

Against this background, the four distinguished personalities of the industry were quizzed, by Richard Quest, for their perceptions of the industry. While they agreed on many aspects of the business, they seemed to have perceptibly different attitudes on a number of other issues.

Richard Fain, Chairman and CEO, Royal Caribbean Cruises Ltd., was realistic about he state of the industry. “We somehow haven’t managed to break through and attract a whole new range of customers,” he said. “That’s our biggest challenge. The growth in the US is moderate, tiny in Europe and infinitesimal in Asia.” He was interested in demand growth, not just in supply increases. “The value we offer is so much better than other forms of vacation,” he went on. “It is cheaper; but this isn’t sustainable. We need more customers so the prices can rise. We are in the middle of a price deflationary period. We are charging the 2008 prices, but we offer so much more.”

“We have to grow profitably,” echoed Frank J. Del Rio, President and CEO, Norwegian Cruise Line Holdings Ltd.

Arnold Donald, President and CEO, Carnival Corporation & Plc, was less guarded and more ambitious with his objective. “We plan to grow 25% this year,” he said. “ We’ve got to give the guests what they want; then they’ll buy our products.”

Pierfrancesco Vago, Executive Chairman, MSC Cruises, spoke about the depressed state of the economy in Europe, but he pointed out that cruise industry still managed to grow against this background.

When asked about whether or not the industry is ready for Cuba. The Big Four appeared to be on different pages.

“I am not sure if any of us is ready,” said Richard Fain. “We have a lot to learn about every country we go to. Cruise industry in not a one-size-fits-all.” Royal Caribbean is not ready for Cuba. Clearly there are infrastructure and other issues to consider.

Frank J. Del Rio saw it differently. “Yes, we are ready for Cuba. The wonderful thing about cruise industry is that we bring our own infrastructure. But there are other destinations we’d like to go to, such as Eastern Mediterranean where most of the best Roman ruins are found. Eastern Mediterranean will be more profitable than Cuba.” But he was keenly aware of the geopolitical challenges for the region.

For MSC, the perspective was again different. Pierfrancesco Vago said they were already in Cuba, as his company was the only one of the four majors without the constraint of the US embargo.

The attention was then inevitably switched to China. In this subject area, we were told that the reason Norwegian an MSC were not operating in this fastest growing region was because they did not have enough ships. “It is a matter of resources deployment,” said Frank J. Del Rio. “We’ve got to deploy our ships where we can get the best returns.” But, as expected, Norwegian cannot ignore China for long. “I’m grateful for Royal Caribbean and Carnival for paving the way in China,” he went on, lightheartedly. “ We are watching them closely and learn from their mistakes. At present, like MSC Cruises, we do not have enough ships. But we have four ships on order. In the next few months we’ll make a decision.”

While everyone is heading for China, Pierfrancesco Vago, on the other hand, saw Europe as destination for the rapidly growing Chinese source market. As a European, he was also protective about Europe’s cruise shipbuilding knowhow and did not believe that it should be shared with Chinese shipyards.

The differences in perspective reflected the diversification of the industry.